Although the initiative to identify and analyse strategic options is the responsibility of the Head of Sector, the guidance given to him by the headquarters for the presentation of his proposals influences the way in which he follows the task. Management is increasingly being asked to present, when proposing a strategy and setting objectives, a statement of the alternative strategies it has evaluated and rejected. The intention is not to allow headquarters to advise against the thinking of the head of department, but to ensure that he uses strategic thinking to arrive at his recommendations. The fact that the company`s objectives are generally more or less the sum of the divisional objectives sought by senior management implies that the head office is focusing on rather minor adjustments to this target portfolio. If so, the first cycle of formal planning has the salutary effect that it offers an annual “intermediate course correction” for the development of combined enterprises. Momentum is a factor in the continued success of a diverse company – like a rocket en route to the Moon – and a wise chairman of the board doesn`t dissolve it unnecessarily. On the contrary, it raises the energy beam of its sector managers and tries to make minor adjustments early enough to be uninterrupted while influencing the group`s position several years in advance. The reason why companies apply a complex planning process like the one in Figure II is illustrated by the example of a multi-billion euro diversified company, including headquarters in Europe and a multinational organization, had a well-established budgeting process, but which found it difficult to “negotiate” the final budget in the last months of each year. The company was divisionalized, but it had decentralized very few initiatives to examine policy options.
Maintenance and coordination of the system is the main function of the planner when the planning work matures; it monitors its evolution and maintains its consistency. His tasks are very different from the predominantly analytical role of the planner in the small business. In the first dialogue between the management of the company and the management of the sector – from the beginning of February – the two groups form a statement on the objective and objectives of the company. . . .