San Miguel Corporation and

A. Soriano Corporation
 BACKGROUND OF THE STUDY
In the early 1980s the San Miguel Corporation
(SMC) and A. Soriano Corporation (ANSCOR)Group of
Companies, under the leadership of Andres Soriano, Jr.
addressed a long felt need for an effective formal
planning system for the two companies.
According to Soriano, the companies had
developed their budgeting and long-ranged planning
systems several years earlier but, despite the many
advantages these gave them they still were not satisfied
with their ability to respond to the rapid changes in the
environment around them. Therefore, they search for a
process that would enable them to upgrade their
planning capability.
 In November 1982, Dr. Lorange
addressed a joint dinner-meeting of SMC
and ANSCOR Group and shares his insights
on the implementation of the strategic
planning of the two companies.
 SUMMARY/ABSTRACT
More than a decade ago, the ANSCOR
Group and SMC spent several years
developing and strengthening their
budgeting systems in order to have a better
internal focus on where they were going
over the short-term. Their next evolutionary
step was the development and
implementation of a long-range planning
process.
 This helped them to better understand
the resource requirements and constraints
of the future. While these systems definite
assisted them in planning for the future, the
rapidly changing environment and the
increase competition led them to search for
still other ways of further improving their
management approach.
 This article will discuss various aspect
of the strategic planning approach adopted
by the ANSCOR Group and SMC help them
cope with the future. First, I shall discuss
briefly the basic aspects of the approach
which can be described in terms of four
important dimensions.
 One dimension pertains to the
determination of the companies’ future
directions through hierarchy strategies under
this it is composed of three levels namely,
corporate level, Business Family level and
Business Element level.
 A second dimension is the delineation
of the major phase of the strategic planning
process, which composed of three major
phases, namely, Objective Setting Phase,
Strategic Programming and Budgeting.
 A third characteristic is the creation of a
strategic structure through which competitive
strategies can be developed.
 A final dimension is the identification of
a set of interactive and iterative steps that
the planning process consists of, it
discussed with the various sections must be
meaningfully put together as a process.
 Most companies of the size of the
ANSCOR Group and SMC will be
operationally organized around a complex
structure of specialized departments,
divisions, and subsidiaries. The raison d’
etre of the operating structure is to provide
specialized function and clear
responsibilities for operating tasks. The last
dimension is a pattern of interactive and
iterative Steps of the planning process.
 Under the implementation steps at the
ANSCOR Group and SMC there are four
steps that are essential for the successful
implementation of the strategic planning.
Under this, the commitment of top
management it is a consideration to ensure
that the management should involve from
the beginning and could thus trust from the
new process to support the new planning
approach because it strengthening the
company’s strategy development that set off
the effort to pursue the present approach,
strategic structure is the developing plans
using different approach, planning calendar
it is the identifying in detail the steps that
has to be undertaken in each phase and
process consultants is establishing the
planning calendar, developing suitable
guidelines for presentation of plans among
others.
 The third is some implementation
problems and their solutions are time
consuming in conducting meeting, too much
internal focus in developing the objectives
and strategic programs, and who were
asking for hand holding to guide them
through the process and lastly, some
benefits of the planning process, clearer
understanding of what truly takes to succeed
in a competitive world,
involved team spirit and a sense of team
responsibility for successful implementation
of the objectives and strategic plans, there is
more open communication among
managers in the corporation as a result of
cross functional memberships in business
families, and the planning process provided
the mechanism for top management to be
more exposed to a broader set of people
particularly high potential.
 TIME FRAME
1982. The time of Marcos regime. In which
the control of the ownership has been turned
political. Rapid changes to environment
merely occurred.
 MAJOR PROBLEMS
How would ANCOR and SMC respond
to the rapid changes in the environment
around them and how would they search for
a process that would enable them to
upgrade their planning capability?
 MINOR PROBLEMS
The two companies experienced difficulty in their
implementation phase and three problems occurred:
• the planning process is much time consuming
which involved more work than one might
reasonably expect of people;
• the two companies emphasized in developing the
objectives and strategic programs led to past
strategies outweighing the new strategies;
• there were some Business Family and Element
Teams who were asking for "hand-holding" to
guide to the process.
 OBJECTIVES
• Examine loopholes in the planning process.
• Develop a strategy for an efficient planning
process.
• Study pros and cons of the involvement of
past strategies in developing the objectives
and strategic program.
• Determine the effects of having no planning
manual or “hand-holding”.
• Decide on the need for developing a planning
manual for the planning process.
SWOT Analysis
 STRENGTHS
• Commitment of the top management and
employees’ participation.
• Establishment of business for many years.
• Already engaged in wide range of
businesses which make their company
and products known to people.
 WEAKNESSES
• Not flexible enough to adapt to
environmental changes.
• Carrying out well the plans and
implementation task.
 OPPORTUNITIES
• Exploring a new business area.
• Create more effective new planning
processes.
• Team-building workshops develop good
impact to employees.
 THREATS
• Failure of implementing their strategic
plans.
• Competitors and potential entrants.
 ALTERNATIVES COURSES OF ACTION

