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!