Corporate planning and strategic planning are interrelated and share many elements; however, strategic planning involves the future direction of the company and corporate planning involves determining the foundations of the business. Strategic planning helps the business respond to the external environment with goals and objectives; it drives the company forward and attempts to give the business an edge over competitors. Corporate planning deals more internal issues such as organization, bureaucratic activity and job design. Strategy may be an integral part of corporate planning and corporate planning may incorporate strategic suggestions.
Corporations are designed around several elements that shape the nature and dimensions of the organizational plan. The first element is the product or service sold by the company. What the company sells determines the group of customers known as the market segment. The needs and personality of market segment members are part of what shapes the corporation. Some corporate planning revolves around technology such as the Internet, information databases and electronic communication. Businesses may plan to have varying degrees of reliance on electronic communication and use of the Internet as a method of message or product delivery. Finally, corporate planning designates the needed positions and the employees who fill those positions.
Strategic planning involves scanning the environment for business trends and consumer needs and applying that research to the corporation. Strategic plans often include the formulation of the business mission statement, machining a company's resources to the most lucrative projects and identifying which feasible objectives will produce the most desirable outcomes. Strategic managers must continually scan both the internal and the external environment, evaluate the situation and make adjustments designed put the business in the best possible position.
Both corporate and strategic planning involve researching the product's segment members and altering business practices to satisfy the needs of segment members. Companies rely on both types of planning when undergoing organizational change or corporate restructuring. Both types of planning involve input and decisions from a company's highest level of management, such as executives or CEOs.
Corporate planning focuses on internal needs while strategic planning emphasizes response to the external environment. Strategic plans may direct corporate planning because employees and other resources must shift when the company changes strategic direction. Corporate planning influences strategy through the selection of strategic managers and the allocation of resources. Corporate planning responds to market segments and strategic planning chooses which market segments to target.
- Free Management Library: All About Strategic Planning; Carter McNamara
- "Designing Organizations"; Jay R. Galbraith; 2002
- "Strategic Management, Eleventh Edition"; John A. Pearce, et al.; 2009
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