Planning and Budgeting Concepts CMA Part 1 The macroenvironment also includes social factors such as environmental issues and government, legal, international and technological factors that affect the industry and the company. A couple of the many possible examples are: • The extent to which environmental protection laws are enforced by the Environmental Protection Agency or new ones passed by Congress depends to a great degree upon the position of the administration in charge at any given time, since the President of the United States appoints the head of the EPA. • Current or future anticipated tax credits can affect an entire industry by creating demand. A present example is tax credits for installation of solar electricity-generating panels. Companies affected will include firms that manufacture the materials used by solar panel manufacturers, the manufacturers of the solar panels, and the companies that install them. Setting Objectives and Goals One of the most basic and important outcomes of the planning process is the development of the companys objectives and goals. The identification of the companys objectives is the first step in the planning process. Even if the plan relates to a small business project, all of the project participants must be aware of and understand what is supposed to be accomplished by this project - the goal of the project - before it can be developed. Unfortunately, a company may have a number of different objectives, and in a worst-case scenario, some of these may be contradictory to each other. It is up to management to prioritize the companys objectives and then communicate these priorities to the people within the organization. Without the communication of the plan and its objectives, planning is a useless process for the company. The objectives that are developed must be clearly stated in specific terms. This prevents interpretation of the objectives by employees. Additionally, objectives must be communicated to all individuals that they will impact. A formal way of communicating the organizations objectives is through its mission statement. In many companies the mission statement is very prominently displayed and constitutes a large part of the corporate culture. In any case, the goals and objectives of the company, department or project need to be communicated to the people impacted by them. Finally, for any objective to be effective, individuals within the organization must accept the objectives. Though it is not possible for everyone In the organization to agree with every objective, it is essential that the objectives are clearly understood and communicated, allowing people to address whatever concerns they have about the goals. However, after this is done, all of the employees need to work toward the goals of the company. A goal is similar to an objective, but different in that goals are developed and implemented at the unit or department level while objectives are at the organizational, or enterprise, level. In a sense it is through the accomplishment of the goals of the division that the objectives of the organization are met. Planning is the process that enables a company to achieve its goals and objectives. As stated before, a company may have many objectives throughout the organization. It is the responsibility of management to make sure that all of the smaller goals and objectives work toward the ultimate achievement of the companys main objectives. Management must make certain that this harmonization of goals is done as efficiently and effectively as possible. Note: Because people in each department are most closely connected with the goals of their own department, there is the risk that the employees will develop tunnel vision. Tunnel vision occurs when employees become so concerned with their own goals, they fail to notice or care about the larger objectives of the company. If in doing your job you prevent others from doing their jobs, the company not only does not benefit, but it can actually be hurt.
Posted on: Mon, 17 Mar 2014 12:15:59 +0000
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