2. P la n n in g
D e f in e d
• Defining the organization’s objectives or goals
• Establishing an overall strategy for achieving
those goals
• Developing a comprehensive hierarchy of plans
to integrate and coordinate activities
P la n n in g is c o n c e r n e d w it h
e n d s ( w h a t is t o b e d o n e ) a s w e ll
a s w it h m e a n s ( h o w it is t o b e
done ).
3. Planning and Performance
The Relationship Between Planning And Performance
Formal planning is associated with:
Higher profits and returns on assets.
Positive financial results.
4. Reasons Because of changes in environment
For Planing
Provides Reduces
direction Uncertainty
Managers
engage in
planing to
Sets the :
standards for Minimizes waste and
controlling redundancy
5. Ty p e s o f p la n n in g
I n f o r m a l : not written down, short-
term focus; specific to an
organizational unit.
F o r m a l : written, specific, and
long-term focus, involves shared
goals for the organization.
6. Forma l
P la n n in g :
• Planning may create rigidity.
• Plans can’t be developed for a dynamic
environment.
• Formal plans can’t replace intuition and creativity.
• Planning focuses managers’ attention on today’s
competition, not on tomorrow’s survival.
• Formal planning reinforces success, which may
lead to failure.
7. Elements of Planning
Goals (also Objectives)
Desired outcomes for individuals, groups, or entire organizations
Provide direction and evaluation performance criteria
Plans
Documents that outline how goals are to be accomplished
Describe how resources are to be allocated and establish activity
schedules
8. Types of Goals
Financial Goals
Are related to the expected internal financial
performance of the organization.
Strategic Goals
Are related to the performance of the firm relative to
factors in its external environment (e.g., competitors).
10. P la n n in g :
F o c u s a n d Tim e
S t r a t e g ic p la n s
Plans that are organization-wide, establish overall
objectives, and position an organization in terms of its
environment
Ta c t i c a l p l a n s
Plans that specify the details of how an organization’s
overall objectives are to be achieved
S h o r t -t e r m p la n s
Plans that cover less than one year
L o n g -t e r m p la n s
Plans that extend beyond five years
11. Strategic Planning
Strategic plans
Apply broadly to the entire organization
Establish the organization’s overall objectives
Seek to position the organization in terms of its
environment
Provide direction to drive an organization’s efforts to
achieve its goals.
Serve as the basis for the tactical plans.
Cover extended periods of time
Are less specific in their details
12. Tactical Planning
T a c t ic a l p la n s ( o p e r a t io n a l p la n s )
Apply to specific parts of the organization.
Are derived from strategic objectives
Specify the details of how the overall objectives are to
be achieved.
Cover shorter periods of time
Must be updated continuously to meet current
challenges
13. Specific and Directional
Plans
S p e c if ic p la n s
Plans that have clearly defined objectives and leave no
room for misinterpretation
“What, when, where, how much, and by whom” (process-
focus)
D ir e c t io n a l p la n s
Flexible plans that set out general guidelines
“Go from here to there” (outcome-focus)
15. Single-Use and Standing
Plans
S in g le -u s e p la n s
A plan that is used to meet the needs of a particular or
unique situation
Single-day sales advertisement
S t a n d in g p la n
A plan that is ongoing and provides guidance for
repeatedly performed actions in an organization
Customer satisfaction policy
16. Establishing Goals and
Developing Plans
Traditional Goal Setting
Broad goals are set at the top of the organization.
Goals are then broken into sub-goals for each
organizational level.
Assumes that top management knows best because
they can see the “big picture.”
Goals are intended to direct, guide, and constrain from
above.
Goals lose clarity and focus as lower-level managers
attempt to interpret and define the goals for their areas
of responsibility.
18. Management by Objectives
Management by Objectives (MBO)
A system in which specific performance objectives are
jointly determined by subordinates and their
supervisors, progress toward objectives is periodically
reviewed, and rewards are allocated on the basis of
that progress.
Links individual and unit performance objectives at all
levels with overall organizational objectives
Focuses operational efforts on organizationally
important results.
Motivates rather than controls
20. Elements of MBO
• Goal specificity
• Participative decision
making
• Explicit time period for
performance
• Performance
feedback
21. Does MBO Work?
Reason for MBO Success
Top management commitment and involvement
Potential Problems with MBO Programs
Not as effective in dynamic environments that require
constant resetting of goals.
Overemphasis on individual accomplishment may
create problems with teamwork.
Allowing the MBO program to become an annual
paperwork shuffle.
22. Characteristics of Well-Designed
Goals
Written in terms of outcomes, Challenging yet attainable
not actions Low goals do not motivate.
Focuses on the ends, not the High goals motivate if they can
means. be achieved.
Measurable and quantifiable Written down
Specifically defines how the Focuses, defines, and makes
outcome is to be measured goals visible.
and how much is expected. Communicated to all
Clear as to time frame necessary organizational
How long before measuring members
accomplishment. Puts everybody “on the same
page.”
23. S . M . A . R . T.
The acronym S.M.A.R.T.
outlines the set of criteria that
your goal must follow in order
for it to be a well- focused and
achievable goal.
