Chapter 2 - Foundations of Planning
Transcript of Chapter 2 - Foundations of Planning
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Part 2: PlanningPart 2: Planning
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Chapter 3
o!ndationso" Planning
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L E A R N I N G O U T C O M E S
After reading this chapter, I will be able to:
#. $e"ine planning.
2. %&plain the potential bene"its o" planning.
'. Identi"y potential drawbacks to planning.
4. $isting!ish between strategic and tactical
plans.
(. )ecogni*e when directional plans are pre"erred
over speci"ic plans.
+. $e"ine anageent by ob-ectives and identi"y
its coon eleents.
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L E A R N I N G O U T C O M E S (contd)
After reading this chapter, I will be able to:
. /!tline the steps in the strategic anageent
process.
. $escribe the "o!r grand strategies.
1. %&plain 3/ analysis.
#0. $escribe how entreprene!rs identi"y a
copetitive advantage.
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Planning $e"ined
Defining the organiation! o"#ecti$e! or goa%! E!ta"%i!hing an o$era%% !trateg& for achie$ing
tho!e goa%!
De$e%o'ing a co'rehen!i$e hierarch& of '%an!to integrate and coordinate acti$itie!
Planning is concerned with ends (what is to be done)
as well as with means (how it is to be done).
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)easons "or
Planning
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Criticiss /" oral Planning
%anning a& create rigidit&* %an! cant "e de$e%o'ed for a d&naic
en$ironent*
+ora% '%an! cant re'%ace int,ition andcreati$it&*
%anning foc,!e! anager! attention on toda&!
co'etition- not on toorro.! !,r$i$a%*
+ora% '%anning reinforce! !,cce!!- .hich a&
%ead to fai%,re*
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3!
Planning and Per"orance
+ora% '%anning genera%%& ean! higher 'rofit!-higher ret,rn on a!!et!- and other 'o!iti$e
financia% re!,%t!*
%anning 'roce!! /,a%it& and i'%eentation'ro"a"%& contri",te ore to high 'erforance
than doe! the e0tent of '%anning*
1hen e0terna% en$ironent re!triction! a%%o.ed
anager! fe. $ia"%e a%ternati$e!- '%anning didnot %ead to higher 'erforance*
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ypes o" Plans
%5HI6I ' .2
6)%A$H I7% P%CIICI8 )%9:%;C8
/ :% )A7% / :%
trategic
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Planning= oc!s and ie
Strategic '%an!%an! that are organiation2.ide- e!ta"%i!h o$era%%
o"#ecti$e!- and 'o!ition an organiation in ter! of it!
en$ironent
Tactica% '%an!%an! that !'ecif& the detai%! of ho. an organiation!
o$era%% o"#ecti$e! are to "e achie$ed
Short2ter '%an!
%an! that co$er %e!! than one &ear
Long2ter '%an!%an! that e0tend "e&ond fi$e &ear!
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trategic Planning
Strategic '%an!A''%& "road%& to the entire organiation
E!ta"%i!h the organiation! o$era%% o"#ecti$e!
See3 to 'o!ition the organiation in ter! of it!
en$ironent
ro$ide direction to dri$e an organiation! effort! to
achie$e it! goa%!*
Ser$e a! the "a!i! for the tactica% '%an!*
Co$er e0tended 'eriod! of tie
Are %e!! !'ecific in their detai%!
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actical Planning
Tactica% '%an! (o'erationa% '%an!)A''%& to !'ecific 'art! of the organiation*
Are deri$ed fro !trategic o"#ecti$e!
S'ecif& the detai%! of ho. the o$era%% o"#ecti$e! are to
"e achie$ed*
Co$er !horter 'eriod! of tie
M,!t "e ,'dated contin,o,!%& to eet c,rrent
cha%%enge!
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$irectional vers!s peci"ic Plans
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peci"ic and $irectional Plans
S'ecific '%an!%an! that ha$e c%ear%& defined o"#ecti$e! and %ea$e
no roo for i!inter'retation
41hat- .hen- .here- ho. ,ch- and "& .ho5
('roce!!2foc,!)
Directiona% '%an!
+%e0i"%e '%an! that !et o,t genera% g,ide%ine!
4Go fro here to there5 (o,tcoe2foc,!)
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ingle>:se and tanding Plans
Sing%e2,!e '%an!A '%an that i! ,!ed to eet the need! of a 'artic,%ar
or ,ni/,e !it,ation
Sing%e2da& !a%e! ad$erti!eent
Standing '%an
A '%an that i! ongoing and 'ro$ide! g,idance for
re'eated%& 'erfored action! in an organiation
C,!toer !ati!faction 'o%ic&
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7anageent by /b-ectives
Manageent "& O"#ecti$e! (M6O)A !&!te in .hich !'ecific 'erforance o"#ecti$e! are
#oint%& deterined "& !,"ordinate! and their
!,'er$i!or!- 'rogre!! to.ard o"#ecti$e! i! 'eriodica%%&
re$ie.ed- and re.ard! are a%%ocated on the "a!i! ofthat 'rogre!!*
Lin3! indi$id,a% and ,nit 'erforance o"#ecti$e! at a%%
%e$e%! .ith o$era%% organiationa% o"#ecti$e!
+oc,!e! o'erationa% effort! on organiationa%%&i'ortant re!,%t!*
Moti$ate! rather than contro%!
