Principles of Management Goal Goals and Plans A desired future state that the organization wants to achieve What do we want Plan A blueprint of the actions necessary to reach the desired goal How do we get there Planning Planning Planning Dimensions The level of management developing the plan The type of plan strategic or operational The scope of the plan broad or narrow The time horizon of the plan short or long term The plan s repetitiveness standing or single use Planning Planning Dimensions Dimensions Exhibit 5 1 Planning Planning Dimensions Dimensions Levels of Goals Plans NASA A Mission Statement describes our purpose Mission Statement Corporate Strategy Strategic Plans Everything we do is focused on getting there Strategic level is the Big Picture Senior Management Business Tactical Goals Tactical Plans Middle Management Functional Goals Functional Plans Lower Management Take a man to the moon by 1970 Tactics break strategies into steps Build a rocket and launch pad And smaller steps Build part of a rocket Types Types of of Plans Plans Standing Plans Policies procedures and rules developed for handling repetitive situations Policies General guidelines to be followed when making decisions Procedures A sequence of actions to be followed in order to achieve an objective Rules A statement of exactly what should or should not be done Types Types of of Plans Plans cont d cont d Single Use Plans Programs and budgets developed for handling nonrepetitive situations Program A set of activities designed to accomplish an objective over a specified period of time Program development Set project objectives Break the project down into a sequence of steps Assign responsibility for each step Establish starting and ending times Determine the resources needed for each step Types Types of of Plans Plans cont d cont d Single Use Plans Budget Represents the funds allocated to operate a unit for a fixed period of time Is a planning tool initially and becomes a control tool after implementation of the plan Standing Standing versus versus Single Use Single Use Plans Plans Exhibit 5 2 Types Types of of Plans Plans cont d cont d Contingency Plans Alternative plans to be implemented if uncontrollable events occur Developing a contingency plan What might go wrong in my department How can I prevent it from happening If it does occur what can I do to minimize its effect Why Managers Don t Plan Claimed lack of time Tendency toward action Strategic Strategic and and Operational Operational Planning Planning Strategic Planning The process of developing a mission and longrange objectives and determining in advance how they will be accomplished Operational Planning The process of setting short range objectives and determining in advance how they will be accomplished Strategy A plan for pursuing the mission and achieving objectives The The Strategic Strategic Process Process Exhibit 5 3 Strategic Strategic Planning Planning Corporate Level Strategy The plan for managing multiple lines of businesses Business Level Strategy The plan for managing one line of business Functional Level Strategy The plan for managing one area of the business Strategic Strategic and and Operational Operational Levels Levels Exhibit 5 4 Industry Industry and and Competitive Competitive Situation Situation Analysis Analysis Situation Analysis Draws out those features in a company s environment that most directly frame its strategic window of options and opportunities Five Competitive Forces Porter Rivalry among competing sellers in the industry Threat of substitute products and services Potential new entrants Power of suppliers Power of buyers Starbuck s Starbuck sFive Force Five Force Competitive CompetitiveAnalysis Analysis Exhibit 5 Company Company Situation SituationAnalysis Analysis Steps Steps 1 1 Assessment Assessmentof ofthe thepresent presentstrategy strategybased based on performance on performance 2 2 SWOT SWOTanalysis analysis 3 3 Competitive CompetitiveStrength StrengthAssessment Assessment competitive advantage competitive advantage 4 4 Conclusions Conclusionsconcerning concerningcompetitive competitive position position 5 5 Determination Determinationof ofthe thestrategic strategicissues issuesand and problems that need to be addressed problems that need to be addressed through throughstrategic strategicprocesses processes Exhibit 5 6 Strategic Strategic Management Management Process Process Situation SituationAnalysis Analysis via via SWOT SWOT Scan External Environment National Identify Strategic Factors Opportunities Global Threats Evaluate Current Mission Goals Define New Mission SWOT Goals Grand Strategy Grand Strategy Scan Internal Environment Core Competence Synergy Value Creation Identify Strategic Factors Strengths Weaknesses Identify Strategic Corporate Business Functional Implementing Strategy via Changes in Structure Human resources Information control systems SWOT SWOTAnalysis Analysisfor for Starbucks StarbucksCoffee Coffee Exhibit 5 7 Competitive Competitive Strength StrengthAssessment Assessment for for Starbucks Starbucks Coffee Coffee Exhibit 5 8 Competitive Competitive Advantage Advantage Core Competency A functional capability strength that the firm does well and one that creates a competitive advantage for the firm Benchmarking The process of comparing an organization s products or services and processes with those of other companies Environmental Scanning Searching the external environment for opportunities and threats Setting Setting Objectives Objectives Objectives State what is to be accomplished in singular specific and measurable terms with a target date Goals Are general targets to be accomplished that are translated into actionable objectives Criteria Criteria That That Objectives Objectives Should Should Meet Meet Exhibit 5 9 Management Management by by Objective Objective MBO MBO Management by Objectives Step 1 Set individual objectives with plans jointly with employees Step 2 Give feedback and evaluate Step 3 Reward performance according to results Model Model of of the the MBO MBO Process Process Step 1 Setting Goals Developing Action Plans Corporate Strategic Goals Departmental Goals Individual Goals Action Plans Review Progress Step 2 Reviewing Progress Corrective Action Appraisal of Overall Performance Step 3 Reward Positive Performance MBO Benefits and Problems Principles of Management Benefits of MBO 1 Manager and employee efforts are focused on activities that will lead to goal