• Constitute a more active team of managers in

the planning process, develop new strategies
based on the past, and provide planning
manuals to all Business Family and Element
Teams.
• Formalize a decision team, formulate all-new
strategies, and resist giving plan manuals.
• No allocation of human resources or cross
fertilization and independence in family and
element team’s management decisions.
 RECOMMENDATION
1. Constitute a more active team of managers in the planning
process, develop new strategies based on the past, and
provide planning manuals to all Business Family and
Element Teams.
ADVANTAGES:
• The capabilities and skills of the personnel will be
evaluated.
• The performance efficiency and effectiveness of the
personnel will be determined
• Plans are materialized and initiated at a small time
frame
• Loopholes within the organizational strategy, goals, and
mission will be resolved
DISADVANTAGES
• The provision of manuals to all managers is very
costly
• Inefficiency and ineffectiveness caused by the
old strategies may be carried over to the new
strategies
• Conflict of perception between the managers
and the bosses
• Optimizing the capabilities and skills of the
personnel may be time consuming
2. Formalize a decision team, formulate all-new
strategies, and resist giving plan manuals.
ADVANTAGES:
• New strategies may lead to enhanced
performance
• The formation of a decision team would lead to
better decision making and plan
implementation
• Innovation of new ideas lead to greater
employee motivation and participation
• Loopholes within the organizational strategy,
goals, and mission will be resolved
DISADVANTAGES:
• The formulation of new strategies may
lead to even more loopholes
• Hand-holding will not be lessened without
plan manuals
• The reformation of the strategies may be
time consuming and costly
• The time frame in making a decision is
lengthened
 PLAN OF ACTION
Solution:
• Constitute a more active team of managers in
the planning process, develop new strategies
based on the past, and provide planning
manuals to all Business Family and Element
Teams.
• The more active managers are within the
organization, the more aware they become of
the inefficiencies and ineffective aspects of
the operations.
• Since the processes in an organization are
cycles, knowing loopholes within the
planning process would lead to more
efficient planning and in time, the
organization will reach the zenith of its
operations.
• Also, the development of new strategies must
include the development of a planning
manual in order to maintain the efficient and
effective performance of the organization and
the prevention of “hand-holding” by the
different family and element teams.
• Despite not having the luxury of time in
making decisions, a more active team of
managers would generate better decisions
made through employee cohesion, collusion
and synergy.
 CONCLUSION
Alternative 1 is the best alternative. It
states that both organizations must
constitute a more active team of managers
in the planning process, develop new
strategies based on the past, and provide
planning manuals to all Business Family and
Element Teams, tackled all of the objectives.
 Alternative 1 brings out the most
effective and efficient solution to the
organizations’ setbacks. Furthermore, with
the help of alternative 1, managers will be
more active in the organizations and learn
firsthand how the organizations operate.
 LEARNINGS
The greater the loyalty of a group
toward the group, the greater is the
motivation among the members to achieve
the goals of the group, and the greater the
probability that the group will achieve its
goals.
 Still, teamwork and cooperation are the
main keys for every success. Though there
would be things and events that are
uncontrollable but there’s no such thing as
problem forever. Everything can be handled
and solved through courage and
determination.