Management 5 - 7
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  • 1. Plans and Planning Technique Chapter 5
  • 2. How do Managers use the planning process?• Planning is one of the four functions of management
  • 3. • 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
  • 4. 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
  • 5. • Good planning makes us…Action OrientedPriority OrientedAdvantage OrientedChange Oriented***The complacency trap is being lulled into inaction by current successes or failures
  • 6. • Planning improves coordination and control• Planning improves time management
  • 7. 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
  • 8. 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
  • 9. Procedure/ Rule: precisely describes actions to take in specific situations• Budgets are plans that commit resources to activities
  • 10. • 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
  • 11. • Goal setting helps align plans and activities throughout an organization
  • 12. How do managers formulate and implement strategies?
  • 13. SWOT
  • 14. Porter’s Five-process model examines industry attractiveness
  • 15. Controls and Control Systems Chapter 6
  • 16. 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
  • 17. • Control begins with objectives and standards
  • 18. 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
  • 19. • Control takes corrective actions as neededManagement by exception: focuses attention on differences between actual and desired performance
  • 20. What types if controls are used by managers?• Managers use feedforwad, concurrent, and feedback results
  • 21. 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
  • 22. 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
  • 23. 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
  • 24. • Managing objectives is a way to integrate planning and controlling
  • 25. 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
  • 26. 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
  • 27. 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
  • 28. 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
  • 29. • Critical path
  • 30. • 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
  • 31. • 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.
  • 32. • Financial ratios measure key areas of financial performance
  • 33. • Balanced scorecards help top managers exercise strategic controlBalanced scorecard: measures performance on financial, customer service, internal process, and innovation and learning goals
  • 34. Strategy and Strategic Management Chapter 7
  • 35. 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
  • 36. • 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
  • 37. 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
  • 38. • 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
  • 39. • 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
  • 40. • E-business strategies focus on using the internet for business strategies
  • 41.  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
  • 42. How do managers formulate and implement strategies?• The strategic management process formulates and implements strategies
  • 43. Strategic management: process of formulating and implementing strategiesStrategic formulation: process of creating strategiesStrategic implementation: process of putting strategies into action
  • 44. • Strategy formulation begins with organizations mission and objectives Mission: organizations 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
  • 45. • Porter’s Five-process model examines industry attractiveness
  • 46. • 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
  • 47. • 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