MANAGEMENT SKILLS - Corporate Development & Planning

Corporate Development & Planning

by Suchi Moorty, Demand Media

Elaborate planning is a prerequisite to achieving corporate success. To grow and sustain in the business environment, organizations must devise methodical and highly sophisticated plans for operations, production, projected growth path, investments, debts, strategies and more. Different types of plans are needed for different scenarios. Business plans can be done every week, month, quarter and year. The plans usually comprise start-up plans, growth plans, internal plans, feasibility plans and corporate plans.

Significance

Corporate planning and development integrates various functional departments within organizations. Finance, accounting, marketing, production, IT and human resources are integrated and interrelated. These relationships are expressed by statistical and mathematical models. Based on these, the organization prepares pro forma financial statements such as balance sheets and P&L (profit and loss) accounts.

Corporate planning is particularly significant and relevant for risk management and simulation. With a good corporate plan, the organization's decision-making is far superior and risks are minimized and nullified.

Features

Corporate planning involves the process of detailing meticulous and comprehensive plans in order to accomplish organizational objectives and goals with available resources. Senior management devises a formal approach to achieve the organization's vision and mission.

The management conducts internal and external environmental scans to take stock of all the existing prospects and opportunities and to recognize its shortcomings. The organization analyzes the SWOTs (Strengths, Weaknesses, Opportunities and Threats) and PEST (Political, Environmental, Social and Technology).

Benefits

Corporate planning involves overall planning for the organization. Analysts consider various alternate paths and the trade-offs of one strategy over another. Therefore, management meticulously chooses the best possible alternative keeping in mind its objectives and priorities. Efficient and effective corporate planning provides the bases for valuable decision making.

Time Frame

Corporate planning is primarily long-range planning for any organization. Once formulated the plans usually cover five years. Constant reviewing and monitoring is the key for them to last this long. This assessment must be conducted at the end of each year and adjustments made immediately.

Considerations

Business opportunities and environments continually change. The fashion and trends prevalent in the prior year might be outdated in the current year. Ongoing research is required and modifications to corporate plans are needed to give the organization a competitive advantage.

Many companies outsource the task of developing corporate plans. This can be a mistake given the knowledge that company management would have that the consultant lacks.