UNIT 2

Corporate Planning

Corporate planning is setting long-term objectives and goals within the organization’s
scope to enable an environment conducive 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.

Corporations are entities that are designed around a certain set of elements
that determines the shape of a business. Among them, the core of the business
is important. This refers to the major business activity. For an instance, it can be
either producing a product, delivering a service, or a conjunction between the
two. Depending on the product or the service the company produces, there is a
set of buyers known as the target audience. So, all these elements are
managed by the corporate plan of the company
A corporate planning cycle is a dynamic and continuous process throughout the
organization’s life. Through planning on a corporate level, hurdles that might hinder 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.
Strategic Planning
By having a strategy plan, it is expected to determine a long-term
direction of a company. Also, the competitive edge of the company is
achieved by executing the strategy. Therefore, gaining competitive
advantage is also addressed in this regard. These facts depict that strategic
plan always address the entire company. Therefore, this involves observing
the environment that is really volatile in nature and determining changes
accordingly. This scanning aspect requires research and development in the
company level. As strategic planning determines the long-term direction of
the company, setting mission and vision is also addressed. Allocating
resources among different projects in order to achieve the end state of affairs
happens in the perspective of strategic planning. There are personnel called
strategic managers in a company. They are responsible for scanning the
environment and imposing alterations accordingly. This shows that they
should possess business intuition.
Strategic planning is the process of determining a company’s long-term
goals and then identifying the best approach for achieving those goals
Strategic planning is an organization’s process of defining its strategy or
direction and making decisions on allocating its resources to pursue this
strategy, including its capital and people.
Strategic planning is a process to determine or re-assess the vision, mission
and goals of an organization and then map out objective (measurable) ways
to accomplish the identified goals
Defining Mission Statement:
The mission statement is a short, concise statement that describes what the
organization will strive to bring about — the reason why the company exists
in terms of its impact on the rest of the world
Defining Vision Statement:
One of the functions of strategic planning is to inspire people in the
organization to work towards the creation of a new state of affairs. The
vision is a means of describing this desired future, but it works best to
inspire and motivate if it’s vivid — in other words, a vision should be a
“picture” of the future. The visioning process is usually the very first step in
the strategic planning process.
Defining Role Statement:
The mission statement would focus on results and outcomes, while the role
statement gets more into the “how’s”.
A good way to think about this is to first state your mission, add a byline to
it, and then add a role.
For example, if the Mission of a startup organisation is to “go where no man
has gone before” there might be a set of role statements (usually there will
be more than one). For example – To go where no man has gone before by
building new technologies and starships that can…
Environmental Scan:
In terms of organizations and strategic planning, an environmental scan
involves considering the factors that will influence the direction and goals of
an organization. And, it includes consideration of both present and future
factors that might affect the organization, since; we’re planning for the
future, not just the present.
For example, an environmental scan might project that in the next ten years,
the number of people (potential customers) between the ages of 18-24 will
increase from 30% to 40%. That’s important information if we want to decide
what kind of new products we might consider introducing into the
marketplace.
Competitive Analysis:
A competitive analysis involves looking at those that compete in the market
place, and using information about the competitors to identify where
organisational strengths are relative to those competitors. One of the
principles for becoming competitive is to leverage one’s strengths with
respect to competitors, and minimise the weaknesses.
Features of Strategic Planning
The following are the salient features of strategic planning:
1. Process of Questioning:
It answers questions like where we are and where we want to go, what we
are and what we should be
2. Time Horizon:
It aims at long-term planning, keeping in view the present and future
environmental opportunities. It helps organisations analyse their strengths
and weaknesses and adapt to the environment. Managers should be
farsighted to make strategic planning meaningful.
3. Pervasive Process
It is done for all organisations, at all levels; nevertheless, it involves top
executives more than middle or lower-level managers since top executives
envision the future better than others.
4. Focus of Attention:
It focuses organisation’s strengths and resources on important and high-
priority activities rather than routine and day-to-day activities. It reallocates
resources from non-priority to priority sectors
5. Continuous Process:
Strategic planning is a continuous process that enables organisations to
adapt to the ever-changing, dynamic environment.
6. Co-Ordination:
It coordinates organisations internal environment with the external
environment, financial resources with non- financial resources and short-
term plans with long- term plans
Difference between Corporate &
Strategic Planning
Time Factor:
• Corporate Planning usually comprises of short time periods.
• Strategic planning comparatively comprises of long time periods.
• Scope:
• Corporate planning deals with the internal aspects of the company.
• Strategic planning deals with the overall business (i.e. internal and external) and external
environments.
• Objectives:
• Corporate planning sets parameters and objectives within the company.
• Strategic planning sets the overall direction of the company.
Response Nature:
• Corporate planning responds to the market segments which the company
deals with.
• Strategic planning selects which market segments to deal with.
• Interconnection:
• Corporate plans facilitate or help to achieve strategic plans, and corporate
plans are set according to the motives of the strategic plan
10 BEST Decision Making Tools for Business (2022 Update)

