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COPLEY MANUFACTURING COMPANY
Strategic Planning
Rohit Chandnani 15
Nikhil Chandra 16
Samadhan Damdhar 20
Joanne D’Souza 26
Umakant 27
Vineet Dubey 28
Analysed By:
Manufacturer of cutting tools and other industrial parts
Established in 1919
Rapid progress in 1960 and 1970
8 Divisions with considerable autonomy
Initiated formal planning in 1977
Introduction
Timeline of Events
KEY EVENT KEY IMPACT/EFFECT
TimePeriod
Timeline: 1977 to 1980
Russel Wilde initiates Formal Planning
Growth through M&AObjectives &
Potential
1977
Stanley Burton asks for 10 yr financial
forecast (ROI , Sales, Profit, Cash Flow)
Analysis useful as indicated large cash
flows, Mature markets & cyclical
sensitivity.
Mid1977
Director of Corporate Development-Charles
Sagan, reports to Burton
Structural change. Sagan concerned with
Growth through M&A.
Late1978
Sagan begins reporting to Albert. Chairman, Samuel
Savage, asks for 5 yr sales forecast.
Structural change. Sagan & Albert agree Planning as way of life. Unnecessary
forecast.
Late1980
No defined corporate goals
Unnecessary voluminous data asked for
Inconsistent leadership
Planning Range 10 years: period too long
Review
Timeline: Early 1981
Corporate Planning Committee with Sagan as Chief Coordinator.
Weekly meetings to define “Process of
Formal Planning” & “Corporate Goals”
Guide move towards formal
planning.Well represented
committee, insights of technology, economic trends and finance.
Critical issues tackled. Memo from Albert to
division heads stating plan of action.
Survey divisional history & attitude to
aid in preparing “Provisional Plans”
Clear communication to
various divisions explaining need &
future course of action
Feb1981
Mar1981
Timeline: 1981contd.
Visit to divisions to introduce concept of formal planning by
Albert & Sagan.Divisions to submit 5-yr plans by Oct 1981.
Consistent Effort to introduce concept. Divisions to decide
role of staff in process & format of 5 yr- No clear directions.
November - Planning Review Meetings to
evaluate plans.December – Planning Response Meetings to comment on plans. Mixed Responses.
Lack of Uniformity,Lack of Consistency in attendance, Lack of representation
from other divisions. Unable to effectively
mould attitudes.
Mid1981
Late1981
Corporate Goals still not developed
Formal Planning Structure beginning to form
Timely communication
Lack of uniformity
Unable to create a consensus
Review
Timeline: 1982
Corporate Planning moved up, Creation of
new staff functions, Creation of additional divisions, designations
Organizational Changes that
impacted planning process- “were
temporarily disruptive”.
Numbers Orientation to Strategic Concepts.
3 Phase Planning Cycle
Strategy Development,
Quantitative, Action.
Further Changes in process,
Clear Communication
about planning cycle & objectives of
process.Completion of Phase 1.
Business Downturn Staff depts to
continue planning process
Reduced efforts. Discontinuation of
Cycle.
Early1982
March1982
July1982
Corporate Goals still not defined
Lack of commitment towards plans
Uncoordinated structural changes
Irrelevant to have planning process in staff departments before line departments
Review
Timeline: 1983
Committee Inactive-efforts to formulate
“Corporate Goals”.Sagan working with
Albert, while planning influenced by Tyler.
Revised formats for Product Group
strategy and review meetings.
Further changes in leadership & structure of
planning activities.No Goals defined.
1983
Pre Meeting to explain strategy & review Product Line
Study.Presentation of divisional plan.
New format to ensure congruence in planning. But
strategy revealed for the first time in pre
meeting
1983
Timeline: 1983
Sagan working with Albert, while planning influenced by Tyler.
Revised formats for Product Group
strategy and review meetings.
Further changes in leadership & structure of planning activities.Efforts to formulate “Corporate Goals”.
Early1983
Pre Meeting to explain strategy & review Product Line Study, followed by
divisional plan presentation.
New format to ensure congruence in planning. But
strategy revealed for the first time in pre
meeting
Late1983
2-day conference to review divisional
plans.
Goals formulated.FINALLY!!!
