9 - 1 ©2006 Prentice Hall, Inc. Taxation of Corporations Chapter 9.
© Prentice Hall, 2002 9 - 1 Modern Management 9 th edition.
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Transcript of © Prentice Hall, 2002 9 - 1 Modern Management 9 th edition.
© Prentice Hall, 2002 9 - 1
Modern Management9th edition
.
© Prentice Hall, 2002 9 - 2
Objectives
• A complete definition of a plan
• Insights regarding various dimensions of plans
• An understanding of various types of plans
• Insights into why plans fail
• A knowledge of various planning areas within an organization
• A definition of forecasting
• An ability to see the advantages and disadvantages of various methods of sales forecasting
• A definition of scheduling
• An understanding of Gantt charts and PERT.
© Prentice Hall, 2002 9 - 3
PLANS: A DEFINITION
Dimensions of Plans
Repetitiveness
Time
Scope
Level
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© Prentice Hall, 2002 9 - 4
PLANS: A DEFINITION
Figure 9.1Four major dimensions to consider when developing a plan
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© Prentice Hall, 2002 9 - 5
PLANS: A DEFINITION
Types of Plans
Standing Plans: Policies, Procedures, and Rules
Single-Use Plans: Programs and Budgets
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© Prentice Hall, 2002 9 - 6
PLANS: A DEFINITION
Figure 9.2Standing plans and single-use plans
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© Prentice Hall, 2002 9 - 7
PLANS: A DEFINITION
Figure 9.3A successful standing plan program with
mutually supportive policies, procedures, and rules
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© Prentice Hall, 2002 9 - 8
PLANS: A DEFINITION
Why Plans Fail1. Corporate planning is not integrated into the total management system
2. There is a lack of understanding of the different steps of the planning process
3. Management at different levels has not properly contributed to planning activities
4. Responsibility for planning is wrongly vested solely in the planning department
5. Management expects that plans developed will be realized with little effort
6. In starting formal planning, too much is attempted at once
7. Management fails to operate by the plan
8. Financial projections are confused with planning
9. Inadequate inputs are used in planning
10. Management fails to grasp the overall planning process
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© Prentice Hall, 2002 9 - 9
PLANS: A DEFINITION
Planning Areas: Input Planning
Plant Facilities PlanningSite selection
1. Deciding on a set of variables critical to obtaining an appropriate site2. Assigning each of these variables a weight reflecting its relative importance3. Ranking alternative sites according to how they reflect these different variables
Human Resource PlanningQuestions for personnel planners
1. What types of people does the organization need to reach its objectives?2. How many of each type are needed?3. What steps should the organization take to recruit and select such people?4. Can present employees be further trained to fill future needed positions?5. At what rate are employees being lost to other organizations?
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© Prentice Hall, 2002 9 - 10
PLANS: A DEFINITION
Table 9.1Major Areas of Consideration When Selecting a Plant Site
and Sample Exploratory Questions to Be AskedMajor Areas Sample Questions
ProfitMarket Location Where are our customers in relation to the site?Competition What competitive situation exists at the site?
Operating costsSuppliers Are materials available near the site at reasonable cost?Utilities What are utility rates at the site? Are utilities available in sufficient amounts?Wages What wage rates are paid by comparable organizations near the site?Taxes What are tax rates on income, sales, property, and so on for the site?
Investment costsLand/development How expensive are land and construction at the site?
OthersTransportation Are airlines, railroads, highways, and so on accessible from the site?LawsWhat laws related to zoning, pollution, and so on will influence operations if the site is chosen?Labor Does an adequate labor supply exist around the site?Unionization What is the degree of unionization in the site area?Living conditions Are housing, schools, and so on around the site appropriate?Community relations Does the community support the organization’s moving into the area?
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© Prentice Hall, 2002 9 - 11
PLANS: A DEFINITION
Table 9.2 Results of Weighting Seven Site Variables for Six Countries
Sites MaximumCriteria Value Assigned Japan Chile Jamaica Australia Mexico France
Living conditions 100 70 40 45 50 60 60Accessibility 75 55 35 20 60 70 70Industrialization 60 40 50 55 35 35 30Labor availability 35 30 10 10 30 35 35Economics 35 15 15 15 15 25 25Community capability & attitude 30 25 20 10 15 25 15Effect on company reputation 35 25 20 10 15 25 15Total 370 260 190 165 220 275 250
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© Prentice Hall, 2002 9 - 12
PLANS: A DEFINITION
Figure 9.4The human resource planning process
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© Prentice Hall, 2002 9 - 13
PLANNING TOOLS
Forecasting
How Forecasting Works
Insect Control Services forecasts by attempting to do the following:
1. Establish relationships
2. Determine the impact government restrictions
3. Evaluate sales growth potential, profitability, resources required, and risks
4. Evaluate the potential for expansion of marketing efforts
5. Determine the likelihood of technological breakthroughs
Types of Forecasts.
© Prentice Hall, 2002 9 - 14
PLANNING TOOLS
Forecasting (con’t)Methods of Sales Forecasting
Jury of Executive Opinion Method1. Experts answer questions about area being forecasted
2. First summary of all the answers is prepared3. Experts get copies of first summary to modify as necessary4. Distribute second summary of these modifications to experts
Must justify opinions that deviate significantly from norm5. Distribute third summary of opinions and justifications to experts
Justification for all answers is now required6. Generate forecast from opinions and justifications from 5
Salesforce Estimation Method
Time Series Analysis MethodProduct Stages: introduction, growth, maturity, saturation, and
decline.
© Prentice Hall, 2002 9 - 15
PLANNING TOOLS
Figure 9.5Time series analysis method
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© Prentice Hall, 2002 9 - 16
PLANNING TOOLS
Figure 9.6Stages of the product life cycle
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© Prentice Hall, 2002 9 - 17
PLANNING TOOLS
Forecasting (con’t)
Evaluating Sales Forecasting Methods
Scheduling
Gantt Charts
Features
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© Prentice Hall, 2002 9 - 18
PLANNING TOOLS
Figure 9.7Completed Gantt chart
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© Prentice Hall, 2002 9 - 19
PLANNING TOOLS
Forecasting (con’t)Program Evaluation and Review Technique (PERT)
Defining PERTActivities
Events
Features
Critical Path
Steps in Designing a PERT Network1. List all the activities/events for project and their sequence
2. Determine time needed to complete each activity/event
3. Design PERT reflecting all information contained in 1 and 2
4. Identify the critical path.
© Prentice Hall, 2002 9 - 20
PLANNING TOOLS
Figure 9.8PERT network designed for building a house
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© Prentice Hall, 2002 9 - 21
Chapter Nine
Questions