MANAGEMENT INFORMATION SYSYTEM

BBA-305

UNIT:-2 PLANNING AND DECISION MAKING

BY

SURESH KUMAR (ASST.PROF. AT GLBIM)

 UNIT-2 ( TOPIC 1st)

THE CONCEPT OF CORPORATE PLANNING:-

What Is Corporate Planning?

Corporate planning is setting long-term objectives and goals within the organization’s scope to
enable an environment helpful to growth in terms of revenue and profit margins. It includes
defining strategies, decision-making, and allocating resources. The corporate planning
strategy aids the whole team to work in one direction- the organization’s goals.

A corporate planning cycle is a dynamic and continuous process throughout the organization’s
life. Through planning on a corporate level, drawbacks that might prevent the growth towards
the pre-determined goals come to light, and the management can provide solutions to solve
them. Moreover, it allows the company to manage its resources more efficiently.
Key Takeaways
•Corporate planning is the process through which companies
draw a map of their plan of action that enables their growth
in quantifiable terms.

•It is typically carried out through the top-level management

of the company. It is a medium-term goal that acts as the
basis for macro-level planning, called strategic planning.

•To create a foolproof corporate plan, the organization must

collect sufficient data about their company and gain insights
into their competitor’s business model.

•It is a continuous process that helps the organization grow

continuously through constant technological developments.
Elements

As a corporate planning manager, it is necessary to look at the developmental

aspects
of the company from an outsider.- say, a competitor or customer. This helps in
drawing
a plan that considers a lot more data points. A successful corporate plan has the
six elements mentioned below:

• #1 – Information
• The first step towards creating a foolproof corporate plan is collecting
information, regardless of whether the data paints a good or bad picture of
the company’s current status.
#2 – Objectives & Strategies
Objectives refer to the overall outcome of the plan. On the other hand, strategies are
specific steps taken to reach organizational goals. For example, objectives could be
an increase in sales by 25% or responding to customer support issues within 2 hours.
Making a product the market leader by the end of the financial year through
influencer and social media marketing could be an example of a strategy.
#3 – Devising a Plan of Action
Once the objectives and goals are devised, the company must articulate a step-by-
step plan that helps its employees gain significant insights into the plan’s intricacies.
This part of the process could be fulfilled by employee training, a new approach to
production, or a change in marketing strategy.
#4 – Implementation
The action is taken toward the objectives and goals of the pillars of the
organization’s growth story. Irrespective of how well-planned a strategy is, it will
deliver average results unless implemented or executed to perfection. The
implementation comes in different forms depending on the specifics of the plan.
#5 – Monitoring
Once the implementation process is underway, the corporate
planning manager monitors the progress or decline in following
the procedure. Since the plan is not a one-time action, it must be
supervised and monitored regularly.
#6 – Evaluation
After a certain period, the manager can check for differences
after implementing the corporate planning strategy. The check
will provide the management insights into the progress, decline,
or stagnancy toward organizational goals.
Types
Since each organization is bound to have different plans based
on its organizational framework, management style, and
product, naturally, they might want to implement a plan that
fits their work style better rather than opting for a generic
method. Therefore, let us discuss different types of corporate
planning through the points below:

#1 – Tactical Planning

A tactical plan is usually implemented after a strategic plan

has been set in motion. A tactical plan is a short-term goal to
address immediate goals, which over time, contribute to the
bigger plan. Typically, a short-term goal helps tackle
hindrances that prevent the company from achieving its
medium or long-term goals.
#2 – Contingency Planning

A contingency plan is when a company develops strategies that

help them handle an event from stopping its operations. This
strategy is carried out in an adverse scenario, such as a natural
calamity or pandemic. However, a contingency plan can also be
initiated for positive events, such as a high inflow of unexpected
client funds.
#3 – Operational Planning

