These are time, entity, organization, elements and characteristics.
The plan may either be long-range or short-range, but the execution of the plan is, year after year. The plan is made on a rolling basis where every year it is extended by one year, keeping the plan period as the next five years. The rolling plan provides an opportunity to correct or revise the plan in the light of any new information the planner may receive. Duration of plan is expressed in units of time, a year.
The plan entity is the thing on which the plan is focused. The entity could be the production in terms of quantity or it could be a new product. It could be about the finance, the marketing, the capacity, the manpower or the research and development. The goals, and the objectives would be stated in terms of these entities. A corporate plan may have several entities. Entity, such as Growth, Product, Sales, is a subject for which corporate plan is made.
The corporate plan would deal with the company as a whole, but it has to be taken down for its subsidiaries, if any, such as the functional groups, the divisions, the product groups and the projects. The breaking of the corporate business plan into smaller organizational units helps to fix the responsibility for execution. The corporate plan, therefore, would be a master plan and it would comprise several subsidiary plans.
The plan is made out of several elements. The plan begins with the mission and goal which the organization would like to achieve. It may provide a vision statement for all to understand as also the purpose, focus, and direction the organization would like to move towards. It would, at the outset, place certain policy statements emerging out of management’s business philosophy, culture and style of functioning, followed by policy statements. Next it would declare the strategies in various business functions, which would enable the organization to achieve the business objectives and targets. It would spell out a programme of execution of plan and achievements. It provides support on rules, procedures and methods of plan implementation, wherever necessary. One important element of the plan is a budget stipulated for achieving certain goals and business targets. The budgets are provided for sales, production, stocks, resources, expenses which are monitored against the time in execution period. The budgets and performance provide meaningful measure about success and failure of the plan designed to achieve certain goals.
There are no definite characteristics of a corporate plan. The choice of characteristics is a matter of convenience helping to communicate to everybody concerned in the organization and for an easy
understanding in execution. The features of a plan could be several and could have several parts. The plan is a confidential written document subject to change, and known to a limited few in the organization. It is described in the quantitative and qualitative terms. The long-term plan is normally flexible while the short-term one is generally not. The plan is based on the rational assumptions about the future and gives weightage to the past achievements, and corporate strength and weaknesses. The typical characteristics of a corporate plan are the goals, the resources, the important milestones, the investment details and a variety of schedules.