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Investment for profitability
Book Reviews Edited by Harry Jones
Handbook of Strategic Planning, Edited by BERNARD TAYLOR and KEVIN HAWKINS, Longman, London (1972). 456 pp. E7.50 (hardback). Strategic planning, and in particular corporate planning, has become one of the major preoccupations over the last few years of directors and senior executives in industry, commerce and government. As a result of this interest and the vast proliferation of articles, books, seminars and conferences in mosf countries of the world, there is no lack of literature. Here is yet another book to add to this body of knowledge. Together with the Society for Long Range Planning and the British Institute of Management, the University of Bradford Management Centre was one of the United Kingdom pioneers of conferences and seminars on corporate planning. From the many papers presented on these occasions over the period 1967-1970, Taylor and Hawkins of the Bradford Management Centre have selected those which they consider relevant today-supplemented with articles reprinted from various British and American journalsand have edited these into a handbook of strategic planning. As with most handbooks, practitioners of the subject covered by it will find little that is new, with the exception of a perceptive final article by Bernard Taylor in which he reviews the present state of the art of corporate strategic planning and discusses future trends in its development as a field of business practice and as a topic for research, teaching and consultancy. Newcomers to corporate planning. however, will find the contents of the handbook useful for gaining an appreciation of the total process, with sources of further information through references given in the text. To end. a full bibliographysuch as that published by the journal of the Society for Long Range Planning-would have been a most useful addition. . Unlike most of the other published books on corporate planning, this book includes a considerable amount of thought and experience on the subject which has been drawn from British companies. Corporate strategy is not a purely American phenomenon: as the articles in the book siiggest, it can and should be practised by British managers in the same measure as their transatlantic competitors. This is not to imply that American models should be uncritically imitated in British industry. On the contrary, it is important that we learn from the mistakes which American companies have made in formulating and applying corporate strategy. The point made by the editors is that corporate strategic planning should no longer be regarded as an impossibly highbrow exercise which only top-drawer executives in large American corporations can undertake. A strategic approach to the management of a business can be successfully applied in any situation. KEHNETH E. LANDER Urwick, Orr & Partners London
90
Ltd.
Professional Management : New Concepts and Proven Practices, by Louts A. ALLEN, McGrawHill Book Company (U.K.) Ltd., Maidenhead, Berkshire (1973). 236 pp. f3.60 (hardback).
This is the most meaningful finding of Rockley’s book which is based on research inlo the investment process of 69 U.K. companies (65 of which are manufacturers).
The stated objective of this latest book by Louis Allen is to help the manager perform his job more efficiently. It sets out to provide a unified statement of the essentials of management practice and aims to bring the reader up 10 date by integrating findings from various relevant fields.
The author also reaches the conclusion that little attention is paid to calculating the weighted cost of capital or in using mathematical techniques of analysis. On the other hand DCF is now being used extensively, particularly by the often in conjunction with larger companies: payback measures.
It can best be described as an essay in modified classical management theory. The ‘modifications’ mainly reflect some of the more highly popularized work in the behavioural sciences. One gets the feeling that the modifications are stuck on like a mass-produced house extension rather than integrated into the basic structure of thought and analysis. The framework of the book is the familiar one of the management functionsplanning. organizing, leading (this used to be called ‘directing’ but presumably this word has now become socially unacceptable) and controlling. There is also evidence of the irritating characteristic of the classical school of elevating commonsense observations into Principles. For example, there is the Principle of Planning Sfability, which tells us that the further we project a plan into the future the less certain can we be that things will work out exactly in the way we intended. The many principles and precepts with which the book abounds convey similar amounts of illumination, not least the two-page section on “the technique of organization change” which is modestly described as “a proven method of evolving an organization structure best suited to the long term objectives of the company.” Finally, one is baffled by the publisher’s claim that the book was written primarily for the U.K. manager. Certainly the list of references quoted would not give the reader great coniidence in the author’s knowledge of British management situations or of the research that has been carried out on this side of the Atlantic. P. SADLER Ashridge Management Hertfordshire
College
Investment for Profitability. by L. E. ROCKLEY, Business Books, London (1973), 320 pp. f6.75 (hardback). “To the Board of Directors. Please continue to exercise a tight control on the authorization of capital proposals, but be prepared to delegate the responsibility for origination and investigation to a closely-knit group of immediate subordinates, if you wish to remain profitable.”
