Chapter 5 Planning - Lecture notes 5 PDF

Preview

Summary

Instructor Louis Myers...

Description

Chapter 5: Planning Tuesday, February 27, 2018

12:52 PM

Planning - Is setting goals and deciding how to achieve them - Is coping with uncertainty by formulating future courses of action to achieve specified results Plan - Is a document that outlines how goals are going to be met Business Plan - A document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success Business Model - Should describe the basic operations of the business - Outlines the needs the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses - Description of the industry the firm is entering Strategy - Aka strategic plan - Sets long-term goals and direction for an organization Strategic management - A process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals - Involves managers from all parts of the org (top, middle, first-line) **Planning includes strategic, tactical, operational

Wh

l

i

d t t i

ti

t

t?

Why are planning and strategic management important? 1. Provide direction and momentum 2. Encourage new ideas 3. Develop a sustainable competitive advantage VRIO - Is a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization

-

An organization's mission is its purpose or reason for being - Mission statement- expresses the purpose of the organization A Vision - is a long-term goal describing "what" an organization wants to become. - It is a clear sense of the future and the actions needed to get there - Vision Statement - expresses what the organization should become, where it wants to go strategically Values Statement: - Aka core values statement - Expresses what the company stands for, its core priorities, the values its employees embody,

-

what its products contribute to the world Becomes the deeply ingrained principle and fabric that guide employee behavior, decisions, actions

THREE TYPES OF PLANNING FOR THREE LEVELS OF MANAGEMENT 1. Strategic planning - top management a. They determine what the org's long-term goals should be for the next 1-5 years with the resources they expect to have available 2. Tactical Planning - middle management a. They determine what contributions their departments or similar work units can make with their given resources during the next 6-24 months 3. Operational Planning - first-line management a. They determine how to accomplish specific tasks with available resources within the next 1-52 weeks

GOALS AND PLANS GOAL - Aka objective - A specific commitment to achieve a measurable result within a stated period of time

- May be long-term or short-term Long-Term goal - referred to as strategic goals - Span 1 to 5 years - Focus on achieving the strategies identified in a company's strategic plan Short term goal - Referred to as tactical or operational goals or plain goals - Span 12 months - Connected to strategic goals in a hierarchy known as a means-end chain Means-End Chain - Shows how goas are connected or linked across an organization **Goals should be SMART (specific, measurable, attainable, resultsoriented, with target dates) Operating plan = a plan that "breaks long-term output into short-term targets" or goals/ action plans Action Plans = defines the course of action need to achieve a stated goal TYPES OF PLANS 1. Standing plan a. Policy*** b. Procedure c. Rule 2. Single use plans a. Program b. Project ***

3.

Management by objectives (MBO) - Peter Drucker 1. Managers and employees jointly set objectives for the employee 2. Managers develop action plans 3. Managers and employees periodically review the employee's performance 4. Manager makes a performance appraisal and rewards the employee according to results - **the goal is to motivate rather than to control subordinates Cascading Goals: Making lower level goals align with top goals 1. Top management must be committed 2. The goals must be applied organization-wide 3. Goals must "cascade" i. Must be linked consistently down through the organization - Cascading goals is the process of ensuring that the strategic goals set at the top level align, or “cascade,” downward with more specific short-term goals at lower levels within an organization, including employees’ objectives and activities.

Importance of Deadlines - Would you wo all the course work if you didn't have deadlines? - Deadlines become a great motivator, both for you and for the people working for you The Planning/Control Cycle - Once you made plans, how do you stay in control? - Planning 1 M k th l

1. 2. 3. 4.

Make the plan Carry out the plan Control Control the direction by comparing results with the plan Control the direction by taking corrective action in two ways A) By correcting deviations in the plan being carried out B) By improving future plans...