UNIT 3: ESSENTIALS OF PLANNING

OBJECTIVES

1. Understand what managerial planning is and

why it is important.

2. Summarize a general framework for planning

3. Explain the responsibilities of top managers

4. Describe functions of strategic planning

READING 1: GENERAL FRAMWORK FOR PLANNING

A. Discussion:

1. What’s managerial planning? Why is it important?

2. What are steps in planning?

B. Reading

GENERAL FRAMEWORK FOR PLANNING

Planning is a complex and comprehensive process involving a series of overlapping and

interrelated elements or stages, including strategic, tactical, and operational planning.
Strategic planning establishes master plans that shape the destiny of the firm.

A second type of planning is needed to support strategic planning, such as how to build
motorcycles that fit the preferences of younger motorcyclists. Tactical planning translates
strategic plans into specific goals and plans that are most relevant to a particular
organizational unit. The tactical plans also provide details of how the company or business unit
will compete within its chosen business area. Middle managers have the primary responsibility
for formulating and executing tactical plans. These plans are based on marketplace realities when
developed for a business.

A third type of planning is aimed more at day-to-day operations or the nuts and bolts of doing
business. Operational planning identifies the specific procedures and actions required at
lower levels in the organization. If Harley-Davidson wants to revamp an assembly line to
produce more sports bikes, operational plans would have to be drawn. In practice, the distinction
between tactical planning and operational planning is not clear-cut. However, both tactical plans
and operational plans must support the strategic plan such as revamping manufacturing and
marking to capture a larger group of young cyclists.

The framework presented in Exhibit below summarizes the elements of planning. With slight
modification the model could be applied to strategic, tactical, and operational planning. A
planner must define the present situation establish goals and objectives, and analyze the
environment in terms of aids and barriers to goals and objectives. The planner must also
develop action plans to reach goals and objectives, develop budgets, implement the plans,
and control the plans.

This reading examines each element separately. In practice, however, several of these stages
often overlap. For example, a manager might be implementing and controlling the same plan
simultaneously. Also, the planning steps are not always followed in the order presented in the
following Exhibit. Planners frequently start in the middle of the process, proceed forward, and
then return to an earlier step. This change of sequence frequently happens because the planner
discovers new information or because objectives change. Also, many managers set goals
before first examining their current position.

Exhibit

1. Define the present situation

 ↓

2. Establish goals and objectives

3. Analyze the environment in terms of aids and barriers to goals and objectives.

4. Develop action plans to reach goals and objectives

5. Develop budgets

6. Implement the plans

7. Control the plans.

Define the Present Situation

Knowing where you are is critical to establishing goals for change. Defining the present situation
includes measuring success and examining internal capabilities and external threats.

Establish Goals and Objectives

The second step in planning is to establish goals and identify objectives that contribute to the
attainment of goals. (Goals are broader than objectives, whereas objectives function as
smaller goals that support the bigger goals.)
Analyze the environment to Forecast Aids and barriers to Goals and Objectives

As an extension of defining the present situation, the manager or other planner attempts to
predict which internal and external factors will foster or hinder attainment of the desired ends.

Develop Action Plans to Reach Goals and Objectives

Goals and objectives are only wishful thinking until action plans are drawn. An action plan
consists of the specific steps necessary to achieve a goal or objective.

Develop Budgets

Planning usually results in action plans that require money to implement.

Implement the Plans

If the plans developed in the previous five steps are to benefit the firm, they must be put to use.
A frequent criticism of planners is that they develop elaborate plans and then abandon them in
favor of conducting business as usual. One estimate is that 70 percent of the time when CEOs
fail, the major cause of failure is poor execution, not poor planning. Poor execution in this study
included not getting things done, being indecisive, and not delivering on commitments.
Furthermore, execution is considered to be a specific set of behaviors and techniques that
companies need to master in order to maintain a competitive advantage.

