Chptr 6 Planning

7/29/2019 Chptr 6 Planning

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The Manager as a Planner

also known as:

Establishing Organizational

goals & developing Strategy

6


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The Planning Process

Planning is the process used by managers toidentify and select goals and courses of actionfor the organization.

The organizational plan that results from theplanning process details the goals to beattained.

The pattern of decisions managers take toreach these goals is the organizations strategy.


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3 Stages of the Planning Process

Determining the Organizations

mission and goals(Define the business)

Strategy formulation(Analyze current situation &

develop strategies)

Strategy Implementation(Allocate resources & responsibilities

to achieve strategies)


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Levels of Planning

Strategy

Implementation

Corporate

mission & goals

Divisional

goals

Functional

goals

Corporate-

level strategy

Business-

level strategy

Functional-

level strategy

Design of

Corporate

Structure

Control

Design of

Business-unit

Structure

Control

Design of

Functional

Structure

Control

Goal

Setting

Strategy

Formulation

Corporate-level Plan

Business-level Plan

Functionallevel Plan

See

Figure 6.2


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Goals should be :

1. Challenging

2. Attainable

3. Specific & measurable4. Time limited

5. Relevant

The other aspects of goals are thecommitment levels and work behaviour

while attaining them


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Characteristics of Plans

Time horizon:how far ahead the plan applies.

Long-term (strategic) plans are usually 3 to 5

years or more.

Intermediate-term (tactical) plans are 1 to 3 years.

Short-term (operational/functional) plans are lessthan 1 year.


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Types of Plans

Standing plans:for programmed decisions. Managers develop policies, rules, and standard

operating procedures (SOP).

Policies are general guides to action. Rules are a specific guide to action.

Single-use plans:developed for a one-time,

nonprogrammed issue: Programs:integrated plans achieving specific goals.

Project:specific action plans to complete programs.


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Who Plans?

Corporate level planningis done by topmanagers.

Business and functional planningis done bydivisional and functional managers.


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Scenario Planning

Scenario Planning:generates several forecastsof different future conditions and analyzeshow to effectively respond to them.

Planning seeks to prepare for the future, but thefuture is unknown.

By generating multiple possible futures we can

see how our plans might work in each.

Allows the firm to prepare for possible surprises.


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Mission StatementsCompany

Compaq

AT&T

Mission Statement

Compaq, along with our partners, will

deliver compelling products and services of

the highest quality that will transformcomputing into an intuitive experience that

extends human capability on all planes --

communication, education, work, and play.

We are dedicated to being the worlds best

at bringing people together -- giving them

easy access to each other and to the

information and services they want and

need -- anytime, anywhere.


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MBO: Management by Objectives

MBO evaluates workers by attainment of specificobjectives.

Goals are set at each level of the firm.

Goal setting is participatory with manager ANDworker.

Reviews held looking at progress toward goals.

Pay raises and promotions are tied to goal

attainment.

Teams are also measured in this way with goals

and performance measured for the team.


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MBO- 2:

MBO uses 6 steps:

1. Develop overall Org. goals2. Establish specific goals at all levels

3. Formulate action plans

4. Implement & maintain self control5. Review progress periodically

6. Appraise performance


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Strategy Formulation

Managers analyze the current situation todevelop strategies achieving the mission.

SWOTanalysis: a planning to identify:

Organizational Strengths and Weaknesses.

Strengths: manufacturing ability, marketing skills.

Weaknesses: high labor turnover, weak financials.

Environmental Opportunities and Threats. Opportunities: new markets.

Threats: economic recession, competitors


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Planning & Strategy Formulation

Corporate-level strategydevelop a plan of action

maximizing long-run value

Business-level strategya plan of action to take

advantage of opportunities

and minimize threats

Functional-level strategya plan of action improving

departments ability to

create value

SWOT analysis

identifies strengths &weaknesses inside the

firm and opportunities

& threats in the

environment.


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The Five Forces Model

Substitute

Products

Rivalry

Among

Organizations

Potential

for Entry

Power of

SupplierPower of

Buyer


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The Five Forces

1. Level of Rivalry in an industry: how intense is thecurrent competition with competitors?

Increased competition results in lower profits.

2. Potential for entry: how easy is it for new firms to enter

the industry?Easy entry leads to lower prices and profits.

3. Power of Suppliers: If there are only a few suppliers ofimportant items, supply costs rise.

4. Power of Buyers: If there are only a few, large buyers,they can bargain down prices.

5. Substitutes: More available substitutes tend to drivedown prices and profits.

Chptr 6 Planning

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