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Cascading o" /b-ectives
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%leents o" 76/
Goa% !'ecificit& artici'ati$e deci!ion a3ing
E0'%icit tie 'eriod for 'erforance
erforance feed"ac3
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etting %ployee /b-ectives
Identif& an e'%o&ee! 3e& #o" ta!3!* E!ta"%i!h !'ecific and cha%%enging goa%! for each
3e& ta!3*
A%%o. the e'%o&ee to acti$e%& 'artici'ate* rioritie goa%!*
6,i%d in feed"ac3 echani!! to a!!e!! goa%
'rogre!!*
Lin3 re.ard! to goa% attainent*
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3$#
trategic 7anageent
Strategic Manageent roce!!A nine2!te' 'roce!! that in$o%$e! !trategic '%anning-
i'%eentation- and e$a%,ation
The organiation! c,rrent identit&
Mi!!ion !tateent
Define! the ',r'o!e of the organiation
O"#ecti$e!
Strategic '%anA doc,ent that e0'%ain! the ",!ine!! fo,nder! $i!ion
and de!cri"e! the !trateg& and o'eration! of that
",!ine!!*
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he trategic 7anageent Process
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Analy*e the %nvironent
En$ironenta% !canningScreening %arge ao,nt! of inforation to detect
eerging trend! and create a !et of !cenario!
Co'etiti$e inte%%igence
Acc,rate inforation a"o,t co'etitor! that a%%o.!
anager! to antici'ate co'etitor! action! rather
than ere%& react to the
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3/= Identi"ying
/rgani*ational
/pport!nities
%5HI6I '.+
3/ analysisAna%&!i! of an organiation! !trength!-
.ea3ne!!e!- o''ort,nitie!- and threat! in
order to identif& a !trategic niche that the
organiation can e0'%oit
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3/ Analysis
trengths ?strategic@ Internal reso!rces that are available or things that an
organi*ation does well
Core copetency= a !ni!e skill or reso!rce that
represents a copetitive edge
3eaknesses )eso!rces that an organi*ation lacks or activities that it
does not do well
/pport!nities ?strategic@
Positive e&ternal environental "actors
hreats ;egative e&ternal environental "actors
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Brand trategies
Browth strategy A strategy in which an organi*ation attepts to increase the
level o" its operations
)etrenchent strategy
A strategy characteristic o" a copany that is red!cing itssi*e, !s!ally in an environent o" decline
Cobination strategy he si!ltaneo!s p!rs!it by an organi*ation o" two or ore
o" growth, stability, and retrenchent strategies
tability strategy A strategy that is characteri*ed by an absence o" signi"icant
change
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Browth trategies
MergerOcc,r! .hen t.o co'anie!- ,!,a%%& of !ii%ar !ie-
co"ine their re!o,rce! to for a ne. co'an&
Ac/,i!ition
Occ,r! .hen a %arger co'an& ",&! a !a%%er one
and incor'orate! the ac/,ired co'an&! o'eration!
into it! o.n
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Copetitive trategies
Strategie! that 'o!ition an organiation in !,ch a.a& that it .i%% ha$e a di!tinct ad$antage o$er it!
co'etition
Co!t2%eader!hi' !trateg&
6ecoing the %o.e!t2co!t 'rod,cer in an ind,!tr&
Differentiation !trateg&
Atte'ting to "e ,ni/,e in an ind,!tr& .ithin a "road
ar3et
+oc,! !trateg&
Atte'ting to e!ta"%i!h an ad$antage
(co!t7differentiation) in a narro. ar3et !egent
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6encharking
6enchar3ingThe !earch for the "e!t 'ractice! aong co'etitor!
or nonco'etitor! that %ead to their !,'erior
'erforance
ISO 8999 !erie!Standard! de!igned "& the Internationa% Organiation
for Standardiation that ref%ect a 'roce!! .here"&
inde'endent a,ditor! atte!t that a co'an&! factor&-
%a"orator&- or office ha! et /,a%it& anageent!tandard!
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Attaining i& iga 9!ality
Si0 !igaA 'hi%o!o'h& and ea!,reent 'roce!! de$e%o'ed in
the :8;9! at Motoro%a*
To de!ign- ea!,re- ana%&e- and contro% the in',t
!ide of a 'rod,ction 'roce!! to achie$e the goa% of noore than
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i& iga #2>Process teps
Se%ect the critica%2to2/,a%it& characteri!tic!*
Define the re/,ired 'erforance !tandard!*
>a%idate ea!,reent !&!te- ethod!- and 'roced,re!*
E!ta"%i!h the c,rrent 'roce!!e! ca'a"i%it&*
Define ,''er and %o.er 'erforance %iit!*
Identif& !o,rce! of $ariation*
Screen 'otentia% ca,!e! of $ariation to identif& the $ita% fe. $aria"%e!
needing contro%*
Di!co$er $ariation re%ation!hi' for the $ita% $aria"%e!*
E!ta"%i!h o'erating to%erance! on each of the $ita% $aria"%e!*
>a%idate the ea!,reent !&!te! a"i%it& to 'rod,ce re'eata"%e data*
Deterine the ca'a"i%it& of the 'roce!! to contro% the $ita% $aria"%e!*
I'%eent !tati!tica% 'roce!! contro% on the $ita% $aria"%e!*
%5HI6I '.So,rce? Cited in D* @aro%d and +* * 6arto!- 4O'tiie E0i!ting roce!!e! to Achie$e Si0 Siga Ca'a"i%it&-5re'rinted .ith 'eri!!ion fro Control Engineering- March :88;- '*;B- Cahner! 6,!ine!! Inforation*
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Identi"ying A Copetitive Advantage
En$ironenta% !o,rce! of entre'rene,ria%o''ort,nit&
The ,ne0'ected
The incongr,o,!
The 'roce!! need
Ind,!tr& and ar3et !tr,ct,re!
Deogra'hic!
Change! in 'erce'tion
Ne. 3no.%edge