Chapter 5 Management process involves planning organization leading and controlling I Planning setting goals and deciding how to achieve them coping with uncertainty by formulating future courses of action to achieve specified results a Making a blue print b Used along with strategic management i Involves managers from all parts top middle and first line Remember Strategic Planning Top Managers Tactical Planning Middle Managers Operational Planning First line Managers Establish the organization s mission vision Formulate the grand strategy Formulate strategic then tactical oper Implement strategic plans Control the strategy 1 Planning requires you to set aside time to do it 2 You may have to make decisions without a lot of time to plan a go with what you got complete plan 3 Planning helps you check your progress 4 Planning helps you coordinate activities 5 Planning helps you think ahead 6 Planning helps you deal with uncertainty How Organizations Respond to Uncertainty Raymond E Miles Charles C Snow 1 Defenders Stick with what you do best avoid other involvements a Experts at producing and selling narrowly defined products or services Example Walmart Macy s 2 Prospectors Create own opportunities not wait for them to happen a Described as aggressive focus on developing new products or services and in seeking out new markets rather than waiting for things to happen 3 Analyzers Let others take the risks of innovation and we will initiate what works best b May suffer loss of efficiency Example Gap Apple a Imitators me too response Example Microsoft reactive Example Kmart Sears The Adaptive Cycle 4 Reactors Let s wait until there s a crisis then we ll react a Make adjustments only when finally forced to by environmental pressures Passive and Portrays business as a 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 The Big Picture A mission an organization that has a purpose A vision a manager that has an idea of where they want the organization to go A mission statement answers the question What is our reason for being and a vision statement answers the question What do we want to become a Determining is the responsibility of the top manager as well as the board of directors 1 Mission Statement 2 Vision Statement a A long term goal top managers responsible Goals SMART Goals Action Plans Operating Plans A goal also known as an objective a specific commitment to achieve a measureable result within a stated period of time Planning goals are arranged in a hierarchy known as means end chain o In the chain of management the accomplishment of low level goals is the means leading to the accomplishment of high level goals or ends 1 Strategic goals set by and for top management and focus on objectives for the organization as a whole achieve strategic goals 2 Tactical goals set by and for middle management and focus on the actions needed to 3 Operational goals set by and for first line managers and are concerned with short term matters associated with realizing tactical goals SMART Goals S Specific M Measureable quantifiable A Attainable realistic R Results oriented T Target dates Deadline dates Start with the word To follow up with action oriented verbs Complete Acquire Increase Relating to ATTAINABLE Action Plan Operating Plan stated goal Goals should be followed by an action plan defining the course of action needed to achieve the An operating plan typically designed for a 1 year period defines how you will conduct your business based of the action plan indicating clear targets such as revenues cash flows and market share Types of Plans Standing Plans Single Use Plans Standing o Policy Example This work place does not condone swearing o Procedure Example White Castle specifies exactly how a hamburger should be dressed including the order that which the condiments are applied o Rule Example No smoking allowed anywhere in building Single Use o Program Example The U S government space program had several projects including the Challenger and the Hubble Telescope o Project Example The space shuttle Discovery was one project in the governments space program What Is MBO Management by objective a four step process The purpose of MBO is to motivate rather than control subordinates 1 Jointly set objectives for the employees a Impels people to set more difficult goals 2 Managers develop action plans a Once set managers each level should prepare an action plan for attainment 3 Managers and employees periodically review the employees performance a Managers should give employees feedback and objectives should be updated revised as necessary 4 Manager makes a performance appraisal and rewards employee according to results a the end of 6 or 12 months Deal with results Cascading Objectives MBO from the Top Down For MBO to be successful three things have to happen 1 Top Management Must Be Committed 2 It Must Be Applied Organizationwide 3 Objectives Must Cascade a Cascading down objectives are structured in a unified hierarchy becoming more specific at lower levels of the organization b Top managers set general organizational objectives translated to divisional objectives translated to departmental objectives ending in individual objectives set by each employee Importance of Deadlines help you ignore extraneous matters Planning Control Cycle Exists for each level of planning strategic tactical and operational The corrective action in step 4 of the cycle o Can get a project back on track before its too late o Or if its too late can provide data for improving future plans 1 Make the plan 2 Carry out the plan 3 Control the direction by comparing results with the plan 4 Control the direction by taking corrective action in two ways a By correcting deviations in the plan being carries out b Or by improving future plans Chapter 6 Business Plan a document that outlines a proposed firm s goals the strategy for achieving them and the standards for measuring success Embodies a firm s strategy Strategy guess A large scale action plan that sets the direction for an organization represents an educated Because of fast changing conditions strategy isn t something that can be decided on just once it requires updating and revision from time to time Example Find out what customers want then provide
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