Management Chapter 5

Planning

-is the first of the four functions in the management process -Is defined as setting goals and deciding how to achieve them -is coping with uncertainty by formulating future courses of action to achieve specified results -involves ensuring the plans are linked to the business strategy

1. Provide direction and momentum 2. encourage new ideas 3. develop a sustainable competitive advantage

3 reasons an organization should adopt planning and strategic management

Vision Statement

A clear sense of the future and the actions needed to get there What do we want to become? Where do we want to go?

Mission statement

Explain the purpose of the organization What is our reason for being? Why are we here?

1. Top management must be committed to it. 2. Goals must be applied organization-wide. 3. Goals must "cascade"—be linked consistently down through the organization.

For MBO goal setting to be successful the following three things have to happen:

Long term goals

Generally referred to as strategic goals Tend to span 1 to 5 years and focus on achieving the strategies identified in a company's strategic plan

clarity future focus abstractness and challenge idealism

In a vision statement research has found that vision statements exhibiting the following characteristics are most effective ___________ employees understand the vision statement ____________ the vision statement describes the future not the current state _____________ The future is described as hypothetical and difficult but achievable _____________ The future is portrayed as being highly desirable

1. managers and employees jointly set objectives for the employee 2. Managers develop action plans 3. Managers and employees periodically review the employees performance 4. the managers makes a performance appraisal and rewards the employee according to the results

Management by objectives is a four step process in which: Is to motivate rather than to control subordinates

sustainable competitive advantage

Occurs when an organization is able to get and stay ahead in four areas: 1. In being responsive to customers 2. In innovating 3. In quality 4. In effectiveness

strategy innovation

Scholar Gary Hamel says that companies have been successful because they are able to unleash the spirit of

Short term goals

Sometimes referred to as tactical or operational goals, or just plain goals Generally span 12 months and connected to strategic goals in a hierarchy known as a means-end chain

specific, measurable, attainable, result-oriented, and target dates

What are the "smart" goals

Value Statement

What the company stands for: its core priorities, the values its employees embody, and what its products contribute to the world What values do we want to emphasize?

Unless a plan is in place manager may well focus on just whatever is in front of them "putting out fires" Managers might be so preoccupied with day-to-day pressures that their organization can loose momentum

Why is momentum and direction important?

Business plan

a document that outlines a firm's goals, the strategy for achieving them, and the standards for measuring success

operating plan

as a plan that "breaks long-term output into short-term targets" or goals turn strategic plans into actionable short term goals and action plan

Action plan

defines the course of action needed to achieve the stated goal contains a projected date for completing the desired activities for each tactic

rule

designates specific required action

program

encompasses a range of projects or activities

single use plan

for activities not likely to be repeated in the future

Standing plan

for activities that occur repeatedly over a period of time

Measurable

goals should be measurable or quantifiable. there should be some way to measure the degree to which a goal has been reached. whenever possible, goals should be measurable or quantifiable

Specific

goals should be stated in specific rather than vague terms

project

has less scope and complexity than a program

Plan

is a document that outlines how goals are going to be met

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

Strategic Management

is a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals All managers from top, middle, first line, and leader managers Derive from an organizations mission and vision about itself

goal (objective)

is a specific commitment to achieve a measurable result within a stated period of time

Mission

is its purpose or reason for being

Competiive Advantage

is the ability of an organization to produce goods or services more effectively than its competitors do therefore outperforming them

procedure

outlines response to particular problems or circumstances

policy

outlines the general response to a designated problem or situation

Strategy

set the long term goals and direction for an organization it represents an educated guess about what long term goals or direction to pursue for the survival or prosperity of the organization It generally is reconsidered every year because of ever changing business conditions

Target dates

specify the target dates or deadlines dates when they will be attained. goals should specify the target dates or deadline dates when they are to be to be obtained

tactical planning by middle management

that is determine what contributions their departments or similar work units can make their given resources during the next 6-24 months

operational planning by first-line management and team leaders

that is they determine how to accomplish specific tasks with available resources within the next 1-52 weeks

strategy innovation

the ability to reinvent the basis of competition within existing industries—"bold new business models that put incumbents on the defensive."

Strategic Planning

they determine what the organization's long-term goals should be for the next 1-5 years with the resources they expect to have available

attainable

they should be realistic and attainable. goals should be achievable within the scope of the time. goals should be challenging

Result Oriented

they should support the organizations vision. only a few goals should be chosen say five for any work unit. and they should be result oriented they should support the organizations vision

Mission statement

which expresses the purpose of the organization

Vision statement

which expresses what the organization should become, where it wants to go strategically

Business model

which outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses