Management Chapter 8

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participatory planning

Unlocks the motivational potential of goal-setting Management by objectives (MBO) promotes participation When participation is not possible, workers will respond positively if supervisory trust and support exist

5 Steps of the planning process

1. Define the desired objectives 2. Determine where the organization currently stands relative to the objectives 3. Develop views regarding future conditions 4. Analyze alternatives and make a plan 5. Implement the plan and evaluate results

Staff Planning

A "who", not a "how" - whether planning is done by a dedicated staff or by the businesses. A dedicated staff can provide expertise, but runs the risk of lack of participation by line management. The result can be unrealistic plans or feelings that plans are "imposed" on the business

Plan

A statement of action steps to be taken in order to accomplish the objectives

Qualitative forecasting uses expert opinions

Experts can offer views of trends in things like markets, demographics, regulations, underlying fundamentals of an industry, etc.

Types of Tactical Plans used to help to implement all or parts of the strategic plan:

Functional Plan & Operational Plan

To implement a plan, organizations set goals:

Goals must be well-managed and not create undue pressure which would cause individuals or groups to engage in illegal or unethical behavior

Types of plans used by Organizations: Focus (Strategic Plan)

Identifies the long-term direction for the organization based on its vision

Types of plans used by Organizations: Focus (Tactical Plan)

Identifies the steps to be taken to implement the strategic plan

Types of plans used by Organizations: time horizon

Long-term: three or more years into the future (usually strategic plans look three to five years ahead; some go as long as ten years) Short-term: typically cover one year or less

Planning

The process of setting objectives and determining how to accomplish them

Objectives and Goals

The specific results or desired outcomes that one intends to achieve

Operational Plans

identify short-term activities to implement tactical and strategic plans

participatory planning definition

includes the persons who will be affected by the plans and / or those who will implement them

Functional Plan

indicate how different operations within the organization will help accomplish the overall strategy. Ideally, all functions are aligned in their plans to achieve the strategy, e.g., the production plan has sufficient capacity to meet the sales targets of the marketing plan.

Scenario planning

o A long-term version of contingency planning o Identifying alternative future scenarios that are realistic and possible and making plans to deal with each > This would include "black swan" events - events which are very rare, but with enormous consequences. The COVID-19 pandemic is a "black swan" event o Increases organization's flexibility and preparation for future shocks

Forcasting

o Attempts to predict the future o Qualitative forecasting uses expert opinions o Quantitative forecasting uses mathematical models and statistical analysis of historical data and surveys o In reality, companies use both types of forecasting to develop plans

Contingency planning

o Identifies alternative courses of action to take when things go wrong or deviate from the assumptions on which the plan was built o Attempt to anticipate changing conditions o Contain trigger points to indicate when to change to alternative plans - see lecture slide for example.

Functional Plan Example

o Production - work methods & technologies o Financial - sources of funds, capital investment o Facilities - physical space & layouts o Logistics - supply chain, resource inputs o Marketing - selling, distributing goods & services o Human resource - attracting/retaining a talented workforce

Benchmarking

o Use of external and internal comparisons to plan for future improvements o Adopting best practices: things people and organizations do that lead to superior performance o For obvious reasons, a company will not share its best practices if they are its competitive advantage!

Goal Alignment: Individually set

perform tasks (member), provide support (leader)

To implement a plan, organizations set goals: Stretch Goals

performance targets that one must work hard and stretch to reach, but do not cause illegal or unethical behavior

single-use plans Budgets / Zero Based Budgets

plans that commit resources to projects or activities § Zero-based budgets allocate resources as if each budget were brand new § Zero-based budgets attempt to overcome "anchoring bias" in which we simply adjust from what we currently have (our current budget becomes our "anchor")

Goal Alignment: Jointly Control

review results, discuss implications, renew cycle

Goal Alignment: Jointly plan

setting objectives, setting standards, choosing actions

Types of plans used by Organizations: Focus (Vision)

the purpose of the organization and what it desires to be in the future

To implement a plan, organizations set goals: "SMART" Goals

§ Specific: desired outcomes are clear to anyone § Measurable: no doubt when accomplished or missed § Attainable: Challenging, but realistic to achieve § Relevant: focused on important results § Timely: linked to due dates and timetable

a well thought out plan improves

· focus and flexibility · action orientation (avoids the "complacency trap" - just being carried along by events) · coordination and control · time management (people are busy, so a plan enables people to direct their time to the right activities)

Standing Plans (policies and procedures)

Ø Policies: plans the communicate guidelines for decisions Ø Procedures: rules that describe actions to be taken in specific situations


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