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San Mig Corp

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Transcript of SAN MIGUEL case study

In the early 1980s the San Miguel Corporation (SMC) and A. Soriano Corporation (ANSCOR)Group of Companies, under the leadership of Andres Soriano, Jr. addressed a long felt need for an effective formal planning system for the two companies.

According to Soriano, the companies had developed their budgeting and long-ranged planning systems several years earlier but, despite the many advantages these gave them they still were not satisfied with their ability to respond to the rapid changes in the environment around them. Therefore, they search for a process that would enable them to upgrade their planning capability.

In November 1982, Dr. Lorange addressed a joint dinner-meeting of SMC and ANSCOR Group and shares his insights on the implementation of the strategic planning of the two companies. 1982. The time of Marcos regime. In which the control of the ownership has been turned political. Rapid changes to environment merely occurred. TIME FRAME The two companies experienced difficulty in their implementation phase and three problems occurred:

the planning process is much time consuming which involved more work than one might reasonably expect of people;

the two companies emphasized in developing the objectives and strategic programs led to past strategies outweighing the new strategies;

there were some Business Family and Element Teams who were asking for "hand-holding" to guide to the process. 1.Examine loopholes in the planning process.

2.Develop a strategy for an efficient planning process. 3.Study pros and cons of the involvement of past strategies in developing the objectives and strategic program. 4.Determine the effects of having no planning manual or “hand-holding”. 5.Decide on the need for developing a planning manual for the planning process. ALTERNATIVES COURSES OF ACTION 1. Constitute a more active team of managers in the planning process, develop new strategies based on the past, and provide planning manuals to all Business Family and Element Teams. 2. Formalize a decision team, formulate all-new strategies, and resist giving plan manuals.

3. No allocation of human resources or cross fertilization and independence in family and element team’s management decisions. Background Study 1.Constitute a more active team of managers in the planning process, develop new strategies based on the past, and provide planning manuals to all Business Family and Element Teams. ADVANTAGES: a.The capabilities and skills of the personnel will be evaluated.
b.The performance efficiency and effectiveness of the personnel will be determined
c.Plans are materialized and initiated at a small time frame
d.Loopholes within the organizational strategy, goals, and mission will be resolved DISADVANTAGES a.The provision of manuals to all managers is very costly
b.Inefficiency and ineffectiveness caused by the old strategies may be carried over to the new strategies
c.Conflict of perception between the managers and the bosses
d.Optimizing the capabilities and skills of the personnel may be time consuming 2. Formalize a decision team, formulate all-new strategies, and resist giving plan manuals. DISADVANTAGES: ADVANTAGES: a.New strategies may lead to enhanced performance
b.The formation of a decision team would lead to better decision making and plan implementation
c.Innovation of new ideas lead to greater employee motivation and participation
d.Loopholes within the organizational strategy, goals, and mission will be resolved a.The formulation of new strategies may lead to even more loopholes
b.Hand-holding will not be lessened without plan manuals
c.The reformation of the strategies may be time consuming and costly
d.The time frame in making a decision is lengthened
- Constitute a more active team of managers in the planning process, develop new strategies based on the past, and provide planning manuals to all Business Family and Element Teams. Alternative 1 is the best alternative. It states that both organizations must constitute a more active team of managers in the planning process, develop new strategies based on the past, and provide planning manuals to all Business Family and Element Teams, tackled all of the objectives.

Alternative 1 brings out the most effective and efficient solution to the organizations’ setbacks. Furthermore, with the help of alternative 1, managers will be more active in the organizations and learn firsthand how the organizations operate. The more active managers are within the organization, the more aware they become of the inefficiencies and ineffective aspects of the operations. Also, the development of new strategies must include the development of a planning manual in order to maintain the efficient and effective performance of the organization and the prevention of “hand-holding” by the different family and element teams. Despite not having the luxury of time in making decisions, a more active team of managers would generate better decisions made through employee cohesion, collusion and synergy. Since the processes in an organization are cycles, knowing loopholes within the planning process would lead to more efficient planning and in time, the organization will reach the zenith of its operations.
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