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The fundamentals in this slide presentation are important in understanding the concept of planning, the various types of plans, and the strategic management process

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  1. 1. Planning<br />Fundamentals of Management<br />Source: Management by Richard Daft (2005)<br />
  2. 2. Definition<br />Planning<br />
  3. 3. Planning<br />A plan is a blueprint for action. It specifies :<br /> resource allocations<br />schedules<br />actions necessary for attaining goals<br />A goal is a desired future state that an organization attempts to realize.<br />Planning is the act of determining the organization’s goals and the means for achieving them.<br />
  4. 4. Planning<br />Why is planning important to managers ?<br />To determine new opportunities<br />To anticipate and avoid future problems<br />To develop effective courses of action (strategies and tactics)<br />To comprehend the uncertainties and risks with various options.<br />To set standards<br />
  5. 5. Planning<br />
  6. 6. Organizational Mission<br />Mission – the organization’s reason for existence.<br />The mission describes as well the organizations values and aspirations.<br />Mission statement is a broad statement defining the organization’s basic business scope and operations that distinguishes it from its competition.<br />Sagicor is committed to being an outstanding corporate citizen, providing financial services that create value for our customers, excellent returns to our shareholders, the highest quality of work life and the opportunity for personal and professional development of our staff and financial advisors.<br />
  7. 7. Mission Statement<br />A mission statement often answers basic questions :<br />What business are we in?<br />Who are we?<br />What are we doing?<br />
  8. 8. Organizational mission<br />Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity. (Pepsico)<br />
  9. 9. Strategic plans<br />Strategic plans define the action steps by which the organization intends to achieve its goals. <br />Strategic goals are broad goals of where the organization wants to be in the future. These goals pertain to the whole organization. <br />Strategic goals examples:<br /><ul><li>15% return on investment and 5% growth
  10. 10. No layoffs</li></li></ul><li>Tactical Plans<br />Tactical plans are plans to help the organization execute its strategic goals and to accomplish a specific part of the company’s strategy.<br />Tactical Goals define the outcomes of that major divisions and departments must achieve in order for the organization to reach its goals.<br />Example of tactical plans:<br />Manufacture 1,000,000 units at an average cost of $ 10.00<br />
  11. 11. Differences between strategic and tactical plans<br />Strategic<br />Tactical<br />Ensure long-term effectiveness and growth<br />Length: Usually two or more years<br />Plans are done every one to three years<br />Primarily done by top management<br />It is used as a means to implement strategic plans.<br />Length: Short-term<br />Plans are done every six months to a year<br />Primarily done by employees up to middle management<br />
  12. 12. Operational Plans<br />These plan are specific and measure departmental results. Operational plans are usually done on a daily or weekly basis.<br />Operational plans define the outcomes of the divisions or departments.<br />Operational goal<br /><ul><li>Visit one new customer each day
  13. 13. Have machines downtime of less than 7%</li></li></ul><li>Types of Plans <br /><ul><li>Single-use plan
  14. 14. Standing plans
  15. 15. Contingency plans</li></li></ul><li>Single-use plans<br />Plans for attaining a one-time organizational goal.<br />Large in scope<br />Examples: building a new headquarters<br />Installing a new accounting system<br />Projects are including in this category of planning<br />
  16. 16. Standing plans <br />Standing plans are ongoing plans that are used to provide guidance for tasks performed repeatedly within an organization.<br />Policy (sexual harassment policy)<br />Broad<br /> based on organizational goals<br /> define boundaries with in which to make decisions<br />Rules (no smoking in class)<br />Narrow<br />Define specific action<br />Procedures ( employee grievances)<br />Define a precise series of steps to attain certain goals<br />
  17. 17. Contingency plans<br />Plans that define company responses to specific situations, for example emergencies or unexpected conditions.<br />
  18. 18. Strategic management <br />Strategy is a plan of action that prescribes resource allocation and activities for dealing with the environment, achieving the competitive advantage, and attaining organizational goals. <br />
  19. 19. Strategic management <br />Set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment to achieve organizational goals.<br />Types of strategies<br />Grand strategy<br />Growth strategy<br />Stability strategy<br />Retrenchment strategy<br />Global strategy<br />Multidomestic strategy<br />Transnational strategy<br />
  20. 20. Grand Strategy<br />The general plan of major action by which an organization intends to achieve its long-term goals.<br />Internal growth<br />Development of new products<br />Expansion of new products or services into new markets<br />Diversification<br />Acquisition<br />mergers<br />
  21. 21. Stability strategy<br />Maintaining the same size of the organization or grow slowly in a controlled fashion.<br />
  22. 22. Retrenchment strategy<br />The organization is force to reduce its size by selling off business units or liquidating entire business<br />Liquidation – terminating a business unit by selling the business unit for cash value of its assets.<br />Divestiture – selling business unit that is no longer considered as central to the organization<br />
  23. 23. Global strategy<br /><ul><li>Standardization of product design and advertising strategies throughout the world
  24. 24. Treats world as a single market</li></li></ul><li>Multinational<br />Modification of products design and advert sizing strategies to suit the specific needs of individual countries<br />
  25. 25. Transnational strategy<br />A transnational strategy seeks to achieve global integration and national responsiveness.<br />The objective : to attain efficiency and flexibility to meet specific needs in various countries<br />
  26. 26. Levels of strategy<br /><ul><li>Corporate-level strategy
  27. 27. Business-level strategy
  28. 28. Functional-level strategy</li></li></ul><li>Levels of strategy<br />
  29. 29. Levels of strategy<br />Corporate-level strategy<br />Pertains the whole organization <br />The business units<br />Product lines<br />It asks the question:<br />What business are we in?<br />
  30. 30. Business-level strategy<br />Pertains to each business unit or product line.<br />Focuses on how the business units compete within the industry for customers. Business-level strategies are concern with the following:<br />Advertising<br />Product changes<br />New product line development<br />Equipment and facilities<br />
  31. 31. Business-level strategy<br />Porter’s Competitive Forces<br />Potential new entrants<br />Rivalry among competitors<br />Bargaining power of buyer<br />Threat of substitute products<br />Bargaining power of suppliers<br />
  32. 32. Functional-level strategy<br />Pertains to the organization’s functional departments finding ways of how to support the business-level strategy<br />Functional departments : <br />Finance<br />Research and development<br />Marketing<br />manufacturing<br />
  33. 33. Strategic management process<br />
  34. 34. Strategic management process<br />Scan external environment<br />Evaluate current<br /><ul><li>Mission
  35. 35. Goals
  36. 36. Strategies</li></ul>SWOT<br />Set new mission, goals, grand strategy<br />Formulate strategy<br />Implement strategy<br />Scan internal environment<br />Strategic planning<br />

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The fundamentals in this slide presentation are important in understanding the concept of planning, the various types of plans, and the strategic management process


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