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Management article
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Reference no. 75108
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1975

Abstract

A complex formal planning process adopted by a multibillion-dollar, diversified corporation headquartered in Europe involved a three-cycle system. The first cycle involved corporate executives and division managers and served two purposes: 1) to develop a tentative set of agreements between corporate and division managers about overall strategy and goals, and 2) to provide for more detailed planning in the next cycle. The second cycle, involving functional managers, served a dual purpose: it allowed tentative agreements to be reached on action programs to be implemented over the next few years, and it expanded the strategic focus of the business. The third cycle dealt with resource allocation decisions and budgeting at the functional level.

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Abstract

A complex formal planning process adopted by a multibillion-dollar, diversified corporation headquartered in Europe involved a three-cycle system. The first cycle involved corporate executives and division managers and served two purposes: 1) to develop a tentative set of agreements between corporate and division managers about overall strategy and goals, and 2) to provide for more detailed planning in the next cycle. The second cycle, involving functional managers, served a dual purpose: it allowed tentative agreements to be reached on action programs to be implemented over the next few years, and it expanded the strategic focus of the business. The third cycle dealt with resource allocation decisions and budgeting at the functional level.

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