Chapter 5 Planning Management Process Planning Organizing Leading Controlling Planning Setting goals and deciding how to achieve them Or Coping with uncertainty by formulating future courses of action to achieve specific results Plan for an organization Establish Organization s mission and vision Formulate the grand strategy Formulate the strategic plans then tactical and operational plans Implement the strategic plans 1 2 3 4 5 Control the strategy Why is it difficult A Requires you to set aside time to do it B Requires discipline to do an follow the plan C May be a lack of information about products competitors etc D Requires maintenance and modifications What are its benefits A Helps you check on your progress a Staying on par B Helps you coordinate activities a Defines responsibilities of departments keeping business organized C Helps you think ahead a Look ahead for changes product life cycle D Helps you cope with uncertainty Responding to Uncertainty Four Basic Strategies Defender Prospectors Analyzers Reactors A Defenders B Prospectors C Analyzers D Reactors Sticking to what you do best Experts at producing selling narrowly defined products or services a b c Getting back to the core business basics d Example Harley Davidson Brooks Brothers Create our own opportunities not wait for them to happen a b Focus of developing new products or services and in seeking out new markets c Not waiting for things to happen like gold miners prospecting for opportunity a b c Let others take risks Imitate what works Let organizations take risks of development and marketing Improve on what works best a Wait until there is a crisis and then react b Make adjustments only when forced by environmental pressures Adaptive Cycle Cycling through three kinds of business problems Entrepreneurial Selecting and making adjustments of products Engineering Producing and Delivering products 1 2 3 Administrative Establish Roles Relationships and Organizational Processes Fundamentals of Planning Making a plan In order Mission Statement What Who Vision Statement Why Strategic Planning Top Managers 5 7 years Tactical Planning Middle Managers 12 24 months Operational Planning First line Managers 1 52 weeks Mission Purpose or reason for being Mission Statement Expresses the purpose of an organization and how it will realize its vision Vision long term goal describing what an organization wants to become Clear sense of the future What is our reason for being And the actions needed to get there Vision Statement Expresses what an organization should become and where it wants to go strategically What do we want to become Three Types of Planning Strategic Tactical Operational Long Term Goals for next 5 7 years Top management CEO Pres VP division heads Based on available resources 1 Strategic a b c Tactical 2 3 Operational Goals Objectives a Middle Managers Department managers product line managers Functional managers i Implement plans of Top Management oversee first line managers b Determine what contributions their department or work unit can make c Over next 12 24 Months a First Line Managers unit managers team leaders i Direct day to day tasks of non managerial personnel b How to accomplish specific tasks with available resources c Next 1 52 weeks A specific commitment to achieve a measurable result within a stated period of time Means End chain Accomplishment of lower level goals operational lead to the accomplishment of higher level goals Tactical and Strategic Strategic Goals Set by and for Top managers and focus on objectives of whole organization Tactical Goals Set by middle managers and focus on actions needed to achieve strategic goals Operational Goals Set by and for first line managers concerned with short term matters associated with realizing tactical goals Each goal followed by an ACTION PLAN defines course of action needed to achieve a stated goal Ex marketing or sales plan OPERATING PLAN is typically designed for 1 year and defines how you will conduct business based on action plan Sets target revenue cash flow and market share Types of Plans 1 Standing Plans a Developed for activities that occur repeatedly b Policy i Outlines the general response to a problem or situation ii This workplace does not condone swearing c Procedure d Rule i Outlines the response to particular problems or circumstances ii Ex How a hamburger is made at McDonald s i Designates a specific Required action ii Single Use Plans No Smoking in the building 2 a Developed for activities that are not likely to be repeated b Program i Encompasses a range of projects or activities ii US space program has a range of projects c Project i ii The Space Shuttle Discovery is one project in the US space program Less scope and complexity than a Program MBO Management by Objectives 1 Managers and employees jointly set objectives for employee 2 Managers develop action plans 3 Managers and employees periodically review employee s performance 4 The Manager makes a performance appraisal and rewards the employee according to results Motivate rather than control To be successful Top management must be committed It must be applied organization wide 1 2 3 Objectives must cascade a Objectives are structured in a unified hierarchy becoming more specific at lower levels Three Examples 1 2 3 Improvement objective Increasing sales Personal Development objective attending leadership training Sales by objectives meet increase sales goal SMART Goals Specific 1 2 Measurable 3 Attainable 4 Results Oriented 5 Target Dates Planning Control Cycle It has two planning 1 and 2 and two controlling fixing 3 and 4 steps 1 Make a Plan 2 Carry out the plan 3 Control the direction by comparing the results with the plan 4 Control the direction in two ways a b Correcting deviations in the plan return to step 2 Improving future plans return to step 1 Project Life Cycle 1 Definition State the problem Look at Assumptions and risks identify goals and objectives 2 3 determine budget and schedule Planning Identify the details equipment people duties schedule coordination Execution The work stage Establish management style control tools monitor progress prepare status 4 Closing Acceptance by the client Product training final report Chapter 6 Strategic Management Five Questions Five Sections Am I really managing if I don t have a strategy What s the five step recipe for the strategic management process How can SWOT and forecasting help me to establish my strategy How can two
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