The book is an analysis of the practices of U.K. companies and not, as the publishers claim, an analysis of the policies and practices of U.K. companies. The word ‘international’ does not feature in either content list or index, nor is the book concerned with the strategy of investment decisions, but with the process of how decisions are made. The best parts of the book are the questionnaire, the chapter introductions and summsries, and the appended case data. Within each chapter the analysis follows a common pattern which is both too detailed and too monotonous in style to make interesting reading or to facilitate immediate comprehension. Indeed, I would recommend the erstwhile reader to tackle the chapter summaries and concluding chapter before delving into the details. Within each chapter-origination of proposals: authorization; evaluation; cost of capital and rates of return; expenditure control; decision appraisal-summaries of statistical data are well organized and worth mulling over, though I have some reservations on the adequacy of the classification scheme. The depth of research and its relevance make this book invaluable to those business men who are concerned with the mechanics of decision making; and thus--the Corporate Planner. H. S. CORLETT Managing Director Resource Planning,
Hertfordshire
Britain 2001 A.D.: A Forecast of the U.K. Economy at the Turn of the Century, by COLIN LEICESTER,for the Post Office, H.M.S.O., London (1972). 46 pp. E2.50 (softback). This report comprises forecasts of the U.K. economy at the turn of the century and was prepared by Leicester for use by the Long Range Studies Division of the Post Office. As such it was intended to deal with the factors which would influence the planning decisions of this authority in respect of its responsibilities for the provision of telecommunications systems in the U.K. The approach to the economic environment of the year 2001 is achieved by a combination of econometrics, trend analysis and judgement. These are applied through models which are described in the appendices of the report. Three
LONG RANGE PLANNING
Handbook of Strategic Planning, Edited by BERNARD TAYLOR and KEVIN HAWKINS, Longman, London (1972). 456 pp. E7.50 (hardback). Strategic planning, and in particular corporate planning, has become one of the major preoccupations over the last few years of directors and senior executives in industry, commerce and government. As a result of this interest and the vast proliferation of articles, books, seminars and conferences in mosf countries of the world, there is no lack of literature. Here is yet another book to add to this body of knowledge. Together with the Society for Long Range Planning and the British Institute of Management, the University of Bradford Management Centre was one of the United Kingdom pioneers of conferences and seminars on corporate planning. From the many papers presented on these occasions over the period 1967-1970, Taylor and Hawkins of the Bradford Management Centre have selected those which they consider relevant today-supplemented with articles reprinted from various British and American journalsand have edited these into a handbook of strategic planning. As with most handbooks, practitioners of the subject covered by it will find little that is new, with the exception of a perceptive final article by Bernard Taylor in which he reviews the present state of the art of corporate strategic planning and discusses future trends in its development as a field of business practice and as a topic for research, teaching and consultancy. Newcomers to corporate planning. however, will find the contents of the handbook useful for gaining an appreciation of the total process, with sources of further information through references given in the text. To end. a full bibliographysuch as that published by the journal of the Society for Long Range Planning-would have been a most useful addition. . Unlike most of the other published books on corporate planning, this book includes a considerable amount of thought and experience on the subject which has been drawn from British companies. Corporate strategy is not a purely American phenomenon: as the articles in the book siiggest, it can and should be practised by British managers in the same measure as their transatlantic competitors. This is not to imply that American models should be uncritically imitated in British industry. On the contrary, it is important that we learn from the mistakes which American companies have made in formulating and applying corporate strategy. The point made by the editors is that corporate strategic planning should no longer be regarded as an impossibly highbrow exercise which only top-drawer executives in large American corporations can undertake. A strategic approach to the management of a business can be successfully applied in any situation. KEHNETH E. LANDER Urwick, Orr & Partners London
90
Ltd.
