![]() (v) External environment is subject to perception values i.e. This feature of external environment is a serious challenge to management requiring it to remain highly cautious, alert and adaptable. (iv) External environment is highly volatile and turbulent in which there are lots of sudden changes, which may even become quite dangerous. As such, to analyses external environmental factors in a threadbare and precise manner is, in itself, a very complex job. For example, there is considerable overlapping among political and legal factors social and economic factors and so on. It is very complex and various factors comprised in it may be highly interrelated and interdependent. Only a few ‘hero industrial giants’ may have an influence over external environment but only in a limited way. It, so to say, has an upper hand over management. (ii) By and large, external environment is beyond the control of management: The need, therefore, is to analyses and considers only relevant factors with appropriate dimensions, obtaining in external environmental scenario. (II) External Environmental Analysis:Īll the environment which obtains and prevails outside the business enterprise may be termed as the external environment of business.īefore we undertake a brief account of various external environmental factors it would be in the fitness of things, to first identify the salient features of external environment as stated below: (viii) Human relations environment, consisting of:īy and large, management has control over elements of internal environment, except human relations aspect. Financial discipline enforced in organisation. Capital budgeting – techniques and proceduresģ. (vii) Financial environment, consisting of:Ģ. Systems of training, promotion and compensation of workmen (vi) Personnel environment, consisting of:Ģ. Advertising and other sales promotion techniques Marketing research system and proceduresģ. For implementation purposes, necessary communications are made to the operating staffing who are also provided with necessary facilities to implement the tactical plans. As such, tactical plans are put into a process of implementation, just at the right time, as decided by management. Mere paper planning is no planning unless and until it is put into practice. For example, if the strategy of a company is to develop the skills and talents of manpower for realizing objectives then designing of suitable training programmes would amount to making tactical plans.Ĭorporate planning and strategy formulation have a long-term perspective while tactical plans have a short-term perspective, as the latter are to be implemented immediately, in the usual course of organisational life. Tactical plans are necessary for implementation of strategies leading to the attainment of corporate planning objectives. Strategies are translated into action plans called tactical plans or operational plans. Strategy formulation is also done in the light of environmental analysis and diagnosis. There is no doubt about it that success of strategies is the success of corporate planning and vice-versa. Strategies facilitate the attainment of objectives. It is easier to set objectives it is difficult to realize them. Strategy is, in fact, the weapon of the planner devised for attaining objectives of corporate planning. Strategy formulation is the core aspect of corporate planning. In order to make corporate planning a realistic approach to attaining objectives objective setting for corporate planning is done in the light of environmental analysis and diagnosis. In corporate planning, after environmental analysis and diagnosis, the planners determine objectives for the company as a whole and for each department of it which become the beginning point of corporate planning.Īll objectives of corporate planning must represent an integrated or coordinated system of objectives. (ii) Determination of Objectives :Īll planning starts with a determination of the objectives for the plan and corporate planning is no exception to this generality. (A detailed account of this step is attempted subsequently, in the discussion about corporate planning). The first steps (which is, in fact, the background step), involved in corporate planning is environmental analysis and diagnosis.
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