Corporate Planning Assignment
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HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore
Submitted by:
Hafiz Muhammad Amer Nisar
Date: March 11, 2009
Corporate Planning By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 1 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Planning Planning is a future course of action. It stimulates thinking in advance and to be prepared what is going to be happening in the future.
Corporate planning Corporate planning represents a formal, structured approach to achieving objectives and to implementing the corporate strategy of an organization. It has traditionally been seen as the responsibility of senior management. The use of the term became predominant during the 1960s but has now been largely superseded by the concept of strategic management. Generally corporate planning has been divided into these four categories w.r.t time. (Banking sector) 1
Short term
one year
2
Intermediate term
2 to 3 years
3
Long term
5 to 10 years
4
Perspective
15 to 20 years
As planning deals with the future which is uncertain, there are many difficulties for the corporate planners. Normally plans are developed under several sets of assumptions. Planning differs in MICRO and MACRO levels.
Need of Planning
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 2 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore It is very important to plan for any corporate either at micro or macro level, because without planning it is very difficult rather impossible to survive in the market. Corporate Planning plays a vital role to achieve the desired goals and objectives.
Planning process Following stages are considered as the process of planning. • Identification of objectives • Search for opportunities • Translating opportunities into specific course of action •
Setting specific objectives
• Review and revision of plans for feedback Objective setting There are two types / categories of objectives (internal & external) in business now days. Internal objectives
external objectives
Profit
Client Satisfaction
Growth
Social Needs
Market Penetration Leadership Productivity
Stated Objectives: Stated objectives are official statements found in the charters, annual reports, hanged on walls, and public relation announcements. One important point, that there must be no contradiction between state objectives and organizational goals.
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 3 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Hierarchy of Objectives
ORGANIZATIONAL OBJECTIVES
DIVISIONAL OBJECTIVES
SECTIONAL OBJECTIVES
DEPARTMENTAL OBJECTIVES
Levels of planning: Following are the three levels of planning 1) Strategic 2) Tactical 3) Operational
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 4 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Strategic Level: In strategic level the following are the key points helping to achieve the organizational goals. • Identifying vision • Determining mission • Company objectives should be identified • Organization should be planned • Policies to be set up i. Personnel ii. Marketing iii. Research • New product lines should be spelled out • New divisions should be acquired • Non-routine matters decisions • Capital expenditures decisions
Tactical Level: tactical planning level includes. 1. Budgets are prepared 2. Staff levels are planned 3. Working capital planning is undertaken 4. Advertising programs are formulated
5. Research projects are selected 6. Products improvements should be indicated 7. Decisions regarding plane re-arrangements 8. Non routine matters decisions. 9. Rules governing operational aspects of planning should be framed. 10. Framework for measure, appraising and improving management Performance is evolved.
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 5 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Operational planning Level: in operational level there are 1. Development of operational controls 2. Control of hiring 3. Control of credit extensions 4. Placement of advertisement is to be controlled 5. Planning of production schedules 6. Worker’s efficiency should be measured, appraised and improved.
Annual planning cycle Annual planning cycle is very helpful for banking sector; it may cause to achieve the organizational goals effectively. It includes the following steps.
Participatory planning be used
Guidance from previous stage
Top-down management style at the corporate level
Annual corporate plan be developed
Planning manuals to guide planning program at each level
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Bottom-up response must be encouraged
Page 6 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Requirements for financial control system Financial control system must be developed to achieve the financial plans of any organization. It includes the following points. 1. Budgets and manpower projections should be carefully considered 2. Prompt information for quick actions 3. Forward looking approach 4. Management by exception for important areas and no need to review
scheduled activities 5. The system should be objective; quantitative measurements should be
undertaken, e.g. man hours, rupees, computer hours, machine hours, etc. 6. Flexible and cost effective system 7. It should be simple. 8. It should indicate corrective action, three directions are as under • Show departures • What can now be done? • Who is responsible?
MANAGEMENT BY OBJECTIVE (MBO) MBO introduced by Peter F. Drucker in his book “Practice of Management” In brief it is a philosophy of management that seeks to convert organizational goals into personal goals to achieve satisfactory performance outcomes. All employees participate in the development of objectives and exercise to accomplish them
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 7 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore MBO PROCESS MBO process goes through the following four stages.
SETTING GOALS
PERIODIC REVIEW
MBO PROCESS
FORMULATI ON OF ACTION PLANS
SELF CONTROL
Implementing MBO is a challenging task. This can be achieved through the following logistics. 1. Support and commitment by top management 2. MBO should be accepted by top management as a philosophy 3. Input measures should be used rather output measures 4. Resolution of conflicts should be proper focus 5. persons should be rewarded for outstanding performance 6. differential rewards should be provided 7. measurable and visible goals should be selected 8. constraints must be reduced to be minimum level By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 8 of 8
Submitted by:
Hafiz Muhammad Amer Nisar
Date: March 11, 2009
Corporate Planning By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 1 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Planning Planning is a future course of action. It stimulates thinking in advance and to be prepared what is going to be happening in the future.
