Long-range planning and growth control

Abstract

The subject of this thesis was long-range planning and growth control. The period of five years used as a planning horizon is logical in view of the unpredictability of today's business world which would make planning for a longer period totally unrealistic. The concept explored in this work is not new but the approach in obtaining future opportunities contains a certain degree of innovation. Compared to previous static and descriptive methods that are used in long-range planning or in business planning, this model takes into consideration historical information and tries to use it to reduce the gap between actual and projected values. In this thesis the authors did not presume to develop a growth forecast tool and, this model should in no way be considered as such. This model was developed for a fairly diversified conglomerate; its application and transposition to other types of corporations should not be undertaken without further studies and major modifications. Growth control is possible through the utilization of this tool provided that a business planning program exists and is operating effectively. The concept used in the allocation of the capital to the companies is based on the satisficing theory. This means that the capital allocation is not necessarily the optimum allocation but the best acceptable allocation under existing circumstances. If the satisficing theory is not used for capital allocation, further studies should be made. Possible orientation for such studies could be: sensitivity analysis, linear programming or dynamic programming for capital allocation. Such further studies would exceed the scope of this thesis. The objective of this project was the development of a practical management tool to control growth through the integration of all devices or techniques in use by today's executives, such as: computers, computers' library programs, management science techniques, business planning programs and management information systems. Through the integration of these devices, the authors hope to produce an awareness on the part of executives and managers to make better use of their techniques and skills in the orientation and conversion process of their companies' resources.