Question

‘Leno’ is a reputed car manufacturing company, which is going to complete its 75 years in October 2024. The Chief Executive Officer of the company decided to take the company to a higher level. For this he called a meeting of all departmental heads of the company. In the meeting, the Chief Executive Officer proposed a target to increase sales by 10 percent and profits by 20 percent in its Platinum Jubilee year. The Human Resource Manager estimated that an increase of 500 workers would be required to achieve the target. The Finance Manager suggested that the company must hold adequate cash balances for various purposes, and he will prepare a statement showing the estimated cash inflows and outflows for this particular period.
Identify and explain two types of plans discussed in the above case.

Hint:

Strategy sets the destination; operational plans pave the road to get there.

Answer 1

`Types of Plans in the Leno Case:

• Strategy: The CEO’s decision to increase sales by 10% and profits by 20% is a strategic plan. It’s a long-term broad vision to enhance growth.
• Operational Plan/Budget: The Finance Manager’s preparation of cash inflow-outflow statements reflects an operational plan that supports the broader strategy.