Ch9 Corporate Planning Flashcards
Corporate plan
Plan containing details on firms central objectives and strategies to achieve them
Corporate planning
Process used by companies to set longterm plans to meet certain objectives
Componenents of corporate plans
- Overall objectives to be achieved in a time span (eg profit target)
- business strategies to achieve these objectives
- main objectives for key depts derived from overall objective
Benefits of corp plan
- sense of purpose
- control and review
- forces strength/weakness analysis (strategic analysis)
Cor plan limitations
- unexpected events
- plans may male business inflexible
Main internal influences of corp plan
- finances
- operating capacity
- skills of managers/experience
- employee numbers
- culture of org
Main external influences on corp plan
- macro conditions
- govt policy changes
- loan availibility
- tech changes
- competitor actions
Corporate culture
Values, attitudes and beliefs of workers.
Influences how they interact w/ eachother and other stakeholders
Types of corporate culture
- Power culture
- Role culture
- Task culture
- Person culture
- Entrepeneurial culture
Power culture
- power in hands of few (seen in autocratic)
Role culture
- clear assigned roles for each member
- power and influence depends on role.
Little creativity
Task culture
Task culture
- groups formed to solve specific task
- communication like matrix
- creativity and decision taking empowered
Person culture
- individuals given freedom to express themselves and take decisions (eg directors)
Very creative but conflicting aims risk
Entrepeneurial culture
- encourages management & workers to take risk and be creative w new ideas and ventures
- success rewarded & failiure not critisized
Change management
Planning, implementing, controlling and reviewing org from one state to another
When does a firm need to change corp culture
- family firm going public causes investors to demand talent focus
- failing product may need creativity to cook up smth better (task culture needed)
- firm may want to diversify/blue ocean (entrepeurial culture needed)
- workers may be unproductive cuz they feel unfulfilled (person based culture may be needed)
Best way to change culture
- concentrate on strengths
- replace managers unable/unwilling to change
- establish new objectives/mission statement
- consult employees when deciding new culture otherwise they feel imposed
- train employees in new culture
- avoid rewarding success in old culture ways
Importance of corp culture
- establishes norms of workers
- determines how employees/managers treat eachother
- can be good publicity if good culture
- if workers like culture more productive
- influences types of objectives/strategies (ppl based will make decisions benefiting workers more)
Transformational leadership
Leadership in which leader consults the workers to identify need for change
and cooperates with them to implement change
while inspiring them to accept it
Role of transformational leader
- influence employees with their own qualities
- inspire employees to accept changes
- make workers feel fulfilled and recognised
- challenge employees to worl harder
Importance of tranformational leadership
- higher success rate of change
- better change due to worker input
- allows business to be flexible and able to change quick
- leads change rather than imposing it
- motivation
Busines process reengineering
Fundementally redesigning the business processes to increase performance A LOT
- Eg getting machines to make cars
Project champion
- person assigned to ensure everyone is on board and on track to complete a project on time effectively
- explains benefit of change and helps achieve it
