MGMT – Planning

Operational and Strategic Planning
Identify opportunities and problems in area of responsibility
Set 1-3 objectives, expressed in numbers
Established deadlines
Make sure attainment is under control
What is Planning?
involves organization’s goals, making a overall strategy, and comprehensive set of plans to integrate into organizational work
Informal Planning
Nothing is written down
Little or no sharing of goals
Lacking in continuity
Formal Planning
Written down
Defines specific goals
Specific action programs exist to achieve goals
How do managers plan?
Establish goals
Desired outcomes
Represent the criteria against which actual work accomplishments can be measured
Outline how goals are going to be met
Types of Goals?
Financial & Strategic
Financial Goal
Goals related to financial performance
Strategic Goal
Goal related to other areas of performance
Types of Plans
Strategic Plan
Operational Plan
Long term Plan
Short term Plan
Specific Plan
Directional Plan
Strategic Plan
Apply to the entire organization
Establish organization’s overall goals
Operational Plan
Specify the details of how the overall goals are to be achieved
Short periods
Long term Plan
Plan of 5+ years
Short Term
Plan of <1 year
Specific Plan
clearly defined plan
Directional Plan
flexible plans that set out general
Approaches to Establishing Goals
Management By Objectives(MBO)
Management By Objectives(MBO)
specific goals are determined by employees and their managers
Rewards are given
Management By Objectives(MBO) consist of?
1. goal specificity
2. participative decision making
3. time period
4. performance feedback
Hierarchy of Strategies
1. Corporate Strategy
2. Business Strategy
3. Functional Strategy
Corporate Strategy
Identifies the set of businesses, markets, or industries in which the organization competes and distributes.
Business Strategy
Defines the major actions of a business in a particular industry or market.
Functional Strategy
Implements business strategy in each of the functional areas.
Strategic Management Process
1. Identifying the Organization’s Current Mission- purpose & goals
2. Analyzing the Environment strategies & trends
3. Identifying Opportunities and Threats
4. Identifying Strengths and Weaknesses
Corporate‐Level Strategy
Determines industry, direction and business units
Corporate‐Level Strategy ‐ Stability
Strategy w/ no significant change is proposed
organization’s performance is satisfactory
Corporate‐Level Strategy ‐ Growth
seeks to increase the level of the organization’s operations
Concentration – growth through orgs. own business ops.
Vertical Integration
Growing by:
Backwards – Become your own supplier
Forward – Become your own distributor
Horizontal Integration
Grow by combining with other organizations in the same industry
Needs approval by U.S. Federal Trade Commission
Corporate Analysis
used when corporate strategy involves a number of businesses
Framework for understanding diverse businesses
Micheal Porter
industry analysis based on five competitive forces
MP’s 5 Competitive forces
Threat of new entrants (FX by barriers to entry)
Threat of substitutes (FX by loyalty & cost)
power of buyers
Power of suppliers
Existing rivalry
MP’s 3 generic strategies
Cost Leadership – Lowest cost producer
Differentiation – Offer unique products
Focus – aims at cost advan. in a segment
Strategic Planning
Outward Looking
Usually Long‐term
Operational Planning
Inward Looking
GAP analysis
Comparison of the date generated during the performance audit with the strategic profile
Contingency Planning
Assumption that the ability to forecast the factors that will affect the organization is limited
Environmental Scanning
Monitoring environments:
Industry trends
2 parts of business modeling?
Strategic Profile (Perf. audit, GAP, Reality test, Contingency plan)
Action (Intergrating fuct. plans, Implementing, env. scanning)

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