Control the Plans

Planning does not end with implementation, because plans may not always proceed as conceived.
The control process measures progress toward goal attainment and indicates corrective action if
too much deviation is detected. The deviation from expected performance can be negative or
positive. Progress against all of the goals and objectives mentioned above must be measured.
One goal was to hold on to much of the existing customer base.
Make contingency Plans

Many planners develop a set of backup plans to be used in case things do not proceed as hoped.
A contingency plan is an alternative plan to be used if the original plan cannot be
implemented or a crisis develops. (The familiar expression "Let's try plan B" gets at the
essence of contingency planning

Contingency plans are often developed from objectives in earlier steps in planning. The plans are
triggered into action when the planner detects, however early in the planning process, deviations
from objectives. Construction projects, such as building an airport hangar, are particularly prone
to deviations from completion date because so many different contractors and subcontractors are
involved. An exit strategy might be part of the contingency plan.
C. Exercises

I. Read the text and answer the following questions.

1. What is planning?
Planning is a complex and comprehensive process involving a series of overlapping and
interrelated elements or stages, including strategic, tactical, and operational planning.
2. What is the main function of strategic planning?
Strategic planning establishes master plans that shape the destiny of the firm.

3. What is the role of tactical planning?

Tactical planning translates strategic plans into specific goals and plans that are most
relevant to a particular organizational unit. The tactical plans also provide details of how
the company or business unit will compete within its chosen business area.
4. What are tactical plans based on?
These plans are based on marketplace realities when developed for a business.
5. What does operational planning identify?
Operational planning identifies the specific procedures and actions required at lower
levels in the organization.
6. What are elements of planning?
 Define the present situation.
 Establish goals and objectives.
 Analyze the environment for aids and barriers.
 Develop action plans.
 Develop budgets.
 Implement the plans.
 Control the plans.
7. What does the planner have to do?
A planner must define the present situation establish goals and objectives, and analyze
the environment in terms of aids and barriers to goals and objectives. The planner must
also develop action plans to reach goals and objectives, develop budgets, implement the
plans, and control the plans.

8. What does defining the present situation include?

 Defining the present situation includes measuring success and examining internal
capabilities and external threats.
9. When are contingency plans often developed?
Contingency plans are often developed from objectives in earlier steps in planning.
10. What does an action plan consists of?
An action plan consists of the specific steps necessary to achieve a goal or objective.

II. Find words or phrases in the text which mean the same as the following

1. A firm’s overall master plan that shapes its destiny (Paragraph 1)

Strategic planning

2. Planning that translates a firm’s strategic plans into specific goals by organizational
unit. (Paragraph 2)

Tactical planning

3. Managers who are neither executives nor first- level supervisors, but who serve as a
link between the two groups. (Paragraph 2)

Middle managers

4. Planning that requires specific procedures and actions at lower levels in an

organization.(Paragraph 3)

Operational planning

5. A customary method for handling an activity. It guides action rather than thinking.
(Paragraph 3)

Procedure

6. The specific steps necessary to achieve a goal or an objective. (Paragraph 4)

Action plan
7. An overall condition one is trying to achieve, or a conscious intention to act.
(Paragraph 5)

Objective

8. Extend over so as to cover partly. (Paragraph 5)

 Overlap
9. A statement of an intention to inflict pain, injury, damage, or other hostile action on
someone. (Paragraph 6)
Threat
10. A fence or obstacle that prevents movement or access. (Paragraph 8)

Barrier

III. Fill in the blank with an appropriate word from the passage. If possible, do not look
back at the original reading.

1. Planning is a complex and comprehensive ___process____________ involving a series of

___ overlapping______ and ____ interrelated______ elements or stages, including
strategic, tactical, and operational planning.
2. The tactical plans also provide ____ details_____ of how the company or business units
will ___ compete____ within its chosen business area.
3. A third type of planning is aimed more at ___ day-to-day_____ operations or the nuts and
bolts of doing business.
4. Planning does not end with ___ implementation____, because plans may not always
proceed as conceived.
5. Many planners develop a set of ____ contingency___ plans to be used in case things do
not proceed as hoped.
6. Contingency plans are often developed from ____ objectives____ in earlier steps in
planning.
7. An__ exit______ strategy might be part of the contingency plan.

IV. All the words in the box concern planning. Match each term with the correct definition.
action plan budget business plan contingency plan

interim plan objectives operational plan planning

strategic plan provisional plan tactical plan

1. A plan that focuses on the whole organization, internal and external factors, and actions
necessary to reach long-term goals. . strategic plan .
 2. A process that focuses on the future of an organization and how to reach certain target.
____ planning _______
3. The results or targets that management thinks are desirable.______ Objectives ______
4. A plan for a specific part of the wider organization, usually narrower in scope and over a
shorter time period.____ tactical plan _______
5. A specific short-term plan to realize a narrow single objective.____ Operational plan ___
6. A short – term and temporary plan.___ Interim plan _____
7. A trial plan that may or may not be adopted permanently.___ Provisional plan _____
8. A plan which explains a new commercial activity or new company and how to start
it._____ business plan __
9. A plan of what to do, often indicating individual responsibilities, often short-term. _____
Action plan ______
10. A plan which sets out the forecasts cost of a project or activity.____budget______
11. A reserve plan which will only be used if necessary.__ contingency plan____

READING 2: TOP MANAGEMENT- PLANNING AND STRATEGY

A. Discussion
Read the following case study and then answer the question below.

Richard Thomas, a brilliant electronics engineer, left the company he had worked with for ten
years in order to set up his own business. He felt there was a gap in the market for low – priced
computer components.

