MAN3025 Exam 2 Study Guide Chapter 5 Planning The Foundation of Successful Management Section 5 1 Planning Uncertainty Major Question How do I tend to deal with uncertainty and how can planning help Planning was previously defined as setting goals and deciding how to achieve them o Another definition Planning is coping with uncertainty by formulating future courses of action to achieve specified results When you make a pan you make a blueprint for action that describes what you need to do to realize your goals Planning Strategic Management o Planning is used in conjunction with strategic management o Strategic management is a process that involves managers from all parts of the organization top managers middle managers and first line managers in the formulation implementation and execution of strategies and strategic goals to advance the purposes of the organization Thus planning covers not only strategic planning done by top managers but also tactical planning done by middle managers and operational planning done by first line managers o Planning and strategic management derive from an organization s missions and vision about itself I Establish the organization s mission and vision II Formulate the grand strategy III Formulate the strategic plans then the tactical and operational plans Implement the strategic plans IV V Control the strategy Why Not Plan o There are two cautions to be aware of 1 Planning requires you to set aside the time to do it Time starved managers may be quite resentful when superiors order them to prepare a 5 year plan for their work unit o Time for planning must be found Planning means that you must involve the subordinates you manage to determine resources opportunities and goals o During the process you may need to go outside the work unit for information about products competitors markets and the like 2 You may have to make some decisions without a lot of time to plan A plan need not be perfect to be executable While you shouldn t shoot from the hip in making decisions often you may have to go with what you ve got and make a decision based on a plan that is perhaps only three quarters complete How Planning Helps You Four Benefits 1 Planning helps you check on your progress Ex the preprinted score card that golfers use when playing 18 holes of golf isn t blank For each hole the card lists the standard number of strokes that a good player should take to hit the ball from the tee to the cup The scorecard is the plan for the game with objectives for each hole After you play the hole you write down your own score in a blank space At the end of the 18 holes you add all your scores to see how you performed compared with the standard for the course Like golfers managers need to have some expectations of what you re supposed to do in other words a plan 2 Planning helps you coordinate activities The right hand doesn t know what the left hand is doing A plan defines the responsibilities of various departments and coordinates their activities for the achievement of common goals such as at minimum making an organization not look confused and disorganized 3 Planning helps you think ahead Services or products with which you re engaged will probably at some point reach maturity and sales will begin to falter Thus you need to look ahead beyond your present phase of work to try to be sure you ll be one of the quick rather than one of the dead 4 Above all planning helps you cope with uncertainty Trying to plan for unpleasant contingencies is necessary and planning helps you deal with it How Organizations Respond to Uncertainty o Four Basic Strategy Types Scholars Raymond E Miles and Charles C Snow suggest that organizations adopt one of four approaches when responding to uncertainty in their environment 1 Defenders Let s Stick with What We Do Best Avoid Other Involvements a Whenever you hear an organization s leader say that We re sticking with the basics or We re getting back to our core business that s the hallmark of a Defender organization b Defenders are expert at producing and selling narrowly defined products or services i Often they are old line successful enterprises such as Macy s and JCPenny ii They do not tend to seek opportunities outside their present markets iii They devote most of their attention to making refinements in their existing operations such as slashing prices 2 Prospectors Let s Create Our Own Opportunities Not Wait for Them to Happen a A company described as aggressive is often a Prospector organization b Prospectors focus on developing new products or services and in seeking out new markets rather than waiting for things to happen i The continual product and market innovation has a price Such companies may suffer a loss of efficiency Nevertheless their focus on change can put fear in the hearts of competitors c An example of a Prospector company is Gap which announced it would look for new sales by expanding abroad 3 Analyzers Let Others Take the Risks of Innovating and We ll Imitate What Works Best a Analyzers take a me too response to the world b Analyzers let other organizations take the risks of product development and marketing and then imitate or perhaps slightly improve on what seems to work best i For years Microsoft has been accused of taking this approach 4 Reactors Let s Wait Until There s a Crisis Then We ll React a Whereas the Prospector is aggressive and proactive the Reactor is the opposite passive and reactive b Reactors make adjustments only when finally forced to by environmental pressures i In the worst cases they are so incapable of responding fast enough that they suffer massive sales losses and are even driven out of business Ex Kmart failed to respond to Walmart s development of its distribution and inventory management competencies resulting in stalled growth and significant reduction in market share o The Adaptive Cycle Miles and Snow also introduced the idea of the adaptive cycle which portrays businesses as continuously cycling through decisions about three kinds of business problems 1 Entrepreneurial selecting and making adjustments of products and markets 2 Engineering producing and delivering the products 3 Administrative establishing roles relationships and organizational processes Thus a business that makes decisions in the entrepreneurial area that take it in the direction of being a Prospector will in a short time also begin making Prospector oriented decisions in the engineering area then the administrative
View Full Document
Unlocking...