Post Graduate Diploma in Business Management

Assignment 3 Role of strategic Business Planning in Organizations

Submitted by: Muhammad Farhan Shamir PGD (BM) Level 7

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Table of Contents
Introduction: ...................................................... 3 Overview of the company: ........................... 3 Purpose/ Objective of the Paper: ............. 3 Aims and Objectives: ...................................... 4 SMART Objectives: .......................................... 4 Sustainable Strategy: ...................................... 5 Tactics: .................................................................. 5 Conclusion: .......................................................... 6 References and Books: .................................. 6

Introduction:
The challenge that every businesses face today is how to use resources more efficiently and effectively. In this era 21 st century, the central and global economic problem is how to match finite resources with unlimited wants. After the downturn of the world s economic activity in 2008, it has now become more necessary and important to find ways and procedures to reduce costs, reduce the need of energy and minimize wastes. With the rising demand of resources, this is becoming more and more difficult. Global companies today believe that this can be achieved by operating in innovative and socially responsible ways, which would help in gaining competitive advantage. Anglo American is one of those companies, which believes that social responsibility and sustainable development are the two important keys these days.

Overview of the company:

Anglo American is one of the worlds largest mining companies. Headquartered in London, United Kingdom, it is a major producer of diamonds, copper, nickel, iron ore metallurgical and thermal coal. It is the world s largest producer of platinum with a share of around 40% in the world s output. The company has operations in Africa, Asia, Europe, North and South America. It fully owns subsidiaries include Anglo Base Metals, Anglo Ferrous Metals and Industries, Anglo Coal and Anglo Industrial Minerals. Partially owned subsidiaries include Copebras (Brazil), Anglo Platinum Ltd (South Africa)(79.6%)and 63.4% of Kumba Iron Ore. Anglo American also holds 45% of di amond mining company, De Beers. The company had 105,000 permanent employees and 39,000 contract employees in its managed operations located in 45 countries in 2008. Mission statements of the company sets out the aims and purpose of the organization: to be the leading global mining compan y through the operational excellence of world class assets in the most attractive commodities and a resolute commitment to safe and sustainable mining

Purpose/ Objective of the Paper:

The purpose of this paper is to shed some light upon how Anglo American through its aims and objectives is driving towards an approach to sustainable development. This paper will talk about the terms aims and objectives and how these aims and objectives help support Anglo American s social responsibility values. The main objective of this paper is to identify the key components, which are being used by Anglo American on its path towards achieving sustainable development and becoming a socially responsible entity.

Aims and Objectives:

Aims and objectives are always linked but often confused. However, they are quite different from each other. In layman terminology, Aims are the changes we hope to achieve as a result of work and objectives are the activities we undertake to bring these changes. Outcomes that are defined as a part of project planning are our aims and the actions that are there to be taken in order to achieve the desired outcome are referred to as objectives. Businesses these days need to have a clear aim to work towards. Anglo American aims are completely set out in its mission statement. To become the leading global mining company, resolute commitment to safe and sustainable mining are the main aims the company seeks. Objectives are the medium term stepping stones for the companies to help achieve their aims.Anglo American considers itself a socially responsible entity that accepts obligations towards the community and wider society. Anglo American s aims and objectives support and compliment its social responsibility. For example, in the mission statement of the company, it clearly states that one of the company s main aims is resolute commitment to safe and sustainable mining. Safe mining is an example of company being socially responsible and accepting its obligations towards the community. The company aims to maximise the value for its shareholders and local community, way to do this is by creating jobs in small and medium enterprise and support schemes where its operations are active. This would be another example of Anglo American s aims and objectives supporting its social responsibility values. Reduce emissions, use water efficiently etc. are all proves of Anglo American s social responsibility.