Corporate planning Corporate planning represents a formal, structured approach to achieving objectives and to implementing the corporate strategy of an organization. It has traditionally been seen as the responsibility of senior management. The use of the term became predominant during the 1960s but has now been largely superseded by the concept of strategic management. Generally corporate planning has been divided into these four categories w.r.t time. (Banking sector) 1
Short term
one year
2
Intermediate term
2 to 3 years
3
Long term
5 to 10 years
4
Perspective
15 to 20 years
As planning deals with the future which is uncertain, there are many difficulties for the corporate planners. Normally plans are developed under several sets of assumptions. Planning differs in MICRO and MACRO levels.
Need of Planning
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 2 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore It is very important to plan for any corporate either at micro or macro level, because without planning it is very difficult rather impossible to survive in the market. Corporate Planning plays a vital role to achieve the desired goals and objectives.
Planning process Following stages are considered as the process of planning. • Identification of objectives • Search for opportunities • Translating opportunities into specific course of action •
Setting specific objectives
• Review and revision of plans for feedback Objective setting There are two types / categories of objectives (internal & external) in business now days. Internal objectives
external objectives
Profit
Client Satisfaction
Growth
Social Needs
Market Penetration Leadership Productivity
Stated Objectives: Stated objectives are official statements found in the charters, annual reports, hanged on walls, and public relation announcements. One important point, that there must be no contradiction between state objectives and organizational goals.
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 3 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Hierarchy of Objectives
ORGANIZATIONAL OBJECTIVES
DIVISIONAL OBJECTIVES
SECTIONAL OBJECTIVES
DEPARTMENTAL OBJECTIVES
Levels of planning: Following are the three levels of planning 1) Strategic 2) Tactical 3) Operational
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 4 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Strategic Level: In strategic level the following are the key points helping to achieve the organizational goals. • Identifying vision • Determining mission • Company objectives should be identified • Organization should be planned • Policies to be set up i. Personnel ii. Marketing iii. Research • New product lines should be spelled out • New divisions should be acquired • Non-routine matters decisions • Capital expenditures decisions
Tactical Level: tactical planning level includes. 1. Budgets are prepared 2. Staff levels are planned 3. Working capital planning is undertaken 4. Advertising programs are formulated
5. Research projects are selected 6. Products improvements should be indicated 7. Decisions regarding plane re-arrangements 8. Non routine matters decisions. 9. Rules governing operational aspects of planning should be framed. 10. Framework for measure, appraising and improving management Performance is evolved.
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 5 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Operational planning Level: in operational level there are 1. Development of operational controls 2. Control of hiring 3. Control of credit extensions 4. Placement of advertisement is to be controlled 5. Planning of production schedules 6. Worker’s efficiency should be measured, appraised and improved.
Annual planning cycle Annual planning cycle is very helpful for banking sector; it may cause to achieve the organizational goals effectively. It includes the following steps.
Participatory planning be used
Guidance from previous stage
Top-down management style at the corporate level
Annual corporate plan be developed
Planning manuals to guide planning program at each level
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Bottom-up response must be encouraged
Page 6 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore Requirements for financial control system Financial control system must be developed to achieve the financial plans of any organization. It includes the following points. 1. Budgets and manpower projections should be carefully considered 2. Prompt information for quick actions 3. Forward looking approach 4. Management by exception for important areas and no need to review
scheduled activities 5. The system should be objective; quantitative measurements should be
undertaken, e.g. man hours, rupees, computer hours, machine hours, etc. 6. Flexible and cost effective system 7. It should be simple. 8. It should indicate corrective action, three directions are as under • Show departures • What can now be done? • Who is responsible?
MANAGEMENT BY OBJECTIVE (MBO) MBO introduced by Peter F. Drucker in his book “Practice of Management” In brief it is a philosophy of management that seeks to convert organizational goals into personal goals to achieve satisfactory performance outcomes. All employees participate in the development of objectives and exercise to accomplish them
By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 7 of 8
HAILEY COLLEGE OF BANKING AND FINANCE University of the Punjab, Lahore MBO PROCESS MBO process goes through the following four stages.
SETTING GOALS
PERIODIC REVIEW
MBO PROCESS
FORMULATI ON OF ACTION PLANS
SELF CONTROL
Implementing MBO is a challenging task. This can be achieved through the following logistics. 1. Support and commitment by top management 2. MBO should be accepted by top management as a philosophy 3. Input measures should be used rather output measures 4. Resolution of conflicts should be proper focus 5. persons should be rewarded for outstanding performance 6. differential rewards should be provided 7. measurable and visible goals should be selected 8. constraints must be reduced to be minimum level By: Amer Nisar
MBA (IRM) - Roll # 20 Sec (A)
Page 8 of 8
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