Richard’s bank manager was impressed by his experience and by the business plan he presented.
An overdraft facility of £15,000 provided the start-up capital of the firm, Computex.

He began by hiring another person to help him develop the components. The two of them spent
the next six months producing the type of product they felt the market needed. When they had
built up a good supply of components, they set about trying to sell them. To Richard’s surprise,
however, this proved very difficult. Many potential customers seemed to be suspicious of the low
prices of the products. Why were they so much cheaper than those of more famous, well –
established competitors they wanted to know? Other customers clearly saw Richard’s company
as a newcomer not to be trusted – a cowboy outfit who would be here today and gone tomorrow.
It was over a year before Richard got his first order. By that time, he had an overdraft of £40,000
and no more money to make further supplies of components. He was spending all his time
advertising the products, running around to meet customers and trying to persuade them to buy.

Three months later, a few large orders were received, but Richard realised that he would have to
wait two months or do before being paid.

At that point, the bank manager lost confidence in the business. He informed Richard that he was
calling in the overdraft. ‘Give me some time to look around for more capital’, Richard said. ‘All
right, I’ll give you a month, but no more,’ was the bank manager’s reply.

After rushing around and talking to a lot of people, Richard received firm offers from two
venture capital companies. The first was prepared to invest £200,000 in return for an 80% share
of Richard’s business; the second was willing to put up £250,000 for a 90%share.

This was the situation facing Richard Thomas fifteen months after he has set up his
hightechnology enterprise.

1. Could Richard have avoided the situation he now finds himself in? If so, how?

Yes, Richard could have avoided his current financial crisis by taking the following steps:

 Conducting Market Research: Before investing heavily in production, he should have

conducted thorough market research to understand customer perceptions, price
expectations, and competition.
 Building Credibility: Developing a brand image and establishing trust with potential
customers through partnerships or testimonials could have mitigated skepticism about his
low-cost products.
 Phased Production Approach: Instead of producing a large inventory without
confirmed buyers, Richard could have started with small production runs to test market
response.
 Financial Planning: Securing additional funding or creating a financial buffer early on
could have prevented reliance on an overdraft facility.
 Marketing and Sales Strategy: A well-designed marketing strategy, focusing on value
rather than just low prices, might have helped overcome customer doubts.

2. What should he do now?

 Select a Venture Capital Offer: He should accept one of the venture capital
proposals to inject necessary funds into the business. Choosing the option with the least
loss of control (80% for £200,000) might be preferable.
  Prioritize Cash Flow Management: Focus on collecting receivables from his recent
large orders as quickly as possible. He can negotiate advance payments or shorter
payment terms.
 Build Customer Trust: Use testimonials, case studies, or endorsements from satisfied
customers to build credibility and drive more sales.
 Streamline Operations: Minimize unnecessary expenses and ensure efficient
resource allocation to maximize the value of the investment.
3. What advice would you give him about how to run the company in the future?
 Create a Strategic Plan: Develop a clear business plan with specific objectives,
milestones, and risk management strategies.
 Focus on Branding: Invest in creating a strong brand image that emphasizes quality
and reliability, even at competitive prices.
 Diversify Revenue Streams: Explore additional product lines or complementary
services to reduce reliance on a single product.
 Strengthen Financial Management: Hire a financial advisor or manager to monitor
cash flow, optimize costs, and secure future funding.
 Leverage Technology: Use digital tools and platforms for marketing, customer
engagement, and process optimization to enhance efficiency.
 Establish Partnerships: Collaborate with trusted distributors, suppliers, or industry
leaders to expand his network and credibility.
4. What problem can arise when someone starts up a high-technology enterprise?
 Market Skepticism: Customers may doubt the quality or reliability of new technology,
especially from an unproven company.
 High Development Costs: Significant upfront investment in research, development, and
production can strain financial resources.
 Rapid Technological Changes: The fast pace of technological innovation can render
products or services obsolete quickly.
 Talent Acquisition: It can be difficult to attract and retain skilled personnel without the job
security and benefits offered by larger companies.
 Intense Competition: High-tech startups often face strong competition from established
players with more resources and brand recognition.
 Regulatory Hurdles: Compliance with industry regulations and standards can be complex
and costly.
 Cash Flow Problems: Long development cycles and delayed customer payments can create
financial instability.

