Business Planning Chapter 5 Flashcards

Questions and Answers

What is defined as 'setting goals and deciding how to achieve them; also coping with uncertainty by formulating future courses of action to achieve specific results'?

Strategy

Assessment

Management

Planning (correct)

What document outlines how goals are going to be met?

Plan

What is a business plan?

A document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success.

What describes a business model?

Outline of need the firm will fill, the operations of the business, its components and functions, as well as expected revenues and expenses. Signup and view all the answers

What is defined as a large-scale action plan that sets the direction for an organization?

Strategy (strategic plan) Signup and view all the answers

What does strategic management involve?

A process that involves managers from all parts of the organization in the formulation and implementation of strategies and strategic goals. Signup and view all the answers

What are the three reasons an organization should adopt planning and strategic management?

Provide direction and momentum, encourage new ideas, develop a sustainable competitive advantage. Signup and view all the answers

What is the purpose of a mission statement?

An organization's purpose or reason for being. Signup and view all the answers

What is a vision statement?

A long-term goal describing 'what' an organization wants to become. Signup and view all the answers

What is the definition of SMART goals?

A goal that is Specific, Measurable, Attainable, Results oriented, and has Target dates. Signup and view all the answers

Which of the following are true of long-term goals?

All of the above. Signup and view all the answers

True or false: One reason a company might create a bad strategic plan is because it might make incorrect assumptions about what will happen in the market going forward.

True Signup and view all the answers

What is the first step in management by objectives?

Managers and employees jointly set objectives for the employee. Signup and view all the answers

What is meant by 'cascading goals'?

The process of ensuring that strategic goals set at the top align with more specific short-term goals at lower levels within an organization. Signup and view all the answers

Study Notes

Planning and Strategic Management

Planning involves setting goals, deciding how to achieve them, and coping with uncertainties.
A plan is a document outlining how goals will be met.
A business plan details a firm's goals, strategies to achieve them, and measures of success.
Business model outlines the need the firm will fill, operations, components, expected revenues, and expenses.
Strategy or strategic plan is a large-scale action plan for an organization's direction.

Strategic Management Process

Strategic management involves all managers in formulating and implementing strategies.
Key steps in planning and strategic management include establishing mission, assessing reality, formulating strategies, implementing them, and maintaining strategic control.

Importance of Planning

Organizations adopt planning for providing direction, encouraging new ideas, and developing a sustainable competitive advantage.

Mission, Vision, and Values

Mission statements answer key questions about customers, products, competition, technology, values, strengths, and public responsibility.
Vision statements set the organization's purpose and direction, inspiring commitment and reflecting high ideals.
Values statements define an organization's core values and guiding principles for actions and decisions.

Types of Planning

Three levels of management utilize different types of planning: strategic (top management), tactical (middle management), and operational (first-line management).
Strategic planning spans one to five years and addresses long-term goals with available resources.
Tactical planning focuses on departmental contributions over six months to two years.
Operational planning defines tasks for daily operations for a period of one week to one year.

Goals and Objectives

Goals are commitments to achieve measurable results within a timeframe.
Long-term goals (1-5 years) align with strