The Planning Process-Planning is the conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future-Planning moves in a cycleStep 1: Analyze the situation-Situational analysis is a process planners use, within time and resource constraints, to gather, interpret, and summarize all info relevant to the planning issue under consideration-it should provide info about the planning decisions you need to makeStep 2: Generate Alternative goals and plans-the planning process should generate alternative goals that may be pursued and alternative plans for achieving those goals-Goals are the targets or ends the manager wants to reach-Goals should have certain qualities, SMART:-Specific-Measurable-Attainable-Relevant-Time-bound-Plans are the actions or means the manager intends to use to achieve goals-single-use plans are designed to achieve a set of goals that are not likely to be repeated in the future-Standing plans focus on ongoing activities designed to achieve an enduring set of goals-Contingency plans specify actions to take when a company’s initial plans have not worked well or events in the external environment require a sudden changeStep 3: Evaluate Goals and Plans-every plan needs to be evaluated so the advantages, disadvantages, and potential effects are knownStep 4: Select Goals and PlansOnce the goals and plans have been assessed, the most appropriate and feasible alternative should be selected-Scenarios are a narrative that describes a particular set of future conditions-a contingency plan is attached to each scenarioStep 5: Implement the goals and plans-Managers and employees must understand the plan, have the resources to implement it, and be motivated to do so-linking the plan to other systems in the organization, such as the budget and rewardsystems, helps ensure its successful implementationStep 6:Monitor and Control Performance-Plans must be continually monitored to see if the goals are being met.MQM CH 5 Strategic planning and decision makingLevels of Planning-planning is used by managers at all four levels- top-level to team leadersStrategic planning sets a long-term direction-Strategic planning involves making decisions about the organization’s long-term goals and strategies-they have strong external orientation and cover major portions of the organization-Strategic Goals are major targets or end results that relate to the long-term survival, value, and growth of the organization-typical strategic goals include growing, increasing market share, improving profitability, boosting return on investments, etc.-a Strategy is a pattern of actions and resource allocations designed to achieve the organization’s goalsTactical and Operational planning support the strategy-Theses plans are usually 1-2 year plans-Tactical planning translates broad strategic goals and plans into specific goals and plans relevant to a particular portion of the organization-tactical plans focus on the major actions a unit must take to fulfill its part of the strategic plan-Operational planning identifies the specific procedures and processes required at lower levels of the organization-these plans are usually less then a year and change often-To be Fully Effective, all levels of planning (strategic, tactical, and operational should align- they must be consistent, mutually supportive, and focused on achieving the common purpose and directionStrategic Planning Process-Strategic management involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategiesFirst, Establish a mission, vision, and goals-The first step is establishing a mission – a clear and concise expression of the organization’s basic purpose-the strategic vision points to the future; it provides a perspective on where the organization is headed and what it can becomeSecond, analyze external opportunities and threats- The analysis begins with an examination of the industry – industry profile, industrygrowth, industry forces, competitor’s, labor issues, macroeconomic conditions- Next, Stakeholders are examined – groups and individuals who affect and are affected by achievement of the organization’s mission, goals, and strategiesThird, analyze internal strengths and weakness-internal resource analysis has several components- financial analysis, HR assessment, marketing audit, operational analysis, and othersResource and Core Capabilities-Resources are inputs to production that can be accumulated over time to enhance the performance of a firmMQM CH 5 Strategic planning and decision making2 broad categories: Tangible and Intangible assets-a Core Capability is something a company does especially well relative to its competitorsBenchmarking- to assess and improve performance, companies use benchmarking – the process of assessing how well one company’s basic functions and skills compare with those of another company or set of companiesFourth, Conduct a SWOT analysis and formulate strategy-SWOT analysis: an assessment of the organization’s strengths, weaknesses, opportunities, and threats-Strength and weaknesses are internal-Opportunities and Threats are externalCorporate Strategy-Corporate Strategy identifies the set of businesses, markets, or industries in whichthe organization competes and the distribution of resources among those businesses- 4 basic alternatives for a corporate strategy range from very specialized to highly divers:1. Concentration- focusing on a single business competing in a single industry2. Vertical integration – expanding the organization’s domain into supply channels or to distributors, generally to eliminate uncertainties and reduce costs associated with suppliers or distributors3. Related diversification – moving into new businesses related to the company’s original core business4. Unrelated diversification – expansion into unrelated businesses, typicallyto minimize risks due to market fluctuations in one industryBusiness Strategy-Business Strategy defines the major actions by which an organization builds and strengthens its competitive position in the marketplace-businesses using a low-cost strategy try to be efficient and offer a standard, no-frills product-A differentiation strategy, a company tries to be unique in its industry or market segment along dimensions that customers valueFunctional Strategy-Functional strategies are