2 - *TOPIC 2

PLANNING

An organization needs to have a goal to achieve.By having a goal, then the organization can plan how to achieve the goal.2 - *

PlanningThe act of determining/setting the organizations goals and the way for achieving them.PlanA blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals.

GoalsA desired future state that the organization attempts to realize.

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Setting goals starts with top managers. It begins with a mission statement.

Mission statementa broadly stated definition of the organizations basic business scope and operations that distinguishes it from similar type of organizations.

The purpose of mission statement.to define why a firm exists, provide strategic direction to the employees of the firm, and distinguish/differentiate the company from its competitors.

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to ensure that the organization is both effective and efficient in its activities.

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Sense of direction and purpose (road map)Organization knows its goal and how to achieve itPlanning will provide direction where you are goingPlanning will guide the organization to the missionFoundation for Effective Control SystemPlans developed can be used as a foundation in monitoring/controlling organizations performance

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Better CoordinationOrganization consists of multiple work groups, a plan will help define the responsibilities of each work groups & coordinate the activities.Focus on Forward ThinkingPlanning forces managers to think ahead and evaluate the threats & opportunities of an organization in future.

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2 - *A task can not be accomplished if themanager is not aware of:

Top-down planning A planning process which is done by the top management and passed down to lower level management to implement the plan.

Advantages:a) top management are the ones who can see the overall picture of the organization;b) planning done at top level is less expensive do not need to go through multiple levels of employees.c) to protect confidential information from lower level.

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Bottom-up planningA planning process which is done by the lower level management.

Advantages:a) enhance performance of lower level management/employeesb) lower level employees may provide better idea as they are the closest to the situation or customersc) encourage commitment from lower level employees

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Three types:-Strategic plansTactical plansOperational plans

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Strategic plans are the plans developed to achieve strategic goals.Strategic goals = long term goal/general goal of an organizationIs a general plan outlining decisions of resource allocation, priorities, and action steps necessary to reach strategic goals.Set by Board of Directors and top management.Have an extended time horizon (10 years).

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A process by which an organization makes decisions and takes actions to enhance its long-term performance.Strategic planning is the process by which an organization makes decisions and takes actions that affect its long-run performance.A strategic plan is the output of the strategic planning process. Strategic plans define both the markets in which the firm competes and the ways in which it competes in those markets.

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To move the organization from where it is to where it wants to be.

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Corporate Strategic PlanningBusiness Strategic PlanningFunctional Strategic Planning

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Decisions and actions that define the portfolio of business units that an organization maintains.Addresses the question What business should we be in?Options = whether to maintain existing business or to diversify.Objective is to develop a mix business units that meets the long-term growth and profitability goals of the organization.

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Relatively broad and general in nature.May extend as far as 5 to 10 years into the future.Formulated by the board of directors and top level executives.

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Focused plans that define how each business unit in the firms corporate portfolio will operate in its market arena.Addresses the question How do we compete in our existing lines of business?Objective is to develop and maintain a distinct competitive advantage that will lead to organizational success.

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Relatively more specific than the corporate strategy.Time horizon is 1 to 5 years.Formulated by the individuals who are most familiar with the operations of the business units, i.e. top level executives and managers.i.e. a manager of each business unit.

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Specifies the production, research and development, financial, human resource management, and marketing activities necessary to implement the organizations corporate and business strategies.Focuses on how things will get done.Addresses the question How do we implement our corporate and business strategies?

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Carried out by middle and lower level managers.More specific.Shorter time frame (1-2 years).

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A plan aimed at achieving tactical goals and developed to implement parts of strategic plan.Typically involve upper and middle management.Have a shorter time horizon and a more specific and concrete focus.Concerned more with getting things done than with deciding what to do.

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Focuses on carrying out tactical plans to achieve operational goals. Developed by middle and lower level managers.Have a short term focus, and narrow in scope.

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1. Standing plansServe as guideline and are designed to be used again and againPolicy general guidelines for decision making within the organization i.e. policy for sick leave, vacation leave, grade appeals.Procedures plan that specifies how to proceed in a specific situation that routinely arises i.e. procedure for requesting annual leave, ordering supplies, booking a class.Rules- detailed and specific regulation for action i.e. number of sick leave/annual leave an employee can take for a year, min grade for admission into a program

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2. Single Use PlanA one time plan specifically designed to meet the need of a unique situation i.e. build a new HeadquarterProgram plan that govern a comprehensive set of activities designed to accomplish a particular sets of goals i.e. introducing a new product line, opening a new facilityi.e. Program Anak Angkat consists of a set of activities, with a set of goals to achieve.Projects plan that direct the efforts of individuals or work groups toward the achievement of a specific goals less scope and complexity than programi.e. in Program Anak Angkat, Finance Unit is working toward achieving their own goal = get funding (one specific goal)Budget plan that specify how financial resources should be allocated i.e. 3Million allocation for a program

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Lack of commitmentLack of meaningful objectiveRely too much on experience Lack of management supportLack of clear delegation of authority

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Planning must not be left to chancePlanning must be organizedPlanning must be clear and definiteManager must participate in planning

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