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Transcript of 5 7
PLANS AND PLANNING TECHNIQUEChapter 5
HOW DO MANAGERS USE THE PLANNING PROCESS?
Planning is one of the four functions of management
Planning is the process of setting objectives and identifying how to achieve them
Steps in the Planning Process: Step 1: Define your objectives Step 2: Determine where you stand vis a vis
objectives Step 3: Develop premise regarding future
conditions
Step 4: Make a plan Step 5: Implement the plan and evaluate
results Objectives: specific results that one wishes to
achieve Plan : statement of intended means for
accomplishing objectives
Good planning makes us… Action Oriented Priority Oriented Advantage Oriented Change Oriented Planning provides focus and orientation The complacency trap is being lulled into
inaction by current successes or failures
Planning improves coordination and control
In a hierarchy of objectives, lower-objectives help achieve higher-level ones
Planning improves time management
WHAT TYPES OF PLANS DO MANAGERS USE?
Managers use short-range and long-range plans
Short-range plans – covers a year or less Long-range plans- covers three years or more Strategic plans – identifies long-term
decisions for the organization Vision – clarifies purpose of the organization
and expresses what it hopes to be in the future
Operational Plan/ Tactical Plans : sets out ways to implement a strategic plans
Functional Plans: identifies how different parts of an enterprise will contribute to accomplishing strategic plans
Organizational policies and procedures are plans
Policy: standing plans that communicates broad guidelines for decisions and action
Procedure/ Rule: precisely describes actions to take in specific situations
Budgets are plans that commit resources to activities
Zero-based resources: allocates resources as if each budget was brand-new
Forecasting tries to predict the future Contingency planning creates backup plans
for when things go wrong
Scenario planning crafts plans for alternative future conditions
Benchmarking identifies best practices used by others
Participatory planning improves implementation capacities
Goal setting helps align plans and activities throughout an organization
Stretch goals are performance targets that we have to work extra hard and stretch to reach
CONTROLS AND CONTROL SYSTEMSChapter 6
HOW AND WHY DO MANAGERS USE THE CONTROL PROCESS?
Controlling is one of the four functions of management
Controlling: the process of measuring performance and taking action to ensure desired results
After-action review: structured review of lessons learned and results accomplished through a completed project, task force assignment or special operations
Control begins with objectives and standards
Output standards: measures performance results in terms of quantity, quality, cost or time
Input standards: measures work effort that goes into a performance task
Control measures actual performance Control compares results with objectives and
standards
Control takes corrective actions as needed Management by exception: focuses attention
on differences between actual and desired performance
WHAT TYPES IF CONTROLS ARE USED BY MANAGERS?
Managers use feedforwad, concurrent, and feedback results
Feedforward: ensures clear directions and needed resources before the work begins
Concurrent control: focuses on what happens during the work process
Feedback: takes place after completing an action
Managers use both external and internal controls
Internal control/ self control: occurs as people exercise self-discipline in fulfilling job expectations
External control: occurs through direct supervision or administrative systems
Bureaucratic control: influences behavior through authority, policies, procedures, job descriptions, budgets, and day-to-day supervision
Clan control: influences behavior through social norms, and peer expectations
Market control: the influence of market competition on the behaviors of organizations and their members
Managing objectives is a way to integrate planning and controlling
Managing by objectives: a process of joint objective setting between a superior and a subordinate
Improvement objectives: documents intentions to improve performance in a specific way
Personal development objectives: documents intentions to improve personal growth, such as expanded job knowledge or skills
WHAT ARE SOME USEFUL CONTROL TOOLS AND TECHNIQUES?
