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  1. 1. PLANNINGPlanning MEMBANTU anda MENETAPKANHALA TUJU..BILA PLAN KENA ADA GOALS ANDOBJECTIVEWhat is planning…..  Planning is a process for accomplishing purposes.  It is a blue print of business growth and a road map of development.  It helps in deciding objectives both in quantitative and qualitative terms.  It is setting of goals on the basis of objectives and keeping in the resources.  It is concerned what is to be done and how it’s to be done.  It specifies specific goals covering a specific time period.  These goals that we mentioned are written down and made available to organization members.  Planning is the process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the goals.  When we use the term planning, we are actually implying to formal planning.TYPES OF PLANNING  Informal : not written down, short-term focus; specific to an organizational unit.  Formal : written, specific, and long-term focus, involves shared goals for the organization.Importance of the planning process
  2. 2. A. A plan can play a vital role in helping to avoid mistakes or recognize hidden opportunities. Preparing a satisfactory plan of the organization is essential. B. Planning helps in forecasting the future, makes the future visible to some extent. It bridges between where we are and where we want to go. Planning is looking ahead.4 REASONS WHY MANAGERS SHOULD FORMALLY PLANFIRSTLY….  Planning establishes coordinated effort. This means....When all organizational members understand where organization is going and they must contribute to reach the goals, they began to coordinate their activities and thus fostering teamwork and cooperation.  It gives direction to managers and non managerial employees.SECOND….  Planning may help to reduce uncertainty by forcing managers to look ahead, anticipate changes, consider the impact of change and develop appropriate responses.  Planning is what managers need in a changing environment.THIRD….  Planning reduces overlapping and wasteful activities.  When work or activities are coordinated, wasteful activities can be eliminated.  WhenFOURTH….  Planning establishes goals  When managers plan, they develop goals and plans. Without planning, there would be no goals against which to measure or evaluate work efforts. Reasons for planning an overview….Provide Direction Reduces Managers engage redundancy and in planning to…. minimize waste
  3. 3. CRITICISMS OF PLANNING1. Planning may create rigidity Formal planning can lock organization in achieving goals within a specific time. Let us assume( anggap).. …when goals were set we assume that the external environment will not change. If the assumption is wrong.. then managers who follow a plan may face trouble. This is because…. If you force a course of action when the environment is uncertain it may cause disaster2. Formal plans can’t replace intuition and creativity Planning should enhance and support intuition and creativity, not replace it. Planning requires us to investigate organization’s capabilities and opportunities and this may reduce some typically routine programme. We have discussed regarding APPLE Computer.3. Planning focuses managers attention on today’s competition, not on tomorrow’s survival Formal Planning has a tendency to focus on how to best capitalize on existing business opportunities within the industry. Managers do not look at ways to recreate or reinvent the industry… So.. when panning they should look at the untapped opportunities as well.4. Plans can’t be developed for a dynamic environment. NORMALLY …when we plan, we assume that the business environment won’t change. BUT… in today’s business environment it is always unpredictable. AND.. managing under these environment conditions means that we must be flexible and not tied to formal plans.5. Formal planning reinforces success, Which may lead to failure True…. Formal planning can lead to success but it can also lead to failure.. why?... Success may fail in an uncertain environment
  4. 4.  Its hard to change a successful plan and leave the comfort of what works (tinggalkan apa yang dah berjaya.. memang susah ) BUT.. manage still needs to fbe more open in doing things new ways to be more successful. TYPES OF PLANNINGMost popular ways to describe plans are in terms of : BREADTH (STRATEGIC PLANS versus TACTICAL PLANS ( sometimes referred to Operational plans) STRATEGIC PLANS - Apply to the entire organization and encompass ( include) the organization’s overall goal. - Example: When McDonald found its Red Box kiosk business was a result of a strategic planning. TACTICAL PLANS ( sometimes referred to Operational Plans) - Specify the details of how overall goals are to be achieved. - Example: Deciding when, where and how to actually operate was the result of tactical plans.TIME FRAME (SHORT versus LONG TERM) - The number years used is to define short and long term plans.LONG TERM - Plans with a time frame beyond 3 yearsSHORT TERM - Cover 1 year or less.SPECIFITY ( SPECIFICITY versus DIRECTIONAL PLANS)SPECIFICITY PLANS - Plans that are clearly defined. - Example :let say I am the manager who wants to increase the unit output by 6%....for the next 12 mths…and to reach this goal I will have to SPECIFY specific procedures and work schedules to achieve that goal.
