Corporate (Group) Plan
Structured Review / Walkthrough
The purpose of the corporate plan review is to ensure that there is a
clear corporate vision with the necessary plans in place to: promote a
complementary corporate culture; obtain the optimal mix of businesses; and
optimally coordinate the activities of the business units in order to maximize
shareholder values. "Shareholder values" is plural to reflect that
although maximizing shareholder value (read, "maximizing discounted cash
flow") is the #1 theoretically correct financial goal, the owners and
directors of the company are free to choose other corporate objectives as well.)
In theory, it would be ideal for corporate management to clearly articulate
the corporate vision and corporate direction with such clarity that the business
units would then be able to articulate their strategies within the grand
corporate design. In practice, corporate management often wants the businesses
to 'go first.' In either case, the process is an iterative one. Both
corporate planning and business unit planning should be ongoing; and neither
should use the other's lack of explicit plans as an excuse not to plan
themselves.
With a clear understanding of the current businesses, the corporate plan
should focus on future mergers, acquisitions, joint ventures and divestitures.
The corporate plan should also focus on deciding which businesses should
be grouped together, if any; which activities should be partially or
totally centralized, if any; and what policies and procedures should cut
across the businesses to maximize corporate results.
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