The Quaker Oats Company

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EXECUTIVE SUMMARY
A strategic plan has financial and other implications over the next several years of implementing the company strategies. And strategies come in different forms and magnitudes. Since strategic plans covers a relatively long range of period, difficulties in maintaining the organization’s effort to keeping the strategic plan arise.

The Quaker Oats Company began long range planning in fiscal 1965. The plans created that year and annually thereafter were primarily numbers-oriented estimates of income and requirements of capital. Mr. Robert D. Stuart Jr. announced in September 1970 announce the reorganization of management structure. The reorganization decentralized all operation into four major profit centers. Harry Ambrose had been appointed The Quaker Oats Company’s director-long-range planning. An MBA with nine years of managerial experience but no previous exposure to the management of formal planning systems, in early 1971 Mr. Ambrose had a task of guiding the company through what is essentially the initiation of formal, long range planning. Mr. Ambrose also has objectives to attain for the betterment of long-range planning. First, he would like to establish in managers’ mind that long-range planning is perpetual and is an important part of their jobs. Second, he would like to educate them in the rationale of long-range planning. In particular, he needs to break them away from thinking that long-range planning is the extrapolation of short-term quantitative relationship. In order to address the function of Mr. Ambrose, the proponents discussed how The Quaker Oats Company will develop its planning and control system. The recommendations include the establishment of linkage between long term and short terms, its review and monitoring, advocacy and principles in planning.

CASE CONTEXT
Mr. Harry T. Ambrose had recently been appointed The Quaker Oats Company’s director-long range planning. Mr. Ambrose had the task of guiding the company through what was essentially the initiation of formal long-range planning.

The Quaker Oats Company began long-rang planning in 1965. The plans created that year, and annually thereafter were primarily numbers oriented estimates of income and requirement of capital. Emphasis was placed on first year of the annual three-year plan; the last two years were more or less extrapolations of the first year. Concentration was on existing business in great financial detail.

Mr. Ambrose’s function was to aid Mr. Guinee in designing and overseeing a formal planning system that recognized the changing management needs of the company. He shall work with the Profit Planning and Analysis (PP&A) department for staff function requirements especially on financial figures.

The management’s intention on the purpose of long-range planning was to develop agreement among divisional, group and corporate management on written goals and strategies based on projections of long term needs. This will entail identification of future resource needs of skills, personnel, organization, finances and new businesses to allow for their development in an orderly manner. PROBLEM DEFINITION

How will The Quaker Oats Company develop and design its planning and control system? FRAMEWORK FOR ANALYSIS & AREAS OF CONSIDERATION
The Quaker Oats Company has already incorporated strategic planning it its system. However the current condition of the company shall make the following pointers be noted: 1. Harry T. Ambrose appointed as Director for Long Range Planning, an MBA with nine years of managerial experience but no previous exposure to the management of formal planning system. 2. Robert D. Stuart, Jr. announced in September 1970 a reorganization of the company’s management structure. The organization decentralized all operations into four major profit centers called “groups”; international, toys and recreational products, industrial and institutional and grocery products. 3. Long range...
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