Mahmood Qasim Slides Planning for BBA and MBA Students
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Mahmood Qasim Slides Planning for BBA and MBA Students

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    Mahmood Qasim Slides Planning for BBA and MBA Students Mahmood Qasim Slides Planning for BBA and MBA Students Presentation Transcript

    • Mahmood Qasim PLANNING
    • Goal, Plan And Planning Mahmood Qasim Goal A desired future state that the organization attempts to realize. Plan A blueprint specifying the resource allocations, schedule, and other actions necessary for attaining goals. Planning The act of determining the organization’s goals and the means for achieving them.
    • Levels Of Goals/Plans And Their Importance External Message Mission Mahmood Qasim Statement Legitimacy for investors, customers, supp liers, community Strategic Goals/Plans Senior Management (Organization as a whole) Tactical Goals/Plans Middle Management (Major divisions, functions) Operational Goals/Plans Lower Management (Departments, individuals) Internal Message Legitimacy, motivation, guides, rationale, standards
    • Levels of Goal in Organizations Mahmood Qasim Missions The organization’s reason for existence Mission Statement A broadly stated definition of the organization’s basic business scope and operations that distinguishes it from similar types of organizations Strategic Goals Broad statements about the organization’s direction and future that pertain to the organization as a whole rather than to specific divisions or departments Strategic Plans The action steps by which an organization intends to attain its strategic goals
    • Components of Mission Statement Customers : Who are the organization’s customers? 2 Mahmood Qasim 1 Products or services : What are the organization’s major products or services? 3 Location : Where does the organization compete? 4 Technology : What is the organization’s basic technology? 5 6 7 8 9 Concern for survival : What is the organization’s commitment to economic objectives? Philosophy : What are the beliefs, values, aspiration, and philosophical priorities of the organization? Self-concept : What are the organization’s major strengths and competitive advantage? Concern for public image : What are the organization’s public responsibilities, and what image is desired? Concern for employees : What is the organization’s attitude towards employees?
    • Mahmood Qasim Hierarchy of Goal Strategic Goals Strategic Plans Tactical Goals Tactical Plans Operational Goals Operational Plans Top Management Organization wide perspective Middle Management Department perspective First-Level Management Unit / individual perspective
    • Hierarchy of Goal Mahmood Qasim Strategic goals Tactical Goals Operational Goals Broad statements of where the organization wants to be in the future: pertain to the organization as a whole rather than to specific divisions or departments Goals that define the outcomes that major divisions and departments must achieve in order for the organization to reach its overall goals. Specific, measurable results expected from departments, work groups, and individuals within the organization. Strategic Plans The action steps by which an organization intends to attain its strategic goals. Tactical Plans Plans designed to help execute major strategic plans and to accomplish a specific part of the company’s strategy. Operational Plans Plans developed at the organization’s lower levels that specify action steps towards achieving operational goals and that support tactical planning activities.
    • Hierarchy of Goal MISSION Manufacture both standard and custom metal products for various applications in the machine tool industry Strategic Goals Mahmood Qasim PRESIDENT 12% return on investment 5% growth No employee layoffs Excellent service to customers Tactical Goals FINANCE V.P. Keep outstanding accounts below Rs.500,000 Below borrowing below Rs.1.250,000 Provide monthly budget statements for departments PRODUCTION V.P. Manufacture 1,200,000 products at average cost of Rs.19 Scrap rate of 3% or less Increase manufacturing productivity by 2% Resolve employee grievances within 3 working days Marketing V.P. Sell 1,200,000 units at average price of Rs.27 Introduce 1 new product line Increase sales by 5% in new market areas Open 1 new sales office Operational Goals ACCOUNT RECEIVABLE MANAGER Issue invoices within 5 days of sale Check new customers’ credit within 1 working day Allow no account to be overdue more than 5 months SUPERVISOR-AUTOMATIC MACHINES Produce 150,000 standard units at average cost of Rs.16 Have machine downtime of less than 7% SALES MANAGER-REGION 1 Respond to customer inquiries within 2 hours Meet sales quotes of 120,600 units Work with salespeople to:
    • Criteria for Effective Goals Mahmood Qasim 1 Specific and Measurable 5 2 Linked to Rewards Cover Key Result Area 4 Defined Time Period 3 Challenging but Realistic
    • Planning Types and Models Management by Objectives Mahmood Qasim A method of management whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance. Single-Use Plans Plans that are developed to achieve a set of goals that are unlikely to be repeated in the future. Standing plans Ongoing plans used to provide guidance for tasks performed repeatedly within the organization. Shewhart Cycle A planning cycle used in companies that have instituted quality management; also called PDCA – plan, do, check, act – Cycle. Contingency plans Plans that define company responses to specific situation, such as emergencies or set backs
    • Management by Objectives (MBO) Mahmood Qasim Set Goals Develop action plan Four major activities must occur in order for MBO to be successful Review progress Appraise overall performance
    • Model of the MBO Process Mahmood Qasim Step 1: Set Goals Corporate strategic goals Departmental goals Individual goals Step 2: Develop Action Plan Action Plan Review Progress Step 3: Review Progress Take Corrective Action Appraise Performance Step 4: Appraise Overall Performance
    • Benefits and Problems with MBO Mahmood Qasim Benefits of MBO 1. Manager and employee efforts are focused on activities that will lead to goal attainment. 2. Performance can be improved at all company levels. 3. Employees are motivated. 4. Departmental and individual goals are aligned with company goals. Problems with MBO 1. Constant change prevents MBO from taking hold. 2. An environment of poor employer-employee relations reduces MBO effectiveness 3. Strategic goals may be displaced by operational goals. 4. Mechanistic organizations and values that discourage participants can harm the MBO process. 5. Too much paperwork saps MBO energy.
