CHAPTER 06

BUSINESS AND ITS

ENVORNMENT
(6.2.2) CORPORATE PLANNING AND
IMPLEMENTATION
Corporate Planning
• A corporate plan sets out where the
business wants to go and how it intends
to get there

• The plan shows the detail of what needs

to be done to get where the business
wants to be.
CORPORATE
CULTURE

+ The values, attitudes, and beliefs of a

business’ employees that control the way
they interact with each other and with
external stakeholder groups

+ Hofstede 1991– ‘collective programming of

the mind’
+ Ouchi 1981 – ‘the way we do things around
here’
In the same way that people can differ and their
attitudes can vary enormously, so the culture of
businesses can be tremendously different. For
example, organisations may be:

+ Entrepreneurial – ‘think out of the box’ –

Google
+ Bureaucratic – follow rules and regulations
+ Customer-focused – ‘customer is king’
+ Conservative (or not!) – safe decisions are
taken, and businesses avoid risks
+ Short term, Long Term – Businesses that are
focused on the short term are reluctant to
invest in product development or training.
 Types of Cultures (Charles Handy 1993)
POWER CULTURE
- Concentrating power among just a few
people
- Autocratic leadership; power radiates from
the center
- Decisions are made swiftly
TASK CULTURE
- Based on cooperation and teamwork.
- Teams are empowered to take decisions.
- Power is vested in
expertise in teammates.
ROLE CULTURE
- Each member of staff has a clearly defined
job title and role
- Authority is clearly delegated
- Power is radiated from a person's position
within the organization.
PERSON CULTURE
- When individuals are given the freedom to
express themselves fully and make decisions
for themselves.
ENTREPRENEURIAL CULTURE
+ An Entrepreneurial Organizational Culture (EOC) is a system of shared
values, beliefs and norms of members of an organization, including
valuing creativity and tolerance of creative people, believing that
innovating and seizing market opportunities are appropriate behaviors to
deal with problems of survival and prosperity, environmental uncertainty,
and competitors’ threats, and expecting organizational members to
behave accordingly.

+ Elements of Entrepreneurial Culture

• People and enpowerment focused
• Value creation through innovation and change
• Attention to the basics
• Hands-on management
• Doing the right thing
• Freedom to grow and to fail
• Commitment and personal responsibility
• Emphasis on the future
The importance of corporate culture
TRANSFORMATIONAL LEADERSHIP
+ Transformational leadership exists when
leaders identify what changes are needed,
create a vision and inspire employees to carry
through changes.
+ This was described by James Burns in his book
‘Leadership’ and later developed by Bernard
Bass.
+ Bass identified four elements that make up a
transformational leader, known as the ‘four Is’
ELEMENTS THAT MAKE
UP A
TRANSFORMATIONAL
LEADER (4 Is)
 Change can be either internal or external
in a business and it is key for managers to
adopt to changes.

Leading and
Managing
Strategic
Change
However, in some instances, managers can
be resistant to change:
Lack of effort to Demand for
Refusal to use new
learn the necessary Demand for more extended discussion
systems and
new skills/ lack of pay to slowdown the
applications
corporation process of change
 The figure highlights the different states that
employees might be in when managers
introduce change
 Theory put forward by ZEIRA & AVENDISIAN
 The openness and readiness for change will
depend on how dissatisfied employees are
with the current situation and the extent to
which they think they will suffer due to the
change.
 The less dissatisfied and the less they think
they will personally suffer as a result of it,
the more open they will be to change.
 Change may also not happen as the business
may lack resources such as money, skills and
time
 According to Mintzberg managers cannot
implement all the changes they want
 Managers may also not recognize the need
for change, they may not appreciate the
changes in the market which the businesses
belongs to, hence will adopt a rather reactive
approach as opposed a proactive approach
to decision making.
 Understand Recognise the
what change major causes of
means change

Techniques to
implement and Understand the
stages of the
Lead change,
not just
manage change change process manage it

successfully
Assign project
Assign a project
groups or
champion/lead
teams
Promoting change
•Process of promoting change:
• Establish a sense of urgency
• Create an effective project team to
lead the change
• Develop a vision and strategy for
change
• Communicate the changed vision
• Empower people to take actions
• Generate short term gains which
benefit many people
• Consolidate these gains to
produce more change
• Build change into the culture
Resistance to change
•Reasons why managers and employees may
resent and resist change:
• Fear of the unknown
• Fear of failure
• Losing something of value
• False beliefs about the need for change
• Lack of trust
• Inertia
 A contingency plan involves preparing an
organization's resources for unlikely events.

Contingency It involves identifying how to minimise the

potential impact of a disaster and prevent it from
Planning happening in the first place

Steps in contingency planning:

Identify the potential disasters
that could affect the business
Minimise the potential impact of
risks
Assess the likelihood of these Plan for continued operations of
• Involves protecting the company’s
occurring the business
assets, reputation and public goodwill
Benefits and Drawbacks of contingency
planning