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San Miguel Corporation

In: Business and Management

Submitted By jsolismae26
Words 550
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I. BACKGROUND OF THE CASE

In the early 1980’s, 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. They, therefore, searched for a process that would enable them to upgrade their planning capability.

SMC and the ANSCOR Group, thus, sought professional advice from a team of experts on strategic planning. The team was headed by Dr. Peter Lorange, then professor at the Wharton School and consultant on strategic planning to the two companies.

Soriano expressed his great satisfaction with the approach to strategic planning developed by Dr. Peter Lorange and his team.

In November 1982, Dr.Lorange addressed a joint dinner-meeting of SMC and the ANSCOR Group and shared his insights on the implementation of strategic planning of the two companies. Following are excerpts from an article prepared by Lorange based on his address during the meeting as well on as the major issues raised during the lively open-forum discussion.

II. MAIN PROBLEM
Problems:
a. The planning process may have been time consuming and involved more work than one might reasonably expect of people.
b. The two companies emphasized in developing the objectives and strategic programs led to past strategies outweighing the new strategies.

c. There were some Business Family and Element Teams who were asking for "hand-holding" to guide to the process.

III. ANALYSIS
IV. ALTERNATIVE COURSES OF ACTIONS
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.
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.
DISADVANTAGES:
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.
3. No allocation of human resources or cross fertilization and independence in family and element team’s management decisions.

V. CONCLUSION

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