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planning

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  • 1. Chapter 4 Planning
  • 2. What Would You Do? <ul><li>In early 2000 Air Canada controlled 90% of the domestic market </li></ul><ul><li>By early 2001 Air Canada’s share of the market had dropped to 73% </li></ul><ul><li>WestJet’s share had climbed to 14% </li></ul><ul><li>WestJet had a significantly lower cost structure than Air Canada </li></ul><ul><li>What would you do? </li></ul>
  • 3. Learning Objectives: Planning <ul><li>After reading these next two sections, you should be able to: </li></ul><ul><li>1. discuss the costs and benefits of planning </li></ul><ul><li>2. describe how to make a plan that works </li></ul>
  • 4. Costs and Benefits of Planning <ul><li>Benefits of Planning </li></ul><ul><li>Planning Pitfalls </li></ul>
  • 5. Benefits of Planning <ul><li>Intensified Effort </li></ul><ul><li>Persistence </li></ul><ul><li>Direction </li></ul><ul><li>Creation of Task Strategies </li></ul>
  • 6. Planning Pitfalls <ul><li>Impede change and slow or prevent adaptation </li></ul><ul><li>Create a false sense of security </li></ul><ul><li>Detachment of planners </li></ul>
  • 7. How to Make a Plan That Works Exhibit 4.1
  • 8. Setting Goals <ul><li>S pecific </li></ul><ul><li>M easurable </li></ul><ul><li>A ttainable </li></ul><ul><li>R ealistic </li></ul><ul><li>T imely </li></ul>
  • 9. Goal Commitment <ul><li>The determination to achieve a goal. </li></ul><ul><li>Increased by: </li></ul><ul><ul><li>Setting goals participatively </li></ul></ul><ul><ul><li>Making goals reasonable </li></ul></ul><ul><ul><li>Making goals public </li></ul></ul><ul><ul><li>Obtaining top management support </li></ul></ul>
  • 10. Developing an Effective Action Plan <ul><li>For accomplishing a goal an action plan lists: </li></ul><ul><ul><li>Specific steps </li></ul></ul><ul><ul><li>People </li></ul></ul><ul><ul><li>Resources </li></ul></ul><ul><ul><li>Time period </li></ul></ul>
  • 11. Tracking Progress <ul><li>First method </li></ul><ul><ul><li>Set proximal (i.e., short-term) goals </li></ul></ul><ul><ul><li>Set distal (i.e., long-term or primary) goals </li></ul></ul><ul><li>Second method </li></ul><ul><ul><li>Gather and provide feedback </li></ul></ul><ul><ul><li>Make adjustments in effort, direction, and strategies </li></ul></ul>
  • 12. Maintaining Flexibility <ul><li>Options-based planning </li></ul><ul><ul><li>keep options open through simultaneous investment </li></ul></ul><ul><ul><li>invest more in promising options </li></ul></ul><ul><li>Learning-based planning </li></ul><ul><ul><li>plans need to be continually tested, changed and improved </li></ul></ul><ul><ul><li>encourages frequent reassessment and revision of goals </li></ul></ul>
  • 13. Learning Objectives: Kinds of Plans <ul><li>After reading the next two sections, you should be able to: </li></ul><ul><li>3. discuss how companies can use plans at all management levels, from top to bottom </li></ul><ul><li>4. describe the different kinds of special- purpose plans that companies use to plan for change, contingencies, and product development </li></ul>
  • 14. Planning From Top to Bottom Exhibit 4.3
  • 15. Planning From Top to Bottom Exhibit 4.3
  • 16. Starting at the Top <ul><li>Vision </li></ul><ul><ul><li>statement of a company’s purpose </li></ul></ul><ul><ul><li>brief, inspirational, clear, and consistent with company beliefs and values </li></ul></ul><ul><li>Mission </li></ul><ul><ul><li>flows from the vision </li></ul></ul><ul><ul><li>specific, unifying goal that stretches and challenges the organization and has a timeframe </li></ul></ul>
  • 17. Planning Timeframes Exhibit 4.4
