You are interviewing for the position of Director of Strategic Business Planning at the Lawrence Manufacturing Corporation. Present are the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), the Presidents of three of the six business units, and the Vice Presidents for Marketing, Economics, Engineering, Information Technology, and Government Relations.
Lawrence is a $20 billion dollar, multi-national corporation with production facilities in six countries and sales in over 50 countries around the globe. The company has six major business units: Home Appliances; Electrical Equipment; Industrial Tools; Agricultural Equipment; Automotive Parts; and an expanding Financial Services business that markets a broad range of commercial financing, insurance and credit services. Many of the business units purchase common parts and components from the same vendors; utilize similar technologies; and serve common customers.
The CEO explained that the company had never engaged in business planning. The business units operate ?more or less on their own.? She explained that this has worked well in the past but that the company has failed to meet its profit and market share goals in the last three years. She expressed confidence in her management team, explaining that the economies in several of their largest markets were depressed; new, onerous environmental regulations had increased their costs; and that they had been surprised when several domestic competitors introduced new, innovative products, and when a new foreign competitor had entered the market offering products at significantly lower prices. Nevertheless, she feels it is now necessary to introduce business planning at Lawrence to improve overall performance.
The CFO, in a hostile voice, quickly added that his staff always established challenging financial targets for the business units, and held them to strict capital spending limits and tight budgetary controls. In his view, this was sufficient. You took note of this.
The CEO then asked you to explain the basic concept of strategic business planning and how it would help improve performance at Lawrence since they had never engaged in any type of planning beyond basic financial forecasting. She specifically asks you what her role would be in the planning process, what the corporate headquarters? responsibilities would be and how the corporation would add value to the business units.
The three Presidents of the business units and the functional executives also wanted to know what their specific roles and responsibilities would be in this new planning process, and how their performance would be evaluated and rewarded.
The Vice President of Information Technology also wanted to know what types of external and internal information would be required to develop the business plans, and how they would obtain this information. He wanted to know what types of analytical tools, methodologies and skills they would need to generate and analyze this information.
One of the Presidents of the business units asks you to explain what a business plan consist of and how they will know if they have developed a good plan.
Finally, the CEO stated emphatically that she did not have the time to spare or the resources to devote to writing business plans that would only ?gather dust on the shelves.? She asks you how you would ensure that the plans were implemented effectively.
You take a deep breath ? long enough to organize your response to the questions they raised:
? Basic concepts of strategic business planning
? Strategic planning at the Corporate level
? Roles of SBU managers and functional executives
? Analysis of external and internal environments
? An effective business plan
? Analytical tools and concepts (Accounting, Business Law, Finance, Organization Behavior, Microeconomics, Marketing, Macroeconomic, Leadership and Management)
You look right at the CFO with the confidence that comes from long hours of study, hard work and thorough preparation. You say to yourself: ?This job is mine!?
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