Concepts of Management Study GuideI. CH 5 Planning1. All about coping with uncertainty, that is PLANNING->REDUCES UNCERTAINTY ABOUT FUTURE2. Planning- “coping with uncertainty by formulating future courses of action; with GOALS and ACTIONS!”3. Know this sequence of events makes sense logically(1) Establish Vision Statement(2) Establish Mission Statement(3) Formulate Grand Strategy(4) Implement plans(5) Control(6) Visibly Mr. Gronk’s In Control (use to help remember order/ football fans im talking bout tight end for new england patriots) 4. Defenders-limit what they do and focus on certain set of customers/market no expanding, “produce narrowly defined products”5. Prospectors-first into a market “produce new products”6. Analyzers-second into a market watch what prospectors do they are going to imitate them, imitate thing that look successful minimize risk by being seconds “let others take product development risk and use their info!”7. Reactors- react as situation aries, no game-plan bad idea/ not best one8. 3 levels of plans a) strategic(top manager 1-5 years out up to 10 years) b) tactical (middle manager 6-24 month not as far as top) c) operational(first level managers a week month but certainly less than a year!)9. 1st thing do when plan process is have a vision statement-long term of what we wanna become “what we wanna be when we grow up-kind of statement” very conciseunderstandable CEO should be able to ask everyone and everyone should know it10.Mission statement-gives more detail to the vision statement its going to have actions longer than vision more detail11.Know the time frames that each planning covers!12.SMART goals13.S-specific exactly what accomplish14.M-measure15.A-attainable16.R-results oriented17.T-target date attached18.If a goal is too easy everyone do it and done no accomplish to hard people will view as unattainable performance stops has to be challenging yet attainable find happy medium19.Standing plan- going to occur frequently every time that activity a) The fire emergency plan where same action is taken with the fire every time 20.Single use plan- created for a particular project21.Management by Objective MBO 4 stepsa) 1)jointly set objectives with employees they have sense of ownership to accomplish itb) 2)develop action planc) 3)periodically review performanced) 4)give performance appraisal and rewards if any- @ end give em formal proposal and rating22.OBJECTIVES:Top management must be committed must cascade down throughout organizations; “must be applied to entire organization”23.The Planning/Control Cyclea) Make planb) Execute planc) Control direction actual results versus plan resultsd) Take corrective actionsB.C.D.II. CH 6 HOW TO BUILD STRATEGY1. Strategic Positioning- want to position self instead of attacking one another, everyone goal is to position so not direct competitors; this leads to sustainability everyone in their own niche2. Figure 6-1 Process(1) Vision(2) Mission(3) Grand Strategy (w. Environmental scanning)(4) Implement(5) Control(6) (& feedback look looking at possibly revising any of actions based on feedback)(7) ***Remember Mnemonic from Earlier Visibly Mr. Gronk’s In Control3. Grand strategy- couple basic decisions gather lots of DATA4. 1st decision want to make with grand strategy?a) Grow?-> Growth Strategy(1) Involves expanding(2) Example: expand into new products/services OR increase promotionb) Flat? same market share same profit objective (stability)(1) Example: no change strategy noticed that maybe too fast growth leads to problems with ordersc) Shrink?-retract(defensive)(1) Example: reduce costs, declare bankruptcy5. Then based on the grand strategy make plans and actions based on if you want to grow, stabilize, or shrink6.7. Competitive Intelligence- gathering as much information regarding your competitors as you possible can from all sources(1) where good where weak where their niche8. Next do some Environmental Scanning9. SWOT analysis (Strength Weakness Opportunity Threat)10.SW= are of the internal environment **11.OT=external environment **w/in industry economy political arena12.13.Forecasting: Predicting the Future PROJECT FORWARD by using what information you have gathered you can make educated inferences 14.Trend analysis: Based on past events and scenarios that you have faced as a manager/CEO decide where this might apply and carry it out into the future(1) Example: maybe you notice that sales of you palm pilot are decreasing rapidly the past few quarters, but your phone sales have tripled maybe trend analysis would say we should focus on smart phones15.Contingency planning- creating other scenarios to the plans that come from the trend analysis like having a plan B, plan C, and maybe even plan D(1) Example: based on the last example if we were assuming that smart phones were the direction we should go maybe have a back up plan to launch or further do some research and development on tablets or touch screens just in case the smart phone thing doesnt work out16.17.Porters 5 forces 18.What do they tell you?a) When you are READY TO MOVE TO INDUSTRY(how safe is it?19.20.#1 The threat new entrants (barriers of entry)(1) How easy is it for someone to get into your industry? Either really easy like a lemonade stand doesnt take much maybe some lemonade powder and water and a table, but profits arent very high maybe 25cents a cup; or can be really hard to get into industry would be like the car industry not very easy to not only make a car that is appealing but meets all the safety and green regulations of the govt or else everyone would be doing it, profits usually higher!!21.#2 bargain power of buyers(1) Selling to just one person they can refuse your price and you cant do much other than comply and make LESS money because they are your only customer! Vice versa you have lots of buyers/customers you can say have a nice day and keep your price the same22.#3 bargain power of supply(1) Same concept as power of buyers but if you get your materials from one manufacture you are at the mercy of their prices if you have a bunch you can say no thanks ill go with manufacture B23.#4 threat of substitutes prod or service(1) Example: if you are in the palm pilot business and the iPhone 5 gets released watch your sales go to $0.24.#5 rivalry among comp. (1) If nots of rivalry then everyone is going to cut costs to get the customer therefore everyone but the customer looses because all the competitors are
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