1. Managing Change Planning for Change Revitalising general Motors is like teaching an elephant to tap dance. You find the sensitive spot and start poking. H Ross Perot Changing the direction of a large company is like trying to turn an aircraft carrier. It takes a mile before anything happens. And if it was a wrong turn, getting back on course takes even longer. Al Ries BUSS4.8 Planning for Change

2. In this topic you will learn about: Purposes of corporate plans ◦ Including contingency plans Assessing internal and external influences on corporate plans Assessing the value of corporate plans BUSS4.8 Planning for Change

3. Corporate Plans BUSS4.8 Planning for Change Corporate Plan A detailed, medium to long term plan outlining the actions a business will take to achieve its corporate objectives Corporate Aims and Objectives Corporate Strategies Functional Objectives and Strategies Revision Opportunity: Draw a grid as shown opposite on to A3 paper. Write down everything you can remember from BUSS3 under each heading. Share your notes to fill in as much of the grid as possible. HR Finance Operations Mgt. Marketing

4. Purpose of Corporate Plans Clear sense of direction ◦ Directors and all staff if communicated effectively ◦ Encourages accountability Prior consideration to key strengths and weaknesses of the business Identifies and gives consideration to range of strategic options Encourages progress to be tracked Allows for progress to be reviewed BUSS4.8 Planning for Change Preparing a corporate plan Detailed corporate plan Monitoring of corporate plan Review Discuss the benefits of each stage

5. Influences on Corporate Plans Internal ◦ Resources  Financial  Workforce  Operational capacity ◦ Culture ◦ Leadership ◦ Mission statement ◦ Decision making process External ◦ Market conditions ◦ Economic environment ◦ Political and Legal environment ◦ Social environment ◦ Technological environment BUSS4.8 Planning for Change The whole of BUSS4 looks at the external environment and managing change all aspects of which will influence corporate plans

6. Value of Corporate Plans Value Shows strategic thinking and planning ◦ Shared with  Employees  Potential investors  Other stakeholders “Joined up” thinking and planning Common sense of direction Limitations ◦ Responsiveness to change ◦ Must be flexible ◦ Can not predict future ◦ Can limit spontaneity ◦ Can not avoid the unexpected! BUSS4.8 Planning for Change

7. Contingency Planning The very nature of this unit reflects that businesses have to be able to respond to change and change can be unpredictable What is contingency planning? The process by which organisations try to prepare for unexpected and potentially disastrous events What is crisis management? ◦ The manner in which an organisation responds to an unexpected and potentially disastrous event BUSS4.8 Planning for Change A CRISIS RARELY GOES AS PLANNED! What steps can a restaurant take to avoid a crisis? What are the costs to a business? Can a crisis be avoided? How important is it to limit any damage?

8. The process of developing a contingency plan Acceptance Catalogue Possibilities Crisis Plan Testing Review Preventative Measures What contingency plans exist in your school or college? How do you test and review these? Business Impact Analysis may form an important part of this (see next slide) BUSS4.8 Planning for Change

9. Business Impact Analysis Potential Threats ◦ What could go wrong? Probability ◦ How likely is it to happen? Estimated effect ◦ What will the cost to the business be?  Financial and reputation Speed ◦ How quickly will it impact on the business functions? ◦ How quickly can the business respond? Mission Critical Functions ◦ Will it stop the business performing its main function? BUSS4.8 Planning for Change

10. Contingency Plans Value Sense of security Limits damage Speeds up recovery process Informs staff training Preventative measures can be part of CSR Limitations Costly and time consuming ◦ Including opportunity cost Needs reviewing Lack of predictability BUSS4.8 Planning for Change Fifa has a contingency plan in case South Africa is not ready for the World Cup. Should there be a Contingency plan in case London is not ready for the 2012 Olympics?

11. Contingency Plan Cadbury’s testing out of date Cadbury’s withdraws products made in China Cadbury’s is fined In each case: Identify the cause of each event Identify the potential threat What actions could have been taken to prevent these events? Rank each event on a scale of 1 – 10 in terms of seriousness to the future success of Cadbury’s. Justify your answer BUSS4.8 Planning for Change

12. Activity – Food contamination scare It is important at times of a crisis that communication is handled carefully and that everyone within the organisation understand their own roles and responsibilities. You work for a large food manufacturer who as part of the contingency planning process has identified the potential of contaminated food leaving the factory as a major threat. In teams decide on the major roles and responsibilities of each of the company’s functional areas if this potential threat was to happen: ◦ Marketing ◦ Finance ◦ Human Resources ◦ Operations Management Write a short press release explaining to the public what actions are being taken upon discovery of a case of food contamination BUSS4.8 Planning for Change

13. Essay US Entrepreneur, Warren Buffet, once said “Preparation is everything. Noah did not start building the ark when it was raining.” With reference to businesses you have studied, to what extent do you agree that planning and preparation are key to the success of business today. BUSS4.8 Planning for Change