The systematization of corporate planning is a subject that provokes the research interest due to the increased importance of strategic and long-term planning for the corporate development. This article analyzes some problem areas related to the differences between the essence and the procedures of long-term and strategic company planning. The aim is to highlight some views of strategic and long-term planning in companies and the distinguishing features between these categories, draw the attention of contemporary managers to pursuing and combining different methods depending on the characteristics of the company’s activity and the environment in which it operates.corporate planning; management; strategic decisions; firm economic.

Lyudmila MIHAYLOVA

English

Research Papers in Economics

Review of International Comparative Management               Volume 12, Issue 1, March  2011  165 
 
 
Systematisation of Corporate Planning 
 
 
Lyudmila MIHAYLOVA  
University of Rousse “Angel Kanchev”, Rousse, Bulgaria 
E-mail: liudmilla@abv.bg  
Fax: +359 82 888726 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Keywords: corporate planning, management, strategic decisions, firm economic. 
 
JEL classification:   M21, L21.  
 
Introduction  
 
At the time of increasingly keen competition more and more managers are 
focusing their attention on long-term and strategic planning of the organizations they 
are in charge of. In the countries of Western Europe, Australia and the USA, this is 
one of the leading issues not only in big corporations, but also in the small and 
medium ones. 
Because  of  the  big  differences  in  the  size  of  the  environment  and  the 
enterprises  across  the  USA,  Western  Europe,  and  Bulgaria,  comparisons  of  the 
practices in long-term and strategic corporate planning are hard to draw. In Bulgaria 
there is an intensified interest in long-term planning as a part of the management of 
enterprises. Over the last four-five years this topic has been discussed at even a wider 
scale in both theoretical and practical aspects. It is interesting that enterprises such as 
M-tel, Globul, Praktiker, Vivatel, BTC, Overgas, Orgachim, Mall Varna, etc. already 
have established or are in the process of completion and operation of structures for 
long-term  planning.  These  structures  are  mainly  facilitating  the  development  of 
Abstract 
 
The  systematization  of  corporate  planning  is  a  subject  that  provokes  the 
research interest due to the increased importance of strategic and long-term planning 
for the corporate development. This article analyzes some problem areas related to the 
differences  between  the  essence  and  the  procedures  of  long-term  and  strategic 
company  planning.  The  aim  is  to  highlight  some  views  of  strategic  and  long-term 
planning in companies and the distinguishing features between these categories, draw 
the attention of contemporary managers to pursuing and combining different methods 
depending  on  the  characteristics  of  the  company’s  activity  and  the  environment  in 
which it operates.    Volume 12, Issue 1, March  2011                 Review of International Comparative Management  166  
organizations through the identification of potential risks, which can put in jeopardy 
the achievement of the planned goals.  
Long-term planning is related to the determining of future goals, which the 
organization is aiming to attain, and the most suitable ways for their achievement, 
with compliance between the opportunities available to the enterprise and current 
trends  in  the  development  of  the  sector.  All  activities  of  the  personnel  are 
coordinated  by  means  of  a  long-term  plan.  The  evaluation  of  the  role  and 
significance of long-term planning as a part of the management of the enterprise is 
quite interesting. 
Today  the  troublesome  aspects  of  long-term  and  strategic  corporate 
planning, which are related to corporate culture and human resources management at 
the  enterprise,  to  financial  management  and  marketing,  etc,  are  increasingly 
discussed. Similar contemporary studies on the issues of planning at enterprise level 
provide a reason for us to think that this is a topical issue and deserves the attention 
of the specialists in different management areas.  
 
1.  Concept of the significance and the time horizon of corporate 
planning 
 
The  finding  that  planning  is  a  major  function  of  management  is  an 
acknowledged fact by the theory and practice of management. It is the planning’s 
objective to adapt the organization to the changes in the external environment and 
to determine what should be done and by whom it should be done. Planning could 
be considered also an ability to see in the future of the enterprise and the results of 
its activity as well as the resources necessary for the achievement of the goals set. 
The  end  practical  goal  of  planning  is  a  system  of  solutions,  which  should  be 
adopted today for ensuring effective activity of the enterprise and its growth in the 
future, to be developed. 
In this respect planning is related to:  
  Making known the development perspectives, the risks and dangers, 
which the company has to overcome. 
  Choosing the way of development i.e. – determining the objectives and 
the strategy. 
  Evaluation,  preparation  and  implementation  of  the  necessary 
innovations and changes. 
  Coordinating of the activities and directing of the management of the 
separate  structures  and  sub-structures for  the  achievement  of the set 
goals. 
  Establishing of criteria for control and evaluation of the work of the 
structural bodies of the enterprise.  
  Improving  the  abilities  of  the  management  staff  for  the  adoption  of 
decisions under the conditions of insecurity and risk. 
  Straightforward allocation of resources, etc. Review of International Comparative Management               Volume 12, Issue 1, March  2011  167 
If we lend a broader perspective to planning, we will be able to see it not as 
an  single  act,  but  as  an  interrupted  process,  which  is  related  not  only  to  the 
elaboration  of  plans  but  also  to  their  concrete  implementation,  evaluation  and 
analysis of the achieved results, and, if necessary – to the making of corrections. 
Given  this  we  can  say  that  the  significance  of  planning  in  corporations  grows 
bigger therefore the interest of managers in the variety of plans and opportunities 
for their practical application increases. 
 