B. Reading: TOP MANAGEMENT- PLANNING AND STRATEGY

The top management of a company has certain unique responsibilities. One of their key tasks is
to make major decisions affecting the future of the organization. These strategic decisions
determine when the company is going and how it will get there. For example, top manager must
decide which market to enter and which to pull out of; how expansion is to be financed; whether
new products will be developed within the organization or acquired by buying other companies.
There and other such decisions share a company’s future.
Before doing any kind of strategic planning, the management must be sure of one thing. They
must decide what is the mission and purpose of their business. They also need to decide what
should be in the future. In other words, they must know why the business exists and what its
main purpose is. Deciding the mission and purpose is the foundation of any planning exercise.

Two examples will make this point clear-one British, the Spencer, one of the biggest and most
successful retailers in the Leeds, England. Ten years later there were nine market stores, and
Marks has taken into partnership Tom Spencer, the cashier of one of his suppliers. In 1926
Marks and Spencer became a public company. At that point, they could have rested on their
laurels! However, around that time, they developed a clear idea of Mark and Spencer’s mission
and purpose. Their later success was founded on this idea.They decided that the company was in
business to provide goods of excellent qualityat reasonable prices, to customers from the working
and middle classes. Providing value for money was to concentrate on selling clothing and
textiles. Later on, food products were added as a major line of business.

The second example concerns the American Telephone and Telegraph Company They decided
on their mission some sixty or years old. The head of the organization at that time, Theodore
Vail, realised that a private- owned telephone and telegraphic company might easily be
nationalized, if the company didn’t perform well the public would call for its nationalization. To
avoid this fate, it had to give efficient service to its customers. Vail and his colleagues decided
that giving service would be the mission and purpose of the organization. This became the
overall objective of the company and has remained so ever since.

Having decided on its mission and purpose, an organization will have worked out certain more
specific objectives. For example, a car firm may have the objective of producing and marketing
new models of cars in the medium-price range. Another objective may be to increase its market
share by 10% on the next five years. As soon as it has established its more specific, medium-term
objectives, the company can draw up a corporate plan. Its purpose is to indicate the strategies the
management will use to achieve its objectives.

However, before deciding strategies, the planners have to look at the company’s present
performance, and at any external factors which might affect its future. To do this, it carries out an
analysis, sometime called a SWOT analysis. First, the organization examines its current
performance, assessing its strength and weaknesses. It looks at performance indicators like
market share, sales revenue, output and productivity. It also examines its resource – financial,
human, products and facilities. For example, a department store chain may have stores in good
locations – a strength – but sales revenue per employee may be low – a weakness. Next, the
company looks at external factors, from the point of view of opportunities and threats. It is trying
to assess technological, social, economic and political trends in the markets where it is
competing. The department store chain,for example, may see the opportunity to increase profits
by providing financial services to customers. On the other hand, increasing competition may be a
threat to its very existence.

Having completed the SWOT analysis, the company can now evaluate its objective and perhaps
work out new ones. They will ask themselves question such as: Are we producing the right
products? What growth rate should we aim at in the next five years? Which new markets should
we break into?

The remaining task is to develop appropriate strategies to achieve the objective. The organization
decides what actions it will take and how it will provide the resources to support those actions.
One strategy may be to build a new factory to increase production capacity. To finance this, the
company may develop another strategy, the issuing of new shares to the public.

Company planning and strategic decision-marketing are key activities of top management. Once
they have been carried out, objectives and targets can be set lower levels in the organization.