    • Major Types of Standing Plans Mahmood Qasim Policy Rule Broad in scope – a general guide to action Based on organization's overall goals/strategic plan Defines boundaries within which to make decisions Examples: Drug-free workplace policies Continuous improvement Shewhart Cycle Narrow in scope Describes how a specific action is to be Examples: performed No-smoking rule in areas May apply to specific setting of plant where hazardous materials are stored Sometimes called a standard operating Procedure procedure Defines a precise series of steps to attain certain goals May apply to specific setting Examples: Procedures for issuing refunds Procedures for handling employee grievances
    • Mahmood Qasim Contingency Plans When organizations are operating in a highly uncertain environment or dealing with long time horizons, sometimes planning can seem like a waste of time. In fact, strict plans may even hinder rather than help them form more flexible plans. To develop contingency plans, planners indentify uncomfortable factors, such as recession, inflation, technological developments, or safety accidents. To minimize the impact of these potential factors, a planning team can forecast the worst-case scenarios. Example: If sales fall 20% and prices drop 8%, what will the company do?
    • Mahmood Qasim Shewhart Cycle of Continuous Improvement 1. Plan Analyze results; put learning into action Decide what changes are desirable, and plan a change or test 3. Check 2. Do Observe the results Carry out the change or test 4. ACT
    • Mahmood Qasim Planning Time Horizon Today Short-Term Planning (Operational Goals) 1 Year Intermediate – Term Planning (Tactical Golas} 2 Years 3 Years 4 Years Long-Term Planning (Strategic Planning} Six Years & Beyond
    • Mahmood Qasim The New Planning Paradigm Today, some companies are taking decentralized planning even further and involving workers at every level of the organization in the planning process. In this new paradigm, a decentralized planning staff – made up of middle managers and other planners – works with a planning task force of line managers and frontline workers to develop dynamic plans that meet the organization’s needs . Decentralized Planning Staff A group of planning specialists assigned to major departments and divisions to help managers develop their own strategic plans Planning Task force A temporary group consisting of line managers responsible for developing strategic plans
    • Mahmood Qasim What is Strategic Management? Strategic management is the set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organizations and its environment so as to achieve organizational goals. Essence of Strategy Is choosing to perform different activities differently than competitors do.
    • Strategic Formulation versus Implementation Mahmood Qasim The final aspect of strategic management involves the stages of formulation and implementation. Strategy formulation includes the planning and decision making that leads to the establishment of the firm’s goals and the development of specific strategic plan. Strategic formulation may include external environment and internal problems and integrating the results into goals and strategy. Strategy implementation is the administration and execution of the strategic plan. Managers may use persuasion, new equipment , changes in organization structure , or a reward system to ensure that employees and resources are used to make formulated strategy a reality.
    • The Strategic Management Process Mahmood Qasim Scan External Environment National Global Evaluate Current Mission Goals Strategies Identity strategic Factors: •Opportunities •Threats SWOT Scan internal Environment Core Competence Synergy Value Creation Define New: Mission Goals Grand Strategy Identify Strategic Factors: Strategies Weaknesses Formulate Strategy: Corporate Business Functional Implement Strategy via Changes in: Leadership/culture Structure Human Resource Information and control systems
    • Porter’s Competitive Forces and Strategies Mahmood Qasim Potential New Entrants Bargaining Power of Buyers Bargaining Power of Suppliers Threat of Substitute Products Rivalry Among Competitors
    • Competitive Strategies Mahmood Qasim Differentiation Cost Leadership Focus
    • Mahmood Qasim Thank You End of Planning