CODMAN & SHERTLEFF INC.

Planning and Control System (Assignment)

Maurya Banda
18PGP095
Group - B
1. Provide a complete flow diagram for all annual planning and control processes described in the
case?

Below flow diagram represents the the annual planning process for 5- year and 10-year plan
followed by flow diagram for budget revisions and reviews.
Following flow diagram represents financial planning at Codman and Sherleff and J&J
2. What are the strength and weakness of J&J planning and control system?
J&J follows decentralized system of management. The planning and control system is also
aligned to decentralized style of management at J&J. Following are the strengths of J&J’s
planning and control system

 The planning and control system was more used to stretch the imagination of the
managers and make them think expansively rather than just targets
 There is no penalties for in-accuracies. This makes the planning process more fair
to all the businesses as each business is faced with different level of uncertainties
and riskiness
 The 5- and 10-year plans are revised every year accompanying with reasons for
changes in estimates, assumptions or forecasts. This makes the planning process
more dynamic
 This imposes a regular check on managers, to eliminate challenges and have
healthy conflicts
 The system is also open to new ideas and not dismissive of any proposals. If a
person feels that his forecast or proposal is not good enough only that person
decides whether a revision is necessary
 Longer plans helps in effectiveness of the system and helps in change
identification
 It also promotes innovative culture

Following are the weaknesses of planning and control system at J&J

 Diversity and complexity of the process can lead to ineffective controlling

 Lack of standardized procedures
 Less flexibility to subsidiaries to implement. Everything requires approval and
everything to be aligned according to the requirements of the executive
committee
 Inter-business coordination – The system might fail to ensure that each strategy
of the operating subsidiaries doesn’t jeopardize others, creating undesirable
competition between subsidiaries
 Inclusion of plethora of performance variables leads to lost focus on the
ultimate goal at the subsidiary level
 The planning process is too lengthy, the decentralized system makes the
process time-consuming