Operational planning is a form of action where the daily tasks of

each employee and manager are specified and monitored. It is
usually planned for a period beyond one year. However, to reach
short-term objectives that aid the enormous growth of the
business, operation planning is a wise choice as it optimally
allocates financial, physical, and human resources.
Example #1
ExxonMobil is one of the largest oil and
gas companies internationally. In their
announcement about their corporate plans
in 2022, they declared that they plan on
increasing their investments in emission
reduction solutions.
By 2027, they plan to increase
investments by $17 billion in this domain
to gain a competitive advantage over
other layers in the market and tackle
Advantages
•Reduces Uncertainty: Running a business is filled
with constant uncertainties and risks. However, an
excellent corporate plan helps the company by
forecasting risk value in the future, thereby reducing
the risk of uncertainty.
•Unity: A well-defined plan helps the employees to
understand their roles in a better manner. In addition,
since all employees are clear on their roles, there is less
conflict and higher levels of unity within the
organization.
•Aids Growth: With cooperation from employees and
constant development of the processes within the
company’s scope, objectives, and strategies and easier
to implement, a higher success rate can be expected.
Disadvantages
•Rigidity: Following a set of rules as a part of
the plan can become an inflexible environment.
As a result, it can lower the morale of
employees.
•Time: From collecting data, devising a plan,
implementing, monitoring, and evaluating, it
can take quite some time before the company
begins to see results.
•Ambiguity: Since most of the planning is
based on the prediction of the future, it cannot
be foolproof as situations opposite to the plan
can occur, and businesses can be caught off-
 strategic planning

What is strategic planning?

Strategic planning is a process in which an organization's leaders define their vision for the future and
identify their organization's goals and objectives. The process includes establishing the sequence in which
those goals should be realized so that the organization can reach its stated vision.

Strategic planning typically represents mid- to long-term goals with a life span of three to five years, though
it can go longer. This is different than business planning, which typically focuses on short-term, tactical
goals, such as how a budget is divided up. The time covered by a business plan can range from several
months to several years.

The product of strategic planning is a strategic plan. It is often reflected in a plan document or other media.
These plans can be easily shared, understood and followed by various people including employees,
customers, business partners and investors.
How often should strategic planning be done?
There are no uniform requirements to dictate the frequency of a strategic planning
cycle. However, there are common approaches.
•Quarterly reviews. Once a quarter is usually a suitable time frame to revisit
assumptions made in the planning process and measure progress by checking
metrics against the plan.
•Annual reviews. A yearly review lets business leaders estimate the metrics for the
previous four quarters and make informed adjustments to the plan.
Timetables are always subject to change. Timing should be flexible and modify to the
needs of a company. For example, a startup in a dynamic industry might revisit its
strategic plan monthly. A mature business in a well-established industry might select
to revisit the plan less frequently.
 Types of strategic plans

Strategic planning activities typically focus on three areas: business, corporate or

functional. They break out as follows:
•Business. A business-centric strategic plan focuses on the competitive aspects of
the organization -- creating competitive advantages and opportunities for growth.
These plans adopt a mission checking the external business environment, setting
goals, and allocating financial, human and technological resources to meet those
goals. This is the typical strategic plan and the main focus of this article.
•Corporate. A corporate-centric plan defines how the company works. It focuses on
organizing and aligning the structure of the business, its policies and processes and
its senior leadership to meet desired goals. For example, the management of a
research and development might be structured/select to function dynamically and
on an ad hoc basis. It would look different from the management team in finance or
HR.
•Functional. Function-centric strategic plans fit within
corporate-level strategies and provide a granular
examination of specific departments or segments such as
marketing, HR, finance and development. Functional plans
focus on policy and process -- such as
security and compliance/permission -- while setting
budgets and resource allocations.

In most cases, a strategic plan will involve elements of all

three focus areas. But the plan may lead toward one focus
area depending on the needs and type of business
Difference Between Corporate Planning And Strategic
Planning
Let us understand the difference between corporate planning and strategic planning
through the table below:
Basis Corporate Planning Strategic planning
Time Short to medium-term plans. Long-term plans.

Strategic planning devices a plan

A corporate plan sets limits or
Objective for the overall direction of the
actions within the organization.
company.

A corporate plan responds to the Strategic planning selects the

Responding Factor market segment in which the market segment it wants to deal
organization is placed. with.

A corporate plan is adopted to A corporate plan is drafted,

Interconnection achieve the strategic objectives of keeping the intentions of the
the organization. strategic objectives in mind.

Internal and external factors of the

Scope of Work Internal aspects of the company
organization
Concept of decision making :-
Literally speaking , decision making has been taken from the word “decide” ,which
is a Latin word meaning ‘cut off’ or to come to a conclusion .A decision represents
a course of behavior selected from a number of possible alternatives.
Decision-making is a process of selecting one optimum
alternative from among alternatives of a course of action. Thus, a decision is an
final product of the decision-making process.
However, if there is no option ,i.e. only one alternative is available , there is no
decision to be made.
For example , when you drive your car to a certain destination and there is only
one road , you do not have to make a decision .The will road will take you
there .But if you come to a fork , you have to decide which way to go . In fact ,
whenever more than one alternate action is available , a decision must be made.
In business ,there can be dozens , hundreds , or even millions of different course
of action available to achieve a desired result.
Feature of Decision making :-
Firstly we describe the different kind of tools :