Concepts of Corporate Planning

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Corporate planning is a continuous process in which a company first defines its philosophy, mission and vision in a strategic plan, and then uses that plan to direct, monitor and manage the business. Strategic planning, detailed operational planning and performance monitoring are the three components of corporate planning.

Significance

Studies prove that companies who do corporate planning perform significantly better than competitors who do not use corporate planning. An annual survey by management consultants Bain and Company continually confirms that executives get more value out of strategic planning than any other management tool.

Time Frame

Strategic plans define the long-term vision and once created, plans are typically reviewed every five to ten years. Business departments do detailed planning annually, and operations groups monitor the results throughout the year.

Benefits

Corporate planning gives companies consistent guidelines for making decisions. When there is a crisis, opportunity or gradual evolution of business circumstances, planning helps a company maintain its strategy.

Considerations

Many companies rely on consultants to facilitate planning.

Expert Insight

It's difficult to assess whether the value of corporate planning offsets the cost. The best measure is to study the performance of companies in relevant industries that have adopted planning.

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