The decision- making tools help you to map out all the possible alternatives to your decision, it’s cost, as
well as chances of success or failure. These applications provide a useful way to make the right choice by
simplifying the decision-making process and by drawing a diagram.
) SWOT Diagram
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT Diagram is an
important management application that helps any organization to assess its current situation. It
works as a basic guide for strategic planning.
Tool to create SWOT Diagram: Creately

Creately is an easy way to create SWOT diagrams online. It is one of the best tools in decision
making that contains 100s of readymade SWOT analysis templates. It has a user-friendly
interface that enables you to customize your diagrams. You can use this tool to collaborate
around your organization strategies in real-time.
2) Decision Making Diagram
Decision making diagrams are graphs that enable you to map out the decision you have taken. It
is one of the best decision making methods that helps you to estimate eventual actions based
on the outcomes and risks. You can use this diagram for planning team strategy.
Tool to create Decision Making Diagram: Lucid chart

Lucidchart is a tool that helps you to build decision tree diagrams. This software can be used to
collaborate with your teammates in realtime. It enables you to visualize potential paths and
examine outcomes. Lucidchart can simplify decision making process using technical diagrams.
3) Strategy Map
Strategy map is a diagram that can be used to document strategic business goals. This map is
created during the planning process of business. It is used as a primary material to check-in and
review meetings.
Tool to create Strategy: Cascade Strategy

Cascade Strategy is a decision making tool that provides a drag and drop interface to build
strategy Map. This tool supports a wide range of frameworks. It is one of the best tools for
business decision making which allows you to export map to the PDF file format.
4) Decision Matrix
A decision matrix is a technique that contains values that helps you to identify and analyze the
performance of the system. The elements of a decision matrix show results depend on specific
criteria.
Tool to create Decision Matrix: Mindtools

Mindtools convert your data into row and column. It represents table row as your decision and
factor as a column. It is one of the best decision analysis tools which enables you to score each
option from 0 (indicate poor) to 5 (indicate very good).
5) Pareto Analysis
Pareto Analysis is a method for decision-making. It is also known as 80/20 rule meaning, 20% of
your activities will account for 80% of your results. It is used for prioritizing possible changes by
identifying the problems and resolve them.
Tool to create Pareto Analysis: Visual Paradigm

Visual Paradigm helps you to add or input data to your pareto chart easily. It is one of the best
tools of decision making that enables you to change chart’s fonts and colors without any hassle.
This tool automatically generates a chart based on the data available in the Google Sheet. Visual
Paradigm allows you to resize the chart to any dimension.
6) Cause and Effect or Ishikawa Diagram
Cause and Effect or Ishikawa Diagram shows the causes of a particular event. It can be used for
product design and to check its quality to identify possible factors causing an overall effect. You
can group causes into categories to find sources of variation.
Tool to create Cause and Effect or Ishikawa Diagram: SmartDraw

SmartDraw is a simple tool that enables you to draw Ishikawa diagrams online or on your
desktop PC. It provides support for Mac and Windows operating systems. Causes and effect
diagrams are integrated automatically, and you can move or delete them quickly. SmartDraw
offers numerous templates to draw Ishikawa diagrams
7) Force Field Analysis
Force Field Analysis enables you to examine your project. It provides a framework for looking at
the factors that influence a particular situation. This analysis helps you to understand the
process of any organization in a better way.
Tool to create Force Field Analysis: SmartDraw

SmartDraw is a decision making tool that provides templates to perform force field analysis. You
can use this graphical tool for making decision. This drawing tool automatically adjusts items on
the drawing area. It is one of the best analytical tools for decision making which helps you to
import or export a force field analysis diagram from Visio.
8) Break-even analysis
A break-even analysis helps you to determine at what stage a new business product will be
profitable. It’s an economic calculation used to determine the number of products or services
you need to sell to cover your costs.
Tool to create break-even analysis: Good Calculators

Good Calculators provides a calculator that enables you to make better business decisions and
calculate the break-even point. You can utilize this tool by just entering fixed and variable costs,
selling price per unit, etc. It enables you to calculate it with just a single mouse click.
Pugh Matrix
Pugh Matrix is a diagram that is used to evaluate alternative solutions for business. It helps you
to determine which solutions are more valuable than the others. This method does not require a
massive amount of quantitative data.
Tool to create Pugh Matrix: Psychologia

Psychologia is a tool that provides a score for every option you have entered. This app enables
you to find the highest score. It helps individuals to find the importance of specific criteria over
others
10) Ratio Analysis

Ratio analysis is a term used for comparison of items available in the financial statements of a business. It
used to evaluate a number of problems with an entity, like its liquidity, efficiency of operation, and more.
Tool to create Ratio Analysis: Finstanon
Decision making process
Decision making is a daily activity for any human being. There is no exception about that. When it comes to
business organizations, decision making is a habit and a process as well.
Effective and successful decisions make profit to the company and unsuccessful ones make losses.
Therefore, corporate decision making process is the most critical process in any organization.
In the decision making process, we choose one course of action from a few possible alternatives. In the
process of decision making, we may use many tools, techniques and perceptions.
In addition, we may make our own private decisions or may prefer a collective decision.
Usually, decision making is hard. Majority of corporate decisions involve some level of dissatisfaction or
conflict with another party.
Steps of Decision Making Process
 Step 1: Identification of the purpose of the decision
In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when it comes to
identifying the purpose of the decision.
∙ What exactly is the problem?
∙ Why the problem should be solved?
∙ Who are the affected parties of the problem?
∙ Does the problem have a deadline or a specific time-line?
Step 2: Information gathering
A problem of an organization will have many stakeholders. In addition, there can be dozens of factors involved and
affected by the problem.

In the process of solving the problem, you will have to gather as much as information related to the factors and
stakeholders involved in the problem. For the process of information gathering, tools such as 'Check Sheets' can be
effectively used
Step 3: Principles for judging the alternatives
In this step, the baseline criteria for judging the alternatives should be set up. When it comes to defining the
criteria, organizational goals as well as the corporate culture should be taken into consideration.
As an example, profit is one of the main concerns in every decision making process. Companies usually do not
make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles should be
identified related to the problem in hand.
Step 4: Brainstorm and analyse the different choices
For this step, brainstorming to list down all the ideas is the best option. Before the idea generation step, it is
vital to understand the causes of the problem and prioritization of causes.
For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect diagram
helps you to identify all possible causes of the problem and Pareto chart helps you to prioritize and identify the
causes with highest effect.
Then, you can move on generating all possible solutions (alternatives) for the problem in hand.
Step 5: Evaluation of alternatives
Use your judgement principles and decision-making criteria to evaluate each alternative. In this step, experience
and effectiveness of the judgement principles come into play. You need to compare each alternative for their
positives and negatives.
Step 6: Select the best alternative
Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of the best alternative is an
informed decision since you have already followed a methodology to derive and select the best alternative.
Step 7: Execute the decision
Convert your decision into a plan or a sequence of activities. Execute your plan by yourself or with the help of
subordinates.
Step 8: Evaluate the results
Evaluate the outcome of your decision. See whether there is anything you should learn and then correct in future
decision making. This is one of the best practices that will improve your decision-making skills.
Organisation Decision Making
THANK YOU !!