C. Exercises
I. Decide whether the following statements are true or false.

1. The top management had to make strategic decisions which determine the future of the
company. T
The top management of a company has certain unique responsibilities. One of their key tasks
is to make major decisions affecting the future of the organization.
2. Marks and Spencer’s mission and purpose were to provide money and goods of excellent
quality to customers. F
They decided that the company was in business to provide goods of excellent quality at reasonable
prices, to customers from the working and middle classes
3. The American Telephone and Telegraph Company decided to perform well because it wanted
to be nationalized. F
Theodore Vail, realised that a private- owned telephone and telegraphic company might easily
be nationalized, if the company didn’t perform well the public would call for its
nationalization. To avoid this fate, it had to give efficient service to its customers.
4. Objectives are the results or targets that management thinks are desirable. T
5. Before deciding strategies, the planners have to look at the company’s internal and external
factors which might affect its future. T

II. Find words or phrases in the text which mean the same as the following:
1. done as a part of a plan to achieve a particular purpose (paragraph 1)
…………………STRATEGIC…………………………..
2. a business that sells goods to members of the public (paragraph 3)
…………………RETAILER………………………………………..
3. a company whose shares are freely sold and traded (paragraph 3)
……………PUBLIC COMPANY………………………………………..
4. a person or organization that buys products or services (paragraph 4)
………………CUSTOMER………………………………………
5. the percentage of sales in a market that a company has (paragraph 5)
…………………MARKET SHARE……………………………………
6. a plan for achieving an aim, especially relating to the best way for an organization to develop
(paragraph 5)
………………STRATEGY………………………………….
7. a particular quality or ability that gives someone an advantage in relation to others (paragraph
6)
………………STRENGTH………………………………………..
8. lack of a particular characteristic that would give you the ability to succeed (paragraph 6)
………………WEEKNESS………………………………………..
9. an increase in size, amount or degree (paragraph 7)
………………GROWTH……………………………………..
III. Number the following ideas 1-8, depending on the order in which they appear in the
text.
a. The American Telephone and Telegraph Company decided that its principal 
objective was to provide customers with an efficient service 3
b. The first step in planning the (long-term) future of a company is to decide on 
its overall objective. 1
c. After analyzing its strengths, weaknesses, opportunities and threats, an 
organization may re-consider its objectives 6

d. The purpose of a corporate plan is to state how management intends to 

achieve the objectives 7

e. The second planning stage is to establish more specific (medium-term) 

objectives. 4

f. Finally, management to decide what actions it should take in order to achieve 

its objectives 8

g. It is necessary for management needs to analyses the company’s current 

performance as well as external factors affecting its future before they can
draw up a corporate plan. 5

h. Marks and Spencer’s aim to provide excellent value for money has led to 
their becoming one of the world’s most successful retailers 2
IV. Complete the following sentences using suitable items from the box below
Product range sales revenue growth rate product line
market share product capacity resources productivity

1 A well- known advertising agency aims to achieve a … growth rate ….. of 20% a year.

2 This … product line …. is unprofitable. We will have to discontinue it.

3 Companies like Unilever and IBM have huge financial… resources …

4 By re- organizing the work of office staff you can often increase their…productivitY..

5 We are a small firm, so we aren’t able to offer a wide… Product range.

6 Most of Shell Oil’s … sales revenue ……… comes from overseas subsidiaries.

7 By extending our factory, we have been able to expand our… product capacity ….
8 With the help of their cheap, high- quality word- processor, the Amstrad company were able
to greatly increase their… market share ……….in the UK

READING 3: FUNCTION OF STRATEGIC PLANNING

A. Discussion

- What is strategic planning?

- What are the strategic planning steps?
- Who should be involved in the planning process?

B. Reading: FUNCTIONS OF STRATEGIC PLANNING

The function of strategic planning is to position a company for long term growth and
expansion in a variety of markets by analyzing its strengths and weaknesses and examining
current and potential opportunities. Based on this information, the company develops strategy
for itself. That strategy then becomes the basis for supporting strategies for its various
departments. This is where all too many strategic plans go astray-at implementation. The recent
business management surveys show that most CEOs who have a strategic plan are concerned
with the potential breakdown in the implementation of the plan. Unlike nineteen eighties and
nineties corporations that blindly followed their five year plans even when they were misguided,
today’s corporations tend to second guess.

An outsider can help facilitate the process, but in the final analysis, if the company doesn’t make
the plan, the company won’t follow the plan. This was one of the problems with strategic
planning in the nineteen eighties. In that era, it was an abstract, top down process involving only
a few top corporate officers and hired guns. Number crunching experts came into a company and
generated tome-like volumes filled with a mixture of abstruse facts and grand theories which had
little to do with the day to day realities of the company. Key middle managers were left out of
the planning sessions, resulting in lost opportunities and ruffled feelings.

However, more hands-on strategic planning can produce startling results. A recent surveys
queries over a thousand small to medium sized business to compare companies with the strategic
plan to companies without one. The survey found that companies with strategic plans had annual
revenue growth of 6.2 percent as opposed to 3.8 percent for the other companies.

