Designing the New Strategic, Operational, and Financial Planning Process MGTD54H3 Companies today must constantly adapt to the global economy if they want to remain competitive. Strategies that worked in the past may have to be revised constantly to adjust to the new visions and goals of the ever changing company. For Becton Dickinson, their business is constantly evolving, and hence the strategic, operational, and financial (SOF) process must also change over time. Of course, the SOF process should not be altered fully, but only the disadvantages and drawbacks should be left behind. Before designing the new SOF process, we must first analyze the processes in the past. Pros and Cons of the 1993 SOF Process Analyzing the strengths and weaknesses of the SOF process will provide an idea of which elements to retain and discard for the new SOF process. Pros Cons
- Structure format of the SOF process is very comprehensive and detailed. - On-going negotiations between divisional and sector head. This provides an opportunity for each division to justify their case for the budget that is required. - Helps to better forecast the - Worldwide teams report less detailed financial data making it more difficult to forecast future financials - SOF books prepared by business units that include data from various geographic areas. They might not be familiar with the particular region and make for an inaccurate assessment - Feedback from initial proposal is very informal from sector heads
financials and the budget for the year - Helps with planning as it forces divisions to plan ahead (proactive) instead of being reactive to the market. - There is a series of reviews and detailed planning to come up with good projections - Gave divisions a clear cut goal to work towards with a detailed budget - Negotiations get very heated, but professionalism should be maintained at all times - About 2/3 of the operating units miss their budgeted financial goals. This shows that there is a lack of communication between divisional and head presidents. - The process is long and time consuming - The final budgets are approved in September but strategies were approved 7 months earlier, yet strategies were not readjusted for the decrease amount of resources - Incentives should be weighted more equally - Financial portion of the SOF is focused more so than the strategy formulation The pros of the 1993 SOF process should definitely be kept while we should minimize the cons in the new SOF process. The 1993 SOF Process versus the 1996 SOF Process
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- Fall '13
- Management, SOF, finance staff, WW division