1 Planning Chapter 5 Setting goals and deciding how to achieve them Coping with uncertainty by formatting future course of action to achieve specific results A plan is a blueprint for action that describes what you need to do to realize your goals a Strategic planning done by top managers b Tactical planning middle managers c Operation planning done by first line managers Planning and strategic management derive from an organization s mission and vision about itself Why not plan 1 Planning requires you to set aside the time to do it Planning means that you must involve the subordinates you manage to determine resources opportunities and goals During the process one 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 or information While you should not shoot from the hip when making decisions often you may have to make a plan that is perhaps only complete How Planning helps you 1 Helps you check on your progress In order to see how well work is going in an organization you must check your progress and have some expectations of what you re supposed to do 2 Helps you coordinate activities A plan defines the responsibilities of various departments and coordinates their achievement of a common goal 3 Helps you think ahead Services or products will probably reach maturity and sales will begin to fall thus it is important to look ahead beyond or present phase of work to try to be sure you ll be one of the quick rather than one of the dead 4 Helps us cope with uncertainty 5 Helps you reduce risk 2 4 basic strategy types 1 Defenders Let s stick with whatever we do best avoid other involvements Experts at producing and selling narrowly defined products or services Do not tend to seek opportunities outside their present markets Devote most of their attention to making refinements in their existing operations Ex slashing prices 2 Prospects Let s create our own opportunities not wait for them to happen Focus on developing new product or service and in seeking out new markets rather than waiting for things to happen Looking for new ways of doing things May suffer a loss of efficiency 3 Analyzers Let others take the risk of innovating and we ll imitate what works best Not trendsetters take a me too response to the world Let other organizations take the risks of product development and marketing and then imitate what seems to work best 4 Reactors Let s wait until a crisis then we ll react opposite of prospects make adjustments only when finally forced to by environmental pressures worst cases so incapable of acting fast enough that they suffer massive sales losses and may even be driven out of business Mission Vision Mission what is our reason for being Done by top management and board of directors Mission statement expresses the purpose of the organization Identifies the goods or services the organ provides or will prove Vision what do you want to become Long term goal describes what an organization wants to become Clear sense of the future and actions needed to get achieve the goals Vision statement where it wants to go strategically 3 Types of Planning 1 Strategic planning next 1 5 years The purpose of planning is to set a goal and then formulate an action plan Top managers determine what are the organization s long term goal should be for the 3 Requires visionary and directional thinking Should communicate general goals about growth and benefits but also ways to achieve them Pay attention to the environment outside the organization be future oriented deal with uncertainty and high competitive conditions 2 Tactical planning Middle management must determine what contributions their departments or similar work units can make with their given resources during the following 6 24 months Strategic priorities and policies are based down to middle managers who must implement tactical planning Supervise and coordinate activities of first line managers below make decisions without the base of clearly defined information procedures Set by top management First line management must determine how to accomplish specific tasks with available resources within the next 1 52 weeks Directed daily tasks of nonmanagerial personnel decisions often predictable following well defined set of routine procedures 3 Operational planning An objective specific commitment to achieve a measurable result within a stated period of Strategic set by and for top management and focuses on objectives for the organizations Tactical set by and for middle managers and focuses on the actions needed to achieve strategic goals Operational set by and for first time managers and are concerned with short term matters associated with realizing tactic goals Goals time SMART Goals 5 characteristics of a good goal Specific rather than vague Measurable whenever possible or quantifiable some way to measure the degree to which the goal has been reached Attainable should be both challenging and realistic Achievable with the scope of the time equipment and financial support available Results oriented they should support the organization s vision Target dates should specify deadline dates when they are to be attained Should allow enough time for lower level managers and employees to revamp their systems and work habits to give them a clear time frame in which they known what they expect to do 4 Action Plan Defines the course of action needed to achieve the stated goals ex marketing plan or sales plan Operating plan Typically for a one year period how you will conduct your business based on the action plans identifies clear targets ex revenues cash flow market share Two types of planning 1 Standing plans developed for activities that occur readily over a period of time a Policy standing plan that outlines the general response to a designated problem or b Procedure standard operating procedure standing plan that outlines the response to particular problems or circumstances c Rule standing plan that designates specific required action allows no room for 2 Single Use Plans plans developed for activities that are not likely to be repeated in the situation interruption future a Program single used plan encompassing a range of projects or activities b Project single used plan of less scope and complexity than a program Management by Objectives 1 Jointly Set objectives necessary to have back and forth negotiation to make the objectives practicable
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