  5. 5. DIRECTIONAL PLANS - Flexible plans that set general guidelines. - Example: Instead of me as the manager cut costs by 4% to increase revenue by 6%.. in the next 6 mths..I might formulate a directional plans for improving profits by 5-10% over the next six mths.FREQUENCY OF USE ( SNGLE-USE versus STANDING PLANS)SINGLE USE PLAN - A one time plan specifically designed to meet the needs of a unique situation.STANDING PLANS - Ongoing plans that provide guidance for activities performed repeatedly. - Example: When you register at KPMSI next sem, u will be using the same standardized registration procedure………. Process remains the same each semester its just the date and time that changes. MANAGEMENT BY OBJECTIVE o Emphasis on converting overall organizational objectives into specific objectives for units and members of the organization. o It’s a system where performance objective are jointly and determined by employees and managers. o The progress toward objectives is periodically reviewed( reviewed several times ), and rewards are allocated on the basis of that progress. o As the figure above shows, the organization’s overall objectives are translated into specific objectives for each succeeding level (divisional, departmental, or individual) in the organization.
  6. 6. o But because lower-unit managers jointly participate in setting their own goals, MBO works from the “bottom-up” as well as from the “top down.” o The result is a hierarchy of objectives that links objectives at one level to those at the next level. And for the individual worker, MBO provides specific personal performance objectives. o So each person has an identified specific contribution to make to his or her unit’s performance. If all individuals achieve their goals, then their unit’s goals will be attained and the overall objectives of the organization will become a reality. ELEMENTS OF MBO4 ELEMENTS : 1. Goal specificity - MBO objectives should be concise statements of expected accomplishments. - It’s not enough to only state the desire.. for example.. improve service, cut costs …It should be converted into tangible objectives that can be measured and evaluated: for example, to cut costs by eight percent. 2. Participative decision making - The objectives of MBO are not unilaterally set by the boss and then assigned to subordinates. - Superior and subordinate jointly choose the goals and agree on how they will be measured. 3. Explicit time period for performance - Each objective has a specific time period in which it is to be completed. - Managers have not only specific objectives but also stipulated time periods in which to accomplish them. 4. Performance feedback - MBO seeks to give continuous feedback on progress toward goals so that individuals can monitor and correct their own actions. - Continuous feedback, supplemented by more formal periodic management evaluations, takes place at all levels of the organization.
  7. 7. STRATEGIC MANAGEMENTWhat manager’s do to develop an organization’s strategies.So what is organization;s strategies?.... Thye’re the plans how the organization will do what it’s inbusiness to do and how it will complete successfully.WHY IS IT IMPORTANT?.... 1. It can make a difference in how well an organizations performs… Example…. Plrese refer to your text book.. on Teen retailer pg. 112…. 2. Managers face with uncertainty or the changing situations… so by using strategic management.. it helps them to examine relevant factors in planning future actions. 3. Organizations are comples and diverse and each part needs to work together to achieve org goals…. 4. Example: pg 113… the case of wall mart….THE 6 STEPS IN STRATEGIC MANAGEMENT PROCESS 1. IDENTIFYING THE ORGANIZATIONS’S CURRENT MISSION GOALS AND STRATEGIES… - Organization needs a mission - Defines the present purpose of the organization. - Example: Institut Jantung Negara mission is to ‘reduce suffering and death from heart, stroke and high blood pressure. This statement provides clues to what these organizations see as their purpose. 2. DOING AN EXTERNAL ANALYSIS - Managers need to do an external analysis for instance, to know what the competitors is doing or what the labor supply is like where it operates. - It also helps managers see the trends and changes . - From the analysis, managers can pin out the Opportunities they can exploit and Threat they can exploit. 3. DOING AN INTERNAL ANALYSIS - Provides important information about company’s resources and capabilities.