Quality control is a foundation of modern management
Total Quality Management (TQM): commits to quality objectives, continuous improvement and doing things right the first time
Continuous improvement: involves always searching for new ways to improve work quality and performance
Control charts: graphical ways of displaying trends so that exceptions to the quality standards can be identified
Six sigma: quality standard of 3.4 defects or less per million products or service deliveries
Gantt Chart and CPM/PERT are used in project management and control
Project: one time activities with many competent tasks that must be completed in proper order and according to budget
Project management: makes sure activities required are to complete a project are planned well and accomplished on time
Gantt Chart: graphically displays the scheduling of tasks required to complete the project
CPM/PERT: is a combination of critical path method and program evaluation and review technique.
Critical path: the pathway from project start to conclusion that involves activities with the longest completion times
Critical path
Inventory controls help save costs Inventory control: ensures that inventory is
only big enough to meet immediate needs Economic order quantity method: places new
orders when inventory levels fall to predetermined points
Just in Time (JIT) scheduling: routes materials to workstations just in time of use
Breakeven analysis shows where revenues will equal costs
Breakeven point: occurs where revenues equal costs
Breakeven analysis performs what-if calculations under different revenue and cost conditions.
Financial ratios measure key areas of financial performance
Balanced scorecards help top managers exercise strategic control
Balanced scorecard: measures performance on financial, customer service, internal process, and innovation and learning goals
STRATEGY AND STRATEGIC MANAGEMENTChapter 7
WHAT TYPES OF STRATEGIES ARE USED BY ORGANIZATIONS?
Strategy is a comprehensive plan for achieving competitive advantage.
Corporate strategy: sets long term direction for total enterprise
Business strategy: identifies how a division or strategic business unit will compete in its product or service domain
Functional strategy: guides activities within ne specific area of operations
Growth strategies focus on expansion Functional strategy: guides activities within
one specific area of operations Restructuring and divestiture strategies focus
on consolidation Retrenchment strategy: changes operations
to correct weakness Liquidation: occurs when business closes and
sells its assets to pay creditors
Restructuring: reduces the scale or mix of operations
Chapter 11 bankruptcy: protects an insolvent firm from creditors during a period of reorganization to restore profitability
Downsizing: decreases the size of operations Divestiture: involves selling off parts of the
organization to refocus attention on core business areas
Global strategies focus on international business incentives
Global strategy: adopts standardized products and advertising for use worldwide
Transnational firm tries to operate globally without having a strong national identity
Cooperative strategies focus on alliances and partnerships
Strategic allegiance: organizations join together in partnership to pursue an area of mutual interest
Co-opetition: working with rivals on projects with mutual benefit
E-business strategies focus on using the internet for business strategies
B2B Business strategy: uses IT and Web portals to link organizations vertically in supply chains
B2C Business strategy: uses IT and Web portals to link businesses with customers
Social media strategy: uses social media to better engage with an organization’s customers, clients and external audiences in general
Crowdsourcing: strategic use of internet to engage customers and potential customers in providing opinions and suggestions on products and their designs
HOW DO MANAGERS FORMULATE AND IMPLEMENT STRATEGIES?
The strategic management process formulates and implements strategies
Strategic management: process of formulating and implementing strategies
Strategic formulation: process of creating strategies
Strategic implementation: process of putting strategies into action
Strategy formulation begins with organization's mission and objectives
Mission: organization's reason for existence in society
Operating objectives: specific results that organizations wish to accomplish
SWOT analysis identifies strengths, weaknesses, opportunities and threats
Core competencies: special strength that gives an organization a competitive advantage
Porter’s Five-process model examines industry attractiveness
Porter’s competitive strategies model examines business or product strategies
Differentiation strategy: offers products that are unique and different from those of the competition
Cost leadership strategy: seeks to operate with lower costs than competitors
Focused differentiation strategy: offers unique products to a special market segment
Focused cost leadership strategy: seeks the lowest cost of operations within a special market segment
Portfolio planning examines strategies across multiple businesses or products
BCG Market – analyzes business opportunities according to market growth rate and market share
Strategic leadership ensures strategy implementation and control
Strategic leadership: inspires people to implement organizational strategies
Strategic control: makes sure that strategies are well implemented and that poor strategies are scrapped or changed