MAN3025 Study Guide Test 2 Chapters 5 6 and 8 Ch 5 Planning The Foundation of Successful Management Planning previously defined as setting goals and deciding how to achieve them another definition Planning is coping with uncertainty by formulating future courses of action to achieve specified results Planning Difficult o You need to devote time to do it o It takes discipline to do it then follow it o You may not have a lot of information o Once you do it you need to maintain and modify it How Planning Helps You o Planning helps you think ahead o Planning helps you coordinate activities o Planning helps you check your progress o Planning helps you cope with uncertainty How Organizations Respond to Uncertainty o Defenders are expert at producing and selling narrowly defined products and services o Prospectors focus on change developing and seeking new markets or services rather than waiting for things to happen o Analyzers let the prospectors take the risks of product development and marketing and then imitate what seems to work best o Reactors make adjustments only when finally forced to by outside pressures Planning and Strategic Management o Establish the organization s mission and vision o Formulate the grand strategy o Formulate the strategic plans then tactical plans and then operational plans o Implement the strategic plans o Control Adjust the strategy Making Plans o Vision Statement What do we want to become o Mission Statement What is our reason for being o Strategic Planning Done by top managers for the next 5 7 years Goals o Tactical Planning Done by middle managers for the next 12 24 months Goals Action plans Action plans o Operat ional Planning Done by first line managers for the next 1 52 weeks Goals Action Plans Mission Vision Statements o Mission Statements expresses the purpose of the organization o Vision Statement expresses what the organization should become where it wants to go strategically 3 Types of Planning for 3 Levels of Management o Strategic planning top managers decide what the organization s long term goals should be for the next 5 7 years with the resources they expect to have available o Tactical planning middle managers decide what contributions their departments or similar work units can make with their given resources during the next 12 24 months o Operational planning first line managers determine how to accomplish specific tasks with available resources within the next 1 52 weeks Three Levels of Management Three Types of Planning o Top Managers Chief executive officer president vice president general managers division heads Strategic Planning 5 7 Years o Middle Managers Functional managers product line managers department managers Tactical Planning 12 24 Months o First line Managers Unit manager team leaders first line supervisors Operational Planning 1 52 Weeks Types of Goals organization as a whole achieve strategic goals o Strategic Goals are set by and for top management and focus on objectives for the o Tactical Goals are set by and for middle managers and focus on the actions needed to o Operational Goals are set by and for first line managers and are concerned with short term matters associated with realizing tactical goals Setting SMART Goals and Action Plans o S specific o M Measurable o A Attainable o R Results Oriented o T Target Dates Relationship Between Goal Difficulty and Performance o Performance of committed individuals with adequate ability o Performance of committed individuals who are working at capacity o Performance of individuals who lack commitment to high goals The Planning Control Cycle o The Two Planning Steps 1 Make the Plan 2 Carry out the Plan o The Two Control Steps 3 Control the direction by comparing the results with the plan 4 Take Corrective Actions By correcting deviations in the plan being carried out return to Step 2 or By improving future plans go to Step 1 to start over Management By Objectives o Is a four step process in which Managers and employees jointly set objectives for the employee Managers develop action plans Managers and employees periodically review the employee s performance The manager makes a performance appraisal and rewards the employee according to the results o If MBO is to be successful three things must occur 1 Top management must be committed o Commitment translates to productivity gains 2 It must be applied organization wide o To be successful MBO must be applied in all divisions and departments 3 Objectives must cascade o MBO works by cascading objectives down through the organization o Three Examples of Objectives Used in MBO Improvement objective Personal development objective 2008 Sales by objectives quarter Increase sport utility sales by 10 by 10 1 2008 attend five days of leadership training by YE meet the increased sales goals 5 increase over prior The Project Life Cycle o Stage 1 Definition state the problem look at assumptions and risks identify goals and objectives determine budget and schedule o Stage 2 Planning identify the details facilities equipment people duties schedule coordination o Stage 3 Execution the work stage establish the management style control tools monitor progress review schedule issue change orders prepare status o Stage 4 Closing acceptance by the client deliverables training final report Good Planning Makes you Look Smart o It is a point to deviate from o Quicker at dealing with unforeseen events o Critical Path Method Quantitative Management Using CPM to Build a House o Foundation o Frame o Roof o Plumbing o Electrical Some things have to follow each other Some things happen at the same time o Key Steps to CPM List activities Estimate activity completion time Draw network diagram based on dependencies Identify critical path Ensure critical path steps remain on schedule Ch 6 Strategic Management The Dynamics of Strategic Planning The Strategic Management Process Establishing the Grand Strategy Formulating Strategy Execution o Some management tools and techniques come and go in popularity but other management strategies are more long term Specifically In an era of management fads strategic planning is still tops A manager s most valuable character trait is to be willing to make large painful decisions to suddenly alter strategy o For Discussion It s important whatever management technique might be in vogue not to overlook the truth of what s going on the organization Consider how managers can develop this type of mindset o A large scale action
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