1. Appraise the formal planning efforts at the Copley Company for the period 1981 to 1984. INTRODUCTION Copley Manufacturing Company was primarily a manufacturer of a wide line of cutting tools and related parts and supplies. Late in 1980, Mr.
Sagan, director of corporate development and Mr. Albert, executive vice president agreed that regular formal planning should become part of management’s way of life at Copley. EXECUTIVE SUMMARY In 1981, Copley Manufacturing Company had begun formal corporate wide planning. The formalized planning was ingrained into life at Copley through a series of visits by corporate groups, planning review meetings, as well as planning response meetings. However in 1982, the planning system was modified where the planning committee separated the formal planning cycle into three phases – Strategy Development phase, Quantitative phase and Action phase. In 1983, the planning process was largely influenced and administered by Mr.
Tyler, the executive vice president. For recent development in 1984, the actual responsibility for planning has been placed directly on the executive vice president, group vice presidents and also division managers. DISCUSSION OF SITUATION IN 1981 In February 1981, Mr. Albert formed a corporate planning committee as the first step to move toward a regular formal planning process.
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In the discussion held, the planning committee decided on the process of ingraining the formalized planning into the life at Copley. On 21 st March 1981, Mr. Albert requested the division general managers to sketch out a plan for regular formal planning and schedule for starting such an effort. The main objective of that effort is to issue guidelines for the preparation of divisional “provisional plans” (Brethauer 1999).
On 6 th June 1981, the corporate groups, which always included Mr. Albert and Mr.
Sagan, had visited to the divisions constantly as an initial concept of formal planning activities. In the introductory meetings, Mr. Albert explained the importance of the planning effort, and Mr. Sagan explained the details. On 1 st October 1981, the divisions, as well as the corporate staff groups, were asked to produce and submit the five-year plans. In November and December 1981, planning review meetings were held to review the divisional plans.
On 28 th December 1981, the planning response meetings were started. In these meetings, the planning committee commented on the divisional presentation to the divisional general managers. Typical of these meetings was that of the Cutting Tool Division, which was headed by Mr. Tyler, the general manager. COMMENTS AND PROBABLE REASONS IN 1981 Generally, it was felt that the planning effort at Copley in 1981 had made a good beginning because most agreed that the plans had provided useful information to aid the top management to obtain better understanding on Copley’s business activities. DISCUSSION OF SITUATION IN 1982 In 1982, formal planning had been significantly affected by certain organizational changes, such as the elevation of Mr.
Albert to president, the creation of two corporate staff functions, the further delegation of operating responsibility and the segregation of the Cutting Tool Division. In the same year, the planning committee decided to divide the formal planning cycle into three phases, which were the Strategy Development phase, the Quantitative phase and the Action phase. The division’s strategic plans were presented to corporate management by each division in a planning review meeting and subsequently evaluated in a planning response meeting (Lee & Ke 2004).
Unlike 1981, these meetings followed each other on the same day in 1982. In 1982, the progress of the planning efforts was disrupted by certain developments; chief among them was the change in the top management. Besides that, considerable management effort was also required to assimilate the recently acquired large company and to work out the segregation of the old Cutting Tool Division into two new divisions.
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The Four Functions of Management Management is accomplished through four functions of management: planning, organizing, leading, and controlling. According to Bateman-Snell, planning is the management function of systematically making decisions about the goals and activities that an individual, a group, a work unit, or the overall organization will pursue in the future. Organizing is the ...
On 11 th July 1982, after completion of the strategy development phase, it decided against proceeding with the quantitative phase due to the developments noted above. However, the staff departments were recommended to commence the planning process by analyzing past results and identifying resources, strengths, weaknesses, major threats, and major opportunities of their divisions. In 24 th October 1982, Mr. Albert reaffirmed his intention to emphasize planning at Copley by setting specific goals, allocating resources, measuring progress, and emphasizing more on the delegation of responsibility and also in the measurement of performance against determined goals (Hicks 1999).
COMMENTS AND PROBABLE REASONS IN 1982 Generally, the progress of the planning effort in 1982 was temporarily obstructed by several organizational changes and developments in Copley.
It was disruptive to the planning effort because considerable management effort had been placed on managing the acquisition of new company and on working out the segregation of divisions. DISCUSSION OF SITUATION IN 1983 In 1983, the planning process was largely influenced and administered by Mr. Tyler, executive vice president. The division managers were required to reduce the number of pages for each product group strategy and the related financial five-year plan in order to allow the divisional management to have more time for strategic considerations (Tucker 1999).
