Planning and DM Session 2

8/10/2019 Planning and DM Session 2

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Essentials of Management

Session 2Planning , Decision Making and strategy

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Planning and Decision making

Planning is Setting organisational goals and

deciding how best to achieve them.

Decision making is part of the planning

process that involves selecting a course of

action from a set of alternatives.

(Griffin, 2005, p10)


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Procter and Gamble (P&G) case

Identify plans and DM activity.

Double the revenue in 10 years Increase revenues by 25 percent or increase

revenues by 3 times

Diversification into new markets, cost cuttingor buying competing businesses.


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Organisational goals

Mission statement

Strategic goals Goals set by and for the top

management of the organisation.

Tactical goals Operationalize actions?

Operational goals Optimize operations.


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Organisational plans - Nature

Strategic plans general plan outlining decisions

on resource allocation, priorities and action steps

necessary to facilitate long term strategic goals.

Tactical plans implementing specific parts of

strategic plans with specific focus. Effective

tactical plan involves both development and

execution Operational plans aims at achieving operational

goals. Focussed on functional effeciency.


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Organisational plans - Timeframe

Long range plans

Intermediate plans

Short range plans Contingency plans


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Operational plans

Single use plans

1. Program large set of activities. Complex steps

2. Project less scope and more focus

Standing plans

1. Policies Framework or a guide for action

2. Standard operating procedure (SOP) Steps to

be followed3. Rules and regulations specific on how to carry

out a particular activity


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MBO Process

Starting formal goal

setting program

Establishment of

organisational goals

and plans

Collaborating goal

setting and planning

Communicating

organisational goals

and plans, meeting,

verifying goals,

counselling, resources

Periodic review evaluation


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Decision making

Act of choosing one alternative from among a

set of alternatives (Griffin, 2005, p276)

Types of decisions in organisations

1. Programmed decisions structured and

recurs with some frequency

2. Non-programmed decisions unstructured

and ocurs less often


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Rational decision making process

Recognising anddefining decision

situation

Stimulus positive or negative

Ex employee turnover has increased by 5%

Identifyingalternatives

Generating obvious and creative alternatives

Ex Increase wages, benefits, change hiring standards

Evaluatingalternatives

Feasibility, satisfaction, consequences Increased benefits may not be feasible. Increasing wages or Changing hiring standards may benefit the organisation

Selecting the bestalternative

Choose the alternative that best fits the situation

Changing hiring standards is time consuming so increase wages

Implementing

Implemented into the organisational system

Approval from top mgmt. establishing new wage system by HR

Follow up andevaluation

Periodically Ascertain the alternative chosen and implemented against results

Six months later, drop in the turnover


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Strategy

Strategy is the direction and scope of an organisationover the long term, which achieves advantage in achanging environment through its configuration ofresources and competences with the aim of fulfilling

stakeholder expectations Johnson et al (2005)Exploring Corporate Strategy p.9

Strategic management is a comprehensive and

ongoing management process aimed and formulatingand implementing effective strategies.


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Strategic management

Types of strategies

1. Corporate level strategies

2. Business level strategies

Steps in strategic management

1. Strategy formulation

2. Strategy implementation

3. Strategy evaluation


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Swot analysis for strategy formulation

Strengths weaknesses

Opportunities Threats


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Corporate level strategies

1. Single product strategy

2. Related diversification

3. Unrelated diversification


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Business level strategies Porters

generic strategies

1. Differentiation strategy organisation seeks

to differentiate itself from competitors

through quality of its products and services

2. Cost-leadership strategy organisation aims

to gain competitive advantage by reducing

its cost below cost of competitors

3. Focus strategy organisation concentrates

on specific regional market or product line


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Summary

Thank you..

Planning and DM Session 2

Documents

Transcript of Planning and DM Session 2