24. Specific
S Do you know what you want to
accomplish with all the details?
Measurable Are you able to assess your
M progress?
Attainable
A Is your goal within your reach
given your current situation?
Relevant
R Is your goal relevant towards
your purpose in life?
T Time Sensitive
for completing your goal?
What is the deadline
25. Steps in Goal Setting
t R e v ie w t h e o r g a n iz a t io n ’ s m is s io n s t a t e m e n t .
D o g o a ls r e f le c t t h e m is s io n ?
E v a lu a t e a v a ila b le r e s o u r c e s .
A r e r e s o u r c e s s u f f ic ie n t t o a c c o m p lis h t h e
m is s io n ?
f D e t e r m in e g o a ls in d iv id u a lly o r w it h o t h e r s .
A r e g o a ls s p e c if ic , m e a s u r a b le , a n d t im e ly ?
i W r it e d o w n t h e g o a ls a n d c o m m u n ic a t e t h e m .
Is e v e r y b o d y o n t h e s a m e p a g e ?
t R e v ie w r e s u lt s a n d w h e t h e r g o a ls a r e b e in g m e t .
W h a t c h a n g e s a r e n e e d e d in m is s io n , r e s o u r c e s ,
26. Developing Plans
Contingency Factors in A Manager’s Planning
Manager’s level in the organization
Strategic plans at higher levels
Operational plans at lower levels
Degree of environmental uncertainty
Stable environment: specific plans
Dynamic environment: specific but flexible plans
27. P la n n in g in t h e
H ie r a r c h y o f
O r g a n iz a t io n s
28. Strategic Management
W h a t m a n a g e r s d o t o d e v e lo p t h e
o r g a n iz a t io n ’ s s t r a t e g ie s .
S t r a t e g ie s
T h e d e c is io n s a n d a c t io n s t h a t
d e t e r m in e t h e lo n g -r u n
p e r f o r m a n c e o f a n o r g a n iz a t io n .
29. Strategic Management
Strategic Management Process
A nine-step process that involves strategic planning,
implementation, and evaluation
The organization’s current identity
Mission statement
Defines the purpose of the organization
Objectives
Strategic plan
A document that explains the business founders vision and
describes the strategy and operations of that business.
31. Analyze the Environment
Environmental scanning
Screening large amounts of information to detect
emerging trends and create a set of scenarios
Competitive intelligence
Accurate information about competitors that allows
managers to anticipate competitors’ actions rather than
merely react to them
32. SWOT: Identifying
Organizational
Opportunities
SWOT analysis
Analysis of an organization’s
strengths, weaknesses,
opportunities, and threats in
order to identify a strategic
niche that the organization
can exploit
34. SWOT Analysis
S t r e n g t h s ( s t r a t e g ic )
In t e r n a l r e s o u r c e s t h a t a r e a v a ila b le o r
t h in g s t h a t a n o r g a n iz a t io n d o e s w e ll
C o r e c o m p e t e n c y : a u n iq u e s k ill o r
r e s o u r c e t h a t r e p r e s e n t s a c o m p e t it iv e
edge
We a k ne s s e s
R e s o u r c e s t h a t a n o r g a n iz a t io n la c k s o r
a c t iv it ie s t h a t it d o e s n o t d o w e ll
O p p o r t u n it ie s ( s t r a t e g ic )
P o s it iv e e x t e r n a l e n v ir o n m e n t a l f a c t o r s
Thre a ts
N e g a t iv e e x t e r n a l e n v ir o n m e n t a l f a c t o r s
35. Grand Strategies
G ro w th s tra te g y
A s t r a t e g y in w h ic h a n o r g a n iz a t io n
a t t e m p t s t o in c r e a s e t h e le v e l o f it s
o p e r a t io n s ;
R e tre nc hme nt s tra te g y
A s t r a t e g y c h a r a c t e r is t ic o f a c o m p a n y
t h a t is r e d u c in g it s s iz e , u s u a lly in a n
e n v ir o n m e n t o f d e c lin e
C o m b in a t io n s t r a t e g y
T h e s im u lt a n e o u s p u r s u it b y a n
o r g a n iz a t io n o f t w o o r m o r e o f g r o w t h ,
s t a b ilit y , a n d r e t r e n c h m e n t s t r a t e g ie s
S t a b ilit y s t r a t e g y
A s t r a t e g y t h a t is c h a r a c t e r iz e d b y a n
a b s e n c e o f s ig n if ic a n t c h a n g e
36. Growth Strategies
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
37. Competitive Strategies
Strategies that position an organization in such a way
that it will have a distinct advantage over its
competition
Cost-leadership strategy
Becoming the lowest-cost producer in an industry
Differentiation strategy
Attempting to be unique in an industry within a broad market
Focus strategy
Attempting to establish an advantage (cost/differentiation) in
a narrow market segment
38. Benchmarking
Benchmarking
The search for the best practices among competitors or
noncompetitors that lead to their superior performance
ISO 9000 series
Standards designed by the International Organization
for Standardization that reflect a process whereby
independent auditors attest that a company’s factory,
laboratory, or office has met quality management
standards