  8. 8. - **Resources are its assets- financial, human-that it uses to develop, manufacture and deliver products to customer. - **Capabilities- skills and abilities in doing the work activities needed in its business. - After completing the internal analysis, managers should be able to identify organization strengths and weaknesses. - ** Strength – any activities organization does well - ** Weaknesses- any activities organization does not do well. - If you combine external and internal analysis its called THE SWOT ANALYSIS. - Once you’ve completed SWOT analysis, you would be able to formulate appropriate strategies: - 1. Exploit organizations strength and external opportunities. - 2. Protect organization from external threat. - 3. Correct critical weaknesses. 4. FORMULATING STRATEGIES - Before formulating strategies, managers consider the organization resources and capabilities so that the design of strategies will help organization achieve its goals. - 3 main type of strategies : Corporate, Competitive and functional. 5. IMPLEMENTING STRATEGIES - Once strategy has been formulated, it should be implemented properly to see it perform well. 6. EVALUATING RESULTS - The final step to see how effective the strategies has been helping the organization reach its goals. WHAT STRATEGIES DO MANAGERS USE1. Corporate strategy - Organizational specifies what businesses a company is in or wants to be in and what it wants to do with those businesses. - Based on Organization goal and mission. - 3 main types of corporate strategy: Growth, stability and renewal. a) Growth strategy - A strategy in which an organization attempts to increase the level of its operations or expand. - Example of growth strategy: Direct Expansion  Involves increasing a company’s size, revenues, operation, or workforce. Merger  Occurs when two companies, usually of similar size, combine their resources to form a new company. Acquisition  Occurs when a larger company buys a smaller one and incorporates the acquired company’s operations into its own. **For other examples on growth strategy please read your text book page 116.**
  9. 9. b) Stability strategy- A corporate strategy in which an organization continues or maintain to do what it is currently doing.- Example: continuing service to the same client and offers the same product or services.- Company doesn’t grow but doesn’t fall behind either… it MAINTAINS… c) Renewal strategy- When an organization is in trouble something needs to be done and managers need to address the declining performance of an organization. Example : General Motor lost 31 billion in 2007.- And these strategies ar called the Renewal Strategies.- Have 2 main types : Retrenchment and Turnaround strategy 1. Retrenchment strategy  A strategy characteristic of a company that is reducing its size, usually in an environment of decline.  For minor performance problems.  Helps stabilize operations and revitalize organizations resources and capabilities and prepare to compete again. 2. Turnaround strategy  Needed when organizations faces a more drastic and major problems. 3. COMPETITIVE STRATEGY Strategies that position an organization in such a way that it will have a distinct advantage over its competiion. By using Michael Porter’s framework, management can select a strategy that gives its organization a competitive advantage. Porter named three strategies from which management may choose: A) cost-leadership strategy- When an organization aims to be the low-cost producer, it is following a cost-leadership strategy. B) Differentiation strategy - The firm that seeks to be unique in ways that are widely valued by buyers is following a differentiation strategy. C) Focus strategy - involves a cost advantage ( cost focus) or a differentiation advantage ( differentiation focus) in a narrow segment. - Example: page 118 on Vegetable Root Chips. If an organization cannot use any one of these three strategies to develop a competitive advantage, then it is stuck in the middle unless it is competing in a highly favorable market or all of its competitors are also stuck in the middle.
  10. 10. QUALITY AS A STRATEGIC WEAPON 1. Total Quality Management TQM focuses on quality and continuous improvement. If integrated into ongoing operations, incremental improvement can accumulate into a competitive advantage that others cannot steal. 2. Benchmarking What is BENCHMARKING?...- The practice of using a measurable scale to compare key business operations with those of successful organizations. - It involves four steps: 1. Form a team to identify the following: benchmarking targets, “best practices” of other organizations, and data collection methods. 2. Collect data from internal operations and external organizations. 3. Analyze data to identify performance gaps and determine their causes. 4. Prepare and implement an action plan to meet or exceed performance standards. 3. ISO 9000 Certification.. What is it?...- To show that its products meet world standards for quality management, a company must gain ISO 9000 certification.- The certificate attests that the company has met rigorous standards for quality and consistency as defined by the International Organization for Standardization in Geneva.