Professional Management : New Concepts and Proven Practices, by Louts A. ALLEN, McGrawHill Book Company (U.K.) Ltd., Maidenhead, Berkshire (1973). 236 pp. f3.60 (hardback).
This is the most meaningful finding of Rockley’s book which is based on research inlo the investment process of 69 U.K. companies (65 of which are manufacturers).
The stated objective of this latest book by Louis Allen is to help the manager perform his job more efficiently. It sets out to provide a unified statement of the essentials of management practice and aims to bring the reader up 10 date by integrating findings from various relevant fields.
The author also reaches the conclusion that little attention is paid to calculating the weighted cost of capital or in using mathematical techniques of analysis. On the other hand DCF is now being used extensively, particularly by the often in conjunction with larger companies: payback measures.
It can best be described as an essay in modified classical management theory. The ‘modifications’ mainly reflect some of the more highly popularized work in the behavioural sciences. One gets the feeling that the modifications are stuck on like a mass-produced house extension rather than integrated into the basic structure of thought and analysis. The framework of the book is the familiar one of the management functionsplanning. organizing, leading (this used to be called ‘directing’ but presumably this word has now become socially unacceptable) and controlling. There is also evidence of the irritating characteristic of the classical school of elevating commonsense observations into Principles. For example, there is the Principle of Planning Sfability, which tells us that the further we project a plan into the future the less certain can we be that things will work out exactly in the way we intended. The many principles and precepts with which the book abounds convey similar amounts of illumination, not least the two-page section on “the technique of organization change” which is modestly described as “a proven method of evolving an organization structure best suited to the long term objectives of the company.” Finally, one is baffled by the publisher’s claim that the book was written primarily for the U.K. manager. Certainly the list of references quoted would not give the reader great coniidence in the author’s knowledge of British management situations or of the research that has been carried out on this side of the Atlantic. P. SADLER Ashridge Management Hertfordshire
College
Investment for Profitability. by L. E. ROCKLEY, Business Books, London (1973), 320 pp. f6.75 (hardback). “To the Board of Directors. Please continue to exercise a tight control on the authorization of capital proposals, but be prepared to delegate the responsibility for origination and investigation to a closely-knit group of immediate subordinates, if you wish to remain profitable.”
The book is an analysis of the practices of U.K. companies and not, as the publishers claim, an analysis of the policies and practices of U.K. companies. The word ‘international’ does not feature in either content list or index, nor is the book concerned with the strategy of investment decisions, but with the process of how decisions are made. The best parts of the book are the questionnaire, the chapter introductions and summsries, and the appended case data. Within each chapter the analysis follows a common pattern which is both too detailed and too monotonous in style to make interesting reading or to facilitate immediate comprehension. Indeed, I would recommend the erstwhile reader to tackle the chapter summaries and concluding chapter before delving into the details. Within each chapter-origination of proposals: authorization; evaluation; cost of capital and rates of return; expenditure control; decision appraisal-summaries of statistical data are well organized and worth mulling over, though I have some reservations on the adequacy of the classification scheme. The depth of research and its relevance make this book invaluable to those business men who are concerned with the mechanics of decision making; and thus--the Corporate Planner. H. S. CORLETT Managing Director Resource Planning,
Hertfordshire
Britain 2001 A.D.: A Forecast of the U.K. Economy at the Turn of the Century, by COLIN LEICESTER,for the Post Office, H.M.S.O., London (1972). 46 pp. E2.50 (softback). This report comprises forecasts of the U.K. economy at the turn of the century and was prepared by Leicester for use by the Long Range Studies Division of the Post Office. As such it was intended to deal with the factors which would influence the planning decisions of this authority in respect of its responsibilities for the provision of telecommunications systems in the U.K. The approach to the economic environment of the year 2001 is achieved by a combination of econometrics, trend analysis and judgement. These are applied through models which are described in the appendices of the report. Three
LONG RANGE PLANNING