Perhaps most importantly, a strategic plan helps companies anticipate – and survive – change.
New technology and the mobility of capital mean that markets can shift faster than ever before.
Some financial analysts wonder why they should do the planning two years ahead when market
dynamics may be transformed by next quarter. The fact is that it is the very pace of change that
makes planning so crucial. Now, more than ever, companies have to stay alert to the
marketplace. In an environment of continual and rapid change, long range planning expands
options and organizational flexibility.

C. Exercises
I. Choose the best answer
1. The primary purpose of the passage is to
(A) refute the idea that change is bad for a corporation’s long-term health
(B) describe how long-term planning, despite some potential pitfalls, can help a corporation
to grow
(C) compare and contrast two styles of corporate planning
(D) evaluate the strategic planning goals of corporate America today
(E) defend a methodology that has come under sharp attack
2. It can be inferred from the passage that, in general, strategic planning during the 1980s had all
of the following shortcomings EXCEPT
(A) a reliance on outside consultants who did not necessarily understand the nuts and bolts of the
business
(B) a dependence on theoretical models that did not always perfectly describe the workings of
the company
(C) an inherent weakness in the company’s own ability to implement the strategic plan
(D) an excess of information and data that made it difficult to get to key concepts
(E) (E) the lack of a forum for middle managers to express their ideas

3. The author most likely mentions the results of the survey of 1,000 companies in order to
(A) put forth an opposing view on strategic plans so that she can then refute it
(B) illustrate that when strategic planning is “hands-on,” it produces uninspiring results
(C) give a concrete example of why strategic planning did not work during the 1980s
(D) support her contention that strategic planning, when done correctly, can be very
successful
(E) give supporting data to prove that many companies have implemented strategic plans

4. The passage suggests which of the following about the “financial analysts” mentioned in the
last paragraph ?
(A) They believe that strategic planning is the key to weathering the rapid changes of the
marketplace.
(B) They are working to understand and anticipate market developments that are two years
ahead.
(C) Their study of market dynamics has led them to question the reliability of short-term
planning strategies.
(D) They might not agree with the author that one way to survive rapidly changing
conditions comes from long-range planning.
(E) They consider the mobility of capital to be a necessary condition for the growth of new
technology.
II. Complete the following passage with the correct form of the words in the box below.
 strategy right venture personal finance skill

planning drawback expertise set up

delegate innovative trust segment

The problems of small high- tech firms have attracted a lot of attention recently. Research shows
that many of these firms are… set up ……. (1) by talented, creative scientists . Their owners
have no trouble coming up with… innovative ………(2) products but they often cannot built on
their early success.
One reason for this is that they do not have much management … expertise …….(3). Therefore,
they have unable to develop the… skills……..(4) which are necessary for their company s
growth. They are in rush to develop product, and don’t think enough about how to market them.
When they do try to sell their products, they spend too much time trying to gain the …
trust……….(5) of potential customers. Another mistake is to underpriced their products so that
they have to……finance………(6) for future development .

Once the firm begins to grow, their owners underestimate the future costs of developing and
market new products. Lack of financial …planning…….(7) is a major weakness of such
companies . It is difficult for the high tech firm to attach the right ....personel.........(8) because it
cannot offer the same job security as a large organization.

The high- tech firms can get round some of these problems by developing special image. It can
aim at a particular...segment......(9) of the market. Customers then start seeking out the firms, so
its marketing costs are reduced. The only ...drawback.......(10) is that it may take some time
before customers accept the firm‘s new technology.

As soon as the high tech business has a certain size, it will be good idea to bring in professional
management. The founder of the firm can then...delegate.........(11) responsibility for activities
like marketing and finance. If a high tech firm needs money very badly; it may arrange a link up
with a large company. It will offer that company exclusive...rights.......(12) to its technology.
Enthusiasm, bright ideas, ...venture..... (13) capital and technology are not enough to ensure
success. Basic management....strategy.........(14) essential financial and marketing ones are also
vital.
TERMS
• Planning • Strategy

• Strategic planning • Vision

• Tactical planning • Mission

• Operational planning

• Contingency planning
TOPICS FOR WRITING

1. Some people consider thinking about and planning for the future to be a waste of time.
They argue that people should simply live in the moment. Do you agree or disagree? Use at least
one personal example in your response.

2. What is a business plan and why is it an essential first step for a start-up firm?