MGMT Chapter 6

Short Term Goal

~1 year

Intermediate Term Goal

~5 years

Strategic Plan

-A general plan outlining decisions of resource allocation, priorities, and action steps necessary to reach strategic goals. -focuses on resources,environment, and mission. -Long term focus -Address questions of scope, resource deployment, competitive advantage, and synergy.

Succesful Implementation of tactical plan depends on:

-Astute use of resources -effective decision making -insightful steps to ensure the right things are done at the right time in the right way

Planning Staff

-Can reduce workload of individual managers -Help coordinate planning activities of individual managers -bring to a particular problem many different tools and techniques -Take a broader view than individual managers -Go beyond pet projects and particular departments

Planning Task Force

-Comprises line managers with a special interest in the relevant area of planning. -may also have members from the planning staff. -When org wants to address special circumstance.

Long-range plan

-Covers many years, perhaps even decades;common long-range plans five or more years.

Intermediate Plan

-Generally covers 1 to 5 years -Tend to cover tactical plans

Operational Goals (Objective)

-Set by and for lower-level managers -Concern with shorter-term issues associated with tactical goals.

Long Term Goal

10 years or longer

Optimizing

Balancing and reconciling possible conflicts among goals.

2 types of operational plans

Single-Use and Standing

Tactical Plan

-Plan aimed at achieving tactical goals, developed to implement parts of a strategic plan. -somewhat shorter time horizon -More specific and concrete focus. -Getting things done instead of deciding what to do. -Focused primarily on people and action -Specify resources and time frames

Main purposes of goals

-Provide guidance and a unified direction for people in the organization -Strongly affects other aspects of planning -Serve as a source of motivation for employees of the organization -Provide an effective mechanism for evaluation and control.

Short-Range Plan

-Generally covers span of 1 year or less -2 kinds a) Action Plan b)Reaction Plan

Contingency Plan Action Point 2

-Implement plan and formally identify contingency events -only events likely to occur whose effects will have substantial impact on org are considered

Line Management

-Managers with formal authority and responsibility for management of organization -Play important role in organizations planning process 1) because they are a valuable source of of inside info and 2) line managers at middle and lower levels of org usually must execute plans developed by top management. -identifies, analyzes, and recommends program alternatives, develops budgets and submits them for approval, and finally sets the plan in motion.

Tactical Goal

-Set by and for middle managers -focus on how to operationalize actions necessary to achieve strategic goals

Strategic Goal

-Set by and for top management of the organization. -Focus on broad. general issues.

Standard Operating Procedure(SOP)

-Standard plan that outlines the steps to be followed in particular circumstances -More specific than policy -focuses on series of activities.

Policy

-Standing plan that specifies orgs general response to designated problem or situation. -Most general form of standing plan -Likely to describe how exceptions should be handled

Contingency Planning

-The determination of alternative courses of action to be taken if an intended plan or action is unexpectedly disrupted or rendered inappropriate -may include strategic, tactical, and operational plans

Crisis Management

-The set of procedures org uses in event of a disaster or unexpected calamity. -some elements are orderly and systematic, others may be ad hoc and develop as events unfold.

Action Plan

-Used to operationalize any other kind of plan

Board of Directors

-among other responsibilities, establishes the corporate mission and strategy -takes active role in planning process in some companies -selects competent chief executive, delegates planning to them

Operational Plan

-focuses on carrying out tactical plans to achieve operational goals. -short term focus, relatively narrow scope

Common constraints

-lack of resources -gov. Restrictions -strong competition

Everyone involved in the planning process should know:

-overriding org strategy -various functional strategies, how they are to be implemented and coordinated.

Inappropriate Goals

-paying large dividend to stockholders at expense of research and dev -unattainable -too much emphasis on either qualitative or quantitative measures of success

Rules and Regulations

-standard plan describing exactly how specific actions are to be carried out -most narrow standing plan. -can be problematic if excessive or enforced too rigidly -focuses on one activity

Executive Committee

-usually composed of top executives in org working together as a group. -members meet regularly to provide input to CEO on proposals that affect their own units and to review strategic plans that develop from this input -members often assigned to various staff committees, subcommittees, and task forces to concentrate on specific projects or problems that might confront the entire organization at some time in the future.

Chief Executive Officer (CEO)

-usually the president or the chair of the board of directors. -probably single most important person in organizations planning process -Responsible for implementing strategy

Major barriers to goal setting and planning

1) Inappropriate goals 2) Improper reward system 3) Dynamic and complex env 4)Reluctance to establish goals 5) Resistance to change 6) Constraints

Developing Tactical Plans

1) Manager must recognize tactical planning must address a number of tactical goals, derived from a broader strategic goal. 2) Although strategies generally stated in general terms, tactics must specify resources and time frames. 3) Involves use of human resources

Levels of goals

1) Mission 2) Strategic 3)Tactical 4) Operational

Proper execution of tactical plan depends on:

1) manager evaluating every possible course of action in light of the goal it is intended to reach 2) manager makes sure each decision maker has the information and resources necessary to get the job done 3) manager must monitor ongoing activities derived from the plan to make sure they are achieving the desired results.

Overcoming barriers to goal setting and planning

1)Understanding purposes of goals and planning 2) communication and participation 3) Consistency, revision, and updating 4) Effective reward system

Mission

A statement of an organization's fundamental, unique purpose that sets a business apart from other firms of its type and identifies the scope of the business' operations in product and market terms

Who sets goals?

All managers should be involved in goal setting process.

Decision Making

Cornerstone of planning/catalyst of planning process.

Contingency Plan Action Point 1

Develop plan, considering contingency events

Reaction Plan

Developed to react to an unforeseen circumstance

Who determines mission and strategic goals?

Directors and top managers

Management by objectives (MBO) (Performance Agreement system(PAS))

Formal goal-setting process involving collaboration between managers and subordinates; the extent to which goals are accomplished is a major factor in evaluating and rewarding subordinates' performance

Goals vary by:

Level Area Time Frame

Who determines operational goals?

Middle and lower-level managers are jointly responsible.

First Managerial Functions Organization Must Address

Planning and Decision Making

Program

Single-use plan for a large set of activities.

Project

Single-use plan of less scope and complexity than a program.

Contingency Plan Action Point 3

Specify indicators for contingency events and develop contingency plans for each possible event

Contingency Plan Action Point 4

Successfully complete plan or contingency plan.

Purpose of formal goal setting

To give subordinates a voice in the goal-setting and planning processes and to clarify for them exactly what they are expected to accomplish in a given time span.

Who determines tactical goals?

Top and middle managers work together