Besides that, the management review process was also altered. Divisional presentations were replaced by two other meetings, which are a one-hour “pre-meeting” and a three-hour meeting. During the pre-meeting, Mr. Albert and Mr. Tyler explained Copley’s strategy and acquisition policy, and also reviewed the findings and conclusions of the Product Line Study.
The division manager had to explain and defend the division’s strategy for the coming year. In the three-hour meeting, the division manager and his staff had to present their plans. COMMENTS AND PROBABLE REASONS IN 1983 Generally, the planning effort in 1983 was a success since Copley recovered financially in net sales, as well as in earnings per share. The main reason of the success was the conduct of SWOT analysis (Refer to Appendix) for the past few years to gain a proper view on the strengths, weaknesses, opportunities and threats of Copley. DISCUSSION OF SITUATION IN 1984 For recent development, the actual responsibility for planning has been placed directly on the executive vice president, the group vice presidents and also the division managers.
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In 1984, Fred Fisher became the director of corporate development when Mr. Sagan left Copley for some reasons. However, his job description was rewritten to put emphasis on the planning and execution of growth through acquisition. In January 1984, the format for the divisional planning presentations had been changed by creating a system of informing all key managers within Copley of each division’s long-range plans and broad strategies (Hicks 1999).
COMMENTS AND PROBABLE REASONS IN 1984 Generally, it was strongly believed that formal strategic planning was a way of life at Copley. The planning effort in 1984 would achieve impressive success as well because the planning process in 1983 followed pretty well with the steps that had been laid out.
SUMMARY OF OVERALL SITUATION Copley Manufacturing Company, a manufacturer of a wide line of cutting tools and related parts and supplies, had begun formal corporate wide planning in 1981. The planning effort in 1981 was considered as a good start since it provided supportive information of the business activities. In early 1982, Copley decided to ingrain the process formalized planning into life at Copley. However, the progress of the planning effort in 1982 was affected by the organizational developments. Later in 1983, the alteration of administer at ion for the planning process had led the planning effort to a success. For recent development in 1984, it was still strongly believed that the formal strategic planning was a way of life at Copley.
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Ask five or ten different people for a definition of strategic planning or decision making or even planning and you will probably receive five or ten different answers. Most agree that strategic planning is a way to identify long-term goals and to direct your company toward fulfilling those goals. Most also will agree that decision making is a cognitive activity involving the interplay of ...
2. Identify the steps you would take for formal planning at Copley. An organization can improve its effectiveness if it can forecast its environment, anticipate problems and develop a formal strategic plan to respond to those problems (Brethauer 1999).
Formal strategic planning is the process of deciding on the programs that the organization will undertake and on the approximate amount of resources that will be allocated to each program over the next several years. According to Lee & Ke (2004), the process of formal planning to be taken at Copley involves six steps: (1) Reviewing and Updating the Strategic Plan from Last Year, (2) Deciding on Assumptions and Guidelines, (3) First Iteration of the Strategic Plan, (4) Analysis, (5) Second Iteration of the New Strategic Plan, and (6) Review and Approval.
(1) Reviewing and Updating the Strategic Plan from Last Year The first step to be taken for formal planning at Copley is to review and update the strategic plan that was agreed to last year. The actual experience for the beginning months of the current year is extrapolated for the current best estimate of the year as a whole. As Tucker (1999) had mentioned, adequately flexible computer program is used to generate the estimation because it can extend the impact of current forces to the years beyond the current year. The implications of new program decisions, as well as the assumptions and guidelines about external forces, are incorporated in the strategic plan. The strategic plan is updated by the planning committee frequently. (2) Deciding on Assumptions and Guidelines The second step to be taken for formal planning at Copley is to decide on assumptions and guidelines on the updated strategic plan.
Those broad assumptions included selling prices and market conditions are reexamined and changed to incorporate the latest information. Meanwhile, the principal guidelines included assumptions about wage and salary increases, new or discontinued product lines and selling prices. A rough estimation is enough for the top management to make decisions about the targeted objectives in the plan years and about the key guidelines on planning of achieving those objectives (Brethauer 1999).
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Strategic planning has its own language Gerald Graham Everyone, it seems, engages in strategic planning. For some organizations, the strategic plan provides zest and vigor; for others it is just a big yawn. What is the difference? Strategic planning is nothing more than first, deciding what you want to become; second, deciding how you will get there, and third, allocating resources to achieve your ...
An annual meeting of corporate and divisional general managers is held to discuss the proposed objectives and guidelines.
(3) First Iteration of the Strategic Plan The third step to be taken for formal planning at Copley is the first iteration of the new strategic plan. All the divisions in Copley prepare the “first cut” of the strategic plan using the assumptions, the objectives and the guidelines. The divisional staffs do much of the analytical work, while the divisional general managers make the final judgments. Referring to Hicks (1999), the divisional personnel may seek the advice of the planning committee in the development of the plans. Members of the planning committee regularly visit the divisions during this process in order to clarify the guidelines, assumptions and instructions. Generally, they assist in the planning process.
(4) Analysis The forth step to be taken for formal planning at Copley is to analyze the strategic plan in depth. The divisional plans are aggregated into an overall corporate strategic plan and this plan is analyzed by the members of planning committee, and the executives of marketing and other functional departments (Lee & Ke 2004).
The planning committee in the divisions also discuss, resolve and report certain problems to corporate management, at which point they are the basis for discussions between the corporate managers and the divisional general managers. These discussions are the heart of the formal planning process and they usually requiring several hours and often going on for a day or more in each division. (5) Second Iteration of the New Strategic Plan The fifth step to be taken for formal planning at Copley is the second iteration of the new strategic plan. After analyzing the first submission, a revision of the plans of only certain divisions is needed (Hicks 1999).
However, this may lead to changes in the assumptions and guidelines that affect all divisions. Technically, the revision is much simpler to prepare than the original submission. But organizationally, it is the most painful part of the process because it calls for difficult decisions. (6) Review and Approval The final step to be taken for formal planning at Copley is to do the final review and approve the strategic plan. The revised plan is discussed at length in a meeting of the members of planning committee. Then, the plan is presented at a meeting of the board of directors and the director of corporate development gives the final approval.
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VII. Recommendations VIII. Conclusion IX. References I. Abstract The primary objective of this paper is to examine the Human Resources Planning and Strategic Change for Wal-Mart, the world’s largest retailer. In this context, the authors analyze the employee selection, training and development of the company as well as studying the performance & compensation management, strategy evolution and ...
As indicated by Brethauer (1999), the approval should come prior to the beginning of the budget preparation process because the strategic plan is an important input to that process. CONCLUSION In conclusion, formal strategic planning is an important implementation for most of the company. Therefore, Copley must follow all the necessary steps in order to develop a great and complete formal strategic planning to improve the company as a whole. REFERENCEBrethauer, D. 1999, The Power of Strategic Costing: Uncover Your Competitors’ and Suppliers’ Costs, AMACOM. Hicks, D.
T. 1999, Activity-Based Costing: Making It Work for Small and Mid-Sized Companies, New York: John Wiley & Sons. Lee, A. & Ke, K. , 2004, Managerial Control Systems: A Strategic Perspective, McGraw Hill, New York.
Tucker, K. 1999, Scenario Planning, Association Management. BIBLIOGRAPHY Banker, Rajiv, D. & Holly, H. J. 1993, “An Empirical Study of Cost Drivers in the U.
S. Airline Industry”, The Accounting Review, pp. 576-601. Brethauer, D. 1999, The Power of Strategic Costing: Uncover Your Competitors’ and Suppliers’ Costs, AMACOM. Cooper, R.
& Slag mulder, R. 1999, Supply Chain Development for the Lean Enterprise: Inter organizational Cost Management, Productivity Press. Hicks, D. T. 1999, Activity-Based Costing: Making It Work for Small and Mid-Sized Companies, New York: John Wiley & Sons. Lee, A.
& Ke, K. , 2004, Managerial Control Systems: A Strategic Perspective, McGraw-Hill, New York. Shank, J. K.
& Vijay, G… 1993, Strategic Cost Management, New York: Free Press. Tucker, K. 1999, Scenario Planning, Association Management. APPENDIX SWOT Analysis of Copley Manufacturing Company Strengths M Cutting Tool Division was successful as being the largest division in 1983, with eight other operating divisions. M Formal corporate wide planning was initiated in 1981 and modified in later years, leading Copley to attain success.
M The top management had been continuously putting effort in making planning a way of life for Copley. Weaknesses M The 1982 changes in top management were temporarily disruptive to the planning effort. M Considerable effort was required to assimilate the acquired company and work out the split-up of Cutting Tool Division. M Division managers had been planning largely to satisfy the requirements but had failed to commit to the plans. Opportunities M The 10-year look indicated that Copley’s profit was sensitive to cyclical swings, and large cash flow could be expected. M Copley was mainly concerned in achieving future outgrowth through acquisition and merger.
M Copley is expected to reach a minimum annual profit growth of 10 percent and a return on equity of 12. 5 percent. Threats M The depressed market conditions might result in Copley’s extensive loss. M It was fearful that Copley would revert to a short-term orientation if it continued along the present path. M There is a great tendency in American business to over manage, over plan, over staff, and over organize.