SMART Objectives:
SMART objectives are used to evaluate and identify the objectives and goals for an individual project. It is a term that is used for the performance management where goals and targets set for the employees must fulfil the criteria. SMART stands for Specific, Measurable, Attainable, Relevant and time framed. By the name suggests, these objectives set by an organization help them to set out their objectives in ways that are clear and easy to measure. Using these objectives, it becomes easier to assess whether targets have been met. Like in case of Anglo American, objectives like creating jobs and support schemes where its operations are active are specific, relevant, achievable, and measurable and time frame. Other SMART objectives for Anglo American may include: y To win the trust of the governments to enter new markets (Relevant) y To make $1 billion of savings on goods and services (Measurable) y To implement efficiency projects to manage energy emissions and wastes (time framed) y To re-use water where possible or putting clean water back into the environment(achievable) y To achieve 10% reduction in emissions per unit of production (Achievable & time framed) y To centralize procurement for core business to achieve cost savings of $1 billion by 2011 (specific, measurable and time framed)

Using SMART objectives will help Anglo American to gain sustainable development and competitive advantage over its rivals. Objectives mentioned above are also responsible for Anglo American to become socially responsible and make a difference.

Sustainable Strategy:
Strategies are means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, product development, market penetration etc. Strategies are potential actions that require top management decisions and large amount of firm s resources. Sustainable strategies are those strategies, which are realistic and implementable. The management uses these strategies in order to gain sustainable development and competitive advantage. In addition management uses thee strategies to have an impact on organization s long-term prosperity and thus are future oriented. Anglo American has a number of key components of sustainability strategies. Its strategy is to focus on sustainable development. Sustainable development is a new idea that has received new recognition for many businesses. Protecting an organization s capital base is a well-accepted business principle. Yet organizations do not generally recognize the possibility of extending this notion to the world s natural and human resources. If sustainable development is to achieve its potential, it must be integrated into the planning and measurement systems of business enterprises. And for that to happen, the concept must be articulated in terms that are familiar to business leaders. Below is given a suggested definition for sustainable development from a reliable source: For the business enterprise, sustainable development means adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future (Source: Business Strategy for Sustainable Development: Leadership and Accountability for the 90s, published in 1992 by the International Institute for Sustainable Development in conjunction with Deloitte & Touche and the World Business Council for Sustainable Development)

Tactics:
Tactics are short-term plans and actions, which are used to put strategies into practice. Anglo American s programmes use new technology to make better use of resources. It invests in carbon capture technology. For example, Anglo American has two mine gas power stations in Australia that capture methane gas from mines. Methane gas is then reused to produce energy. This is a tactic used by Anglo American to being more efficient and sustainable as it hits two birds with one stone. Firstly, it results in lower emissions and secondly, lowers energy use by the company. Establishment of a new wind farm at Anglo American s Zinc mine in Ireland is another example of tactic used by the company to enable better use of resources, 5

leading to greater efficiency and sustainable practice. The location for this site was suitable as it was connected to the national grid and naturally windy. This provides electricity for mine operations and two local towns and will continue to serve the community even after the mine has been closed. These types of tactics are most likely to help Anglo American to achieve sustainability aims, social responsibility and sustainable development.

Conclusion:
It is very important for sustainable businesses these days to use their resources carefully. It is one of their premier priorities to make sure that people have same access to these resources not only now but also in future as well. Anglo American s main aims include becoming socially responsible, to acquire sustainable development and competitive advantage. Anglo American shows its focus on using less energy and reducing waste through its aims, objectives, values and strategy. This helps win the support of all stakeholders.

References and Books:

The Times100. (2010). Social Responsibility - using resources more effeciently. The Times 100 Business Case Studies. 15 (1), p10-12. Business Strategy for Sustainable Development: Leadership and Accountability for the 90s, published in 1992 by the International Institute for Sustainable Development in conjunction with Deloitte & Touche and the World Business Council for Sustainable Development Strategic Management: Concept & Cases 10th Edition by Fred David. PrenticeHall. THOMPSON, J. (2000) Strategy Management: Awareness and Change, 4th Edition, Thomson Learning, England http://www.angloamerican.com/aal/about/ http://en.wikipedia.org/wiki/Anglo_American_PLC http://www.ces-vol.org.uk/index.cfm?pg=123 http://en.wikipedia.org/wiki/SMART_criteria http://www.marketingteacher.com/lesson-store/lesson-objectives.html