  • 18. Setting Missions <ul><li>Targeting </li></ul><ul><ul><li>setting a clear, specific target </li></ul></ul><ul><li>Common-enemy mission </li></ul><ul><ul><li>vowing to defeat a corporate rival </li></ul></ul><ul><li>Role-model mission </li></ul><ul><ul><li>emulating a successful company </li></ul></ul><ul><li>Internal-transformation mission </li></ul><ul><ul><li>aiming to achieve dramatic change to remain competitive </li></ul></ul>
  • 19. Bending in the Middle <ul><li>Tactical Plans </li></ul><ul><ul><li>specify how a company will use resources, budgets, and people to accomplish goals </li></ul></ul><ul><li>Management by Objectives </li></ul><ul><ul><li>develop and carry out tactical plans </li></ul></ul><ul><ul><li>four steps </li></ul></ul><ul><ul><ul><li>discuss goals </li></ul></ul></ul><ul><ul><ul><li>participatively select goals </li></ul></ul></ul><ul><ul><ul><li>jointly develop tactical plans </li></ul></ul></ul><ul><ul><ul><li>meet to review performance </li></ul></ul></ul>
  • 20. What Really Works <ul><li>Management by Objectives (MBO) </li></ul><ul><li>Based on: </li></ul><ul><ul><li>goals </li></ul></ul><ul><ul><li>participation </li></ul></ul><ul><ul><li>Feedback </li></ul></ul><ul><li>Companies that use MBO are likely to outproduce companies that do not use it! </li></ul>
  • 21. Finishing at the Bottom <ul><li>Operational plans </li></ul><ul><ul><li>day-to-day plans </li></ul></ul><ul><li>Single-use plans </li></ul><ul><ul><li>deal with unique, one-time-only events </li></ul></ul><ul><li>Standing plans </li></ul><ul><ul><li>plans for recurring events </li></ul></ul><ul><ul><li>three types </li></ul></ul><ul><ul><ul><li>Policies </li></ul></ul></ul><ul><ul><ul><li>Procedures </li></ul></ul></ul><ul><ul><ul><li>Rules and regulations </li></ul></ul></ul><ul><li>Budgets </li></ul>
  • 22. Special-Purpose Plans <ul><li>Planning for Change </li></ul><ul><li>Planning for Contingencies </li></ul><ul><li>Planning for Product Development </li></ul>
  • 23. Planning for Change <ul><li>Stretch goals </li></ul><ul><ul><li>extremely ambitious goals that you don’t know how to reach </li></ul></ul><ul><li>Benchmarking </li></ul><ul><ul><li>identifying outstanding practices, processes, and standards in other companies </li></ul></ul><ul><ul><li>adapting them to your company </li></ul></ul>
  • 24. Planning for Contingencies: Scenario Planning <ul><li>Define the scope of the scenario </li></ul><ul><li>Identify the major stakeholders </li></ul><ul><li>Identify environmental trends </li></ul><ul><li>Identify key uncertainties and outcomes </li></ul><ul><li>Using steps 1-4 create initial scenarios </li></ul><ul><li>Check each scenario for consistency and plausibility of facts </li></ul><ul><li>Create contingency plans from each scenario </li></ul><ul><li>Develop measures to indicate when scenario events are occurring </li></ul>
  • 25. Planning for Product Development <ul><li>Aggregate product plans: </li></ul><ul><li>used to manage and monitor all new products </li></ul><ul><li>indicate resources being used for each product </li></ul><ul><li>indicate product’s place in company’s plans </li></ul><ul><li>help avoid having too many products in development </li></ul>
  • 26. Product-development Process <ul><li>Four factors: </li></ul><ul><ul><li>cross-functional teams </li></ul></ul><ul><ul><li>internal and external communication </li></ul></ul><ul><ul><li>overlapping development phases </li></ul></ul><ul><ul><li>frequent testing of product prototypes </li></ul></ul>
  • 27. What Really Happened? <ul><li>Air Canada set specific goals </li></ul><ul><li>Focused on cost structure </li></ul><ul><li>Launched Tango and Zip </li></ul><ul><li>Attempted to reduce labour costs </li></ul><ul><li>Hit hard by SARS, Iraqi conflict and a weakening economy </li></ul><ul><li>Sought bankruptcy protection in 2003 </li></ul>

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