Dec1983
Corporate Strategy communicated just before presentation of divisional plans
No goal congruence created
Positive Indicators: More precise data Structured format More emphasis on analysis & discussion Gradual shift to emphasis on Line Management
Review
7 Number of Years where Goals were Undefined
4 Number of Plans
4 Number of Changes in Structure
3 Number of Revisions in Planning Process
History in Numbers
Appraising the Formal Planning
Efforts
Undefined Corporate Goals
Redundant & Ineffective Data Collection
Problems in the Process
“… no answer had yet been given to the second question (what are the appropriate Corporate Goals for
Copley?)…”
“Divisional Plans were seen as optimistic extrapolations of past
operating trends.”
“…voluminous documentation required to present a divisional
strategy as one reason for failure to identify with the planning output.”
Inconsistencies in Processes
Lack of Commitment
Problems in the Process
“… division managers had been planning to largely satisfy the
requirements set by the planning staff & had failed to become
committed…”
“… it decided against proceeding with the quantitative phase originally
scheduled for the fall…”
Short Term vs. Long Term
Goal Congruence???
Data Orientation vs. Quantitative
Lack of Goal Congruence
Limited Focus on Line Functions
Problems in the Process
1982: Line Departments to focus on reviving business rather than formal
planning process
“… it decided against proceeding with plans but recommended that staff departments begin planning
process by analysing past trends & identifying resources”
Sagan vs. Tyler
Growth through Mergers & Acquisitions
Numerous Organisational Changes
Problems in the Process
Samuel K Savage (Chairman of the Board)
Stanley Burton (President)
Albert(Vice President)
Charles N Sagan(Director Corporate Development)
Tyler(Cutting Tool Division Head)
Organisational Change: 1980
Problems in the Process
Samuel K Savage (Chairman of the Board)
Stanley Burton (President)
Albert(Vice President)
Charles N Sagan(Director Corporate Development)
Tyler(Cutting Tool Division Head)
Samuel K Savage (Chairman of the Board)
Albert (President)
Tyler(Vice President)
Charles N Sagan(Director Corporate development)
Organization Structure 1982
Inclusion of seven persons into new corporate executive Positions proved out to be disruptive to planning effort
Two VP’s(Six Divisions)
Samuel K Savage (chair man of the Board)
Albert (President)
Tyler(Exec. Vice President)
Fred Fisher(Director Corporate development)
B (Division GM)
Organization Structure 1984
A (Division GM)
Other Issues: Unprepared for Business Fluctuations Frequent Changes Time Consuming Efforts Unnecessary Paperwork Unclear Leadership Problems due to organisational changes:
Assimilating acquired company Organising split of Cutting Tools Division
Problems in the Process
LONG-TERM VISION????
Formulated organisational goals
Reduced & precise data collection
Encouraged discussion for evaluation of plans
Use of strategic analytical tools eg: SWOT
Increased involvement of line departments
What They Did Right
Management
Control
Human Resource
Management
Organization
Structure
Culture
Evaluation: Post 1984
Strategy Performance
Formulated corporate goals & strategies based
on divisional plans
Developed a schedule for
communicating & evaluating plans
Organisational Structure put in
place firmly
If processes are followed, organisation structure is maintained
and MCS enforced – Strategic Planning can
be a success.
Recommendations
GoalStrategyPolicies
Implementation of Policies
Efficient and Effective Performance of Individual Task
Recommended Process
STRATEGY FORMULATIO
N
MANAGEMENT CONTROL
TASK CONTROL
Process of MCSCorporate
Goals
Strategic Planning
Budgeting
Controllability
Performance Measurement
SatisfactoryReward
Strategic Formulation
If Dissatisfactory
Process of MCSCorporate
Goals
Strategic Planning
Budgeting Performance Measurement
SatisfactoryReward
Strategic Formulation
If Dissatisfactory
Divisional Goals
Should be developed by Top Management along with Divisional Heads
Written Descriptions of Organisational Goals & Strategies
Systematic & Process Oriented
Less Paperwork, More Discussion & Analysis
Developing Alternatives rather than Making Projections
Strategic Planning
Involvement of Line Functions in Planning
Staff Functions as Catalysts & Advisors
Commitment of Top Management
Clear Leadership & Organisational Heirarchy
Strategic Planning
Thank You!