2.  Different types of plans 
 
Corporate  plans  could  be  divided  by  their  characteristics  into  the 
following: 
  According to their importance for the development of the organization 
– strategic, tactical, and operational. 
  According to the factor “time” – long-term, mid-term, and short-term. 
  According to the management level they are developed at – corporate, 
business, and operational solutions, or plans, respectively. 
  According to the object of management – economical, social. 
  According to the extent of determination – determined, undetermined 
etc. 
These characteristics, of course, do not exhaust the variety of all possible 
plans present. In the present article our attention is focused on plans of the first and 
the second groups of classification. 
According their significance for the development of the organization, plans 
are  strategic,  tactical,  and  operational  (Папазов,  2006).  The  strategic  ones  are 
related to the determining of key corporate goals and strategies for the achievement 
of the desired compliance between the opportunities of the organization and the 
environment. They provide the management staff with general guidelines for action 
in various situations, which could emerge in the course of the activity. Strategic 
plans  view  mostly  the  products,  the  technology,  according  to  which  they  are 
produced, and the markets of the company. Their role is to serve as a framework 
for drawing up the tactical and operational decisions at a later stage. 
Tactical and operational plans are related to issues such as investments, 
revenues, expenditures, and financial results. They differ from the strategic ones in 
terms of scope and character of the issues they are dealing with, the conditions 
under which they are elaborated, the frequency and periodicity of their occurrence, 
the period of time they are active for, etc. 
The practical dimension of strategic and tactical planning is related to the 
intention an amount of money to be invested in a field of operation new for the 
company as well as to the consideration of the course of activity of this operation. 
Once having planned to undertake a new market step, the management staff does 
not turn back and brings to fore all possible resources for the realization of this 
idea. That was the approach adopted for the planning of production of chips at the 
beginning of the eighties of last century, for example, for new technologies such as   Volume 12, Issue 1, March  2011                 Review of International Comparative Management  168  
digital TV sets, mobile engineering, and LCD equipment, for example, in the 90-
ies of last century (Agov, 2007). 
Strategic decisions and plans need to be reconsidered not only in terms of 
their meaning, but also in the context of the “time” factor. Very often between 
long-term and strategic decisions and plans a sign of equality is drawn, which is 
not considered the right approach. In some cases long-term decisions and plans, 
practically are not of high significance for the development of the organization. 
Or, on the contrary, decisions adopted as short-term ones, can turn out to 
be vital for the future prosperity of the company. For example, the biggest producer 
of mobile phones worldwide, the Finnish company Nokia, opened a plant near the 
Romanian city Cluj. The plant now has a personnel of 500 employees (workers and 
administrative staff), who at the end of 2009, when the plant will start using its full 
capacity, will amount to 3500 people. It will produce telephones and spare parts for 
the more insolvent parts of Europe, the Middle East, and Africa. The decision for 
the building of the plant in Cluj, which was officially opened in the third quarter of 
2008, was adopted within a very short period of time in April 2007 and the plant 
was  built  only  within  seven  months  (Articles,  2008).  With  regard  to  this  a 
difference between the strategic and long-term decisions, and strategic and long-
term plans, respectively, should be made. The most important difference between 
long-term and strategic planning is the interpretation of future – (the time element). 
Long-term  planning  suggests  that  future  could  be  forecasted  by  means  of 
extrapolation from the historically detected tendencies in development. On figure 1 
this  is  shown  via  the  wave-like  dotted  line,  which  continues  straightforward 
(Ansoff, 1999). 
The jagged line describes the typical procedure of setting goals for the 
needs  of  long-term  planning.  The  senior  management  of  the  company  usually 
stakes on better future results compared to those in the past and agrees with its 
employees on the attaining of higher indicators. A typical result of such a practice 
is the setting of optimistic goals not in line with the real results. In the companies 
where  management  is  good,  results  are  usually  higher  than  what  exploration 
suggests, although they look like (on figure 1) “teeth of a saw”.  
Within the companies with worse management, real results look like “teeth 
of a saw” too but they are below the outlined goals. 
When performing strategic company planning, unlike long-term planning, 
the assumption that the future would surely be better than the past is not present 
and the extrapolation method is not used. That is why as a first step, an analysis of 
the company’s perspectives is developed to make clear the tendencies, potential 
dangers, chances as well as the individual “emergency” risk situations, which can 
change the course of development. 
The  results  of  the  analysis  and  perspectives  are  shown  on  figure  2. 
Analysis  can  protect  the  company  from  forecasts  going  beyond  the  limits  of 
comprehensiveness of management as it is often the case when extrapolation is 
used. 
 Review of International Comparative Management               Volume 12, Issue 1, March  2011  169 
 
 
Figure 1 A gap between objectives and desired results in long-term planning 
 
 
Figure 2 A gap between objectives and desired results in strategic planning 
   Volume 12, Issue 1, March  2011                 Review of International Comparative Management  170  
As a second step an analysis of the positions of the competitive struggle is 
made. The task of this analysis is to determine how the results of the company’s 
work can be improved through improvement in competitiveness strategy applied to 
the  company’s  fields  of  operation.  Usually,  the  analysis  of  the  competitive 
positions shows that the company is aiming to optimize its activities developing the 
most perspective of all directions and removing the less perspective ones. Research 
in this direction always has continuation related to the choice of strategy: setting 
the priorities and allocation of the resources among the different kinds of activities 
for ensuring the implementation of the future strategy. 
The general level of the results the company can rely on is shown via the 
line of the existing potential (present possibility). If the company is satisfied it 
continues  the  planning  in  the  direction  of  development  of  the  technical  and 
operational plans. In many cases, though, the line of the present opportunities is 
unsatisfactory. Then as one and only possibility remains diversification. 
Adding  the  results  expected  from  the  new  activities  to  the  line  of  the 
current  opportunities,  the  company  formulates  the  general  objectives  and  tasks 
shown in figure 2. Their implementation depends on how energetically the present 
management will back them and to what extent it can secure resources for their 
implementation (Ansoff, 1999). 
 
Conclusion 
 
The differences between the essence and the procedures of long-term and 
strategic company planning could be summarized in several directions.  
In  long-term  planning  the  objectives  are  becoming  action  programmes, 
budgets,  and  plans  for  the  achieving  of  cost-effectiveness  of  the  individual 
branches of the company.  
In strategic planning extrapolation is replaced by a similar analysis, which 
could be related to the perspectives and aims for the development of the strategy. 
Strategic planning is implemented by means of projects limited within a certain 
period of time and requiring participation of the company’s all operating branches. 
After completing the project, the team is dismissed and the participants are going 
back to their departments where they regroup to start the implementation of a new 
project.  Therefore  strategic  planning  has  a  dynamic  character  and  is  based  on 
temporary organizational forms (Ansoff, 1999, р.р. 282 -283). 
To sum up, it could be said that long-term planning meets the company’s 
needs in those cases when future is related to the past and the present. However, 
when  the future  has  nothing  to  do  with the  present  and  the  past, the  need  for 
strategic planning emerges. 
In principle, long-term plans are made for a period larger than five years. 
In this respect, though, there cannot be a unified standard. Each company should 
determine the (long) term of its plans according to the sector it is active in and the 
characteristics of its activities. Review of International Comparative Management               Volume 12, Issue 1, March  2011  171 
Long-term as well as strategic planning cannot help the enterprise attain its 
goals if the developed plans are not successfully implemented. With regard to this 
it is necessary the managers to know in detail the means they have at hand for the 
realization of their corporate plans. These means include power, persuasion, and 
policy (Stonehouse, 2002), and have their practical manifestation. 
The laid out views of strategic and long-term planning in companies and 
the  distinguishing  features  between  these  categories,  draw  the  attention  of 
contemporary managers to pursuing and combining different methods depending 
on the characteristics of the company’s activity and the environment in which it 
operates. Whether to put the stress on long-term or strategic planning to a large 
extent depends on the complexity and the novelty of the tasks resulting from the 
environment. The choice of a contemporary reaction is related to the rate of change 
and the extent of predictability and availability of information for the resolving of 
the issues on top of corporate agenda. 
 
References  
 
1.  Agov, А., (2007). Samsung or the road of the three stars. Competitive business: 
the “Eco system” of Samsung.http://www.mediatimesreview.com/march2007/ 
samsung-conclusion2.php  Articles  published  in  Dnevnik  daily,  February  11, 
2008. 
2.  Ansoff, I., Strategic management. http://strategy.bos.ru/books.phtml?id-1&page-13  
3  Ansoff, I., (1999). New corporate strategy. Рublisher: PITER, Saint Petersburg. 
4.  Stonehouse,  G.,  Pemberton, J.,  (2002).  “Strategic  planning  in  SMEs  -  some 
empirical findings”. Management Decision, Vol. 40, No. 9. 
5  Захариев, E., (2002). Индустриален мениджмънт. Svistov. 
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Samsung or the road of the three stars. Competitive business: the “Eco system” of Samsung.http://www.mediatimesreview.com/march2007/ samsung-conclusion2.php Articles published in Dnevnik daily,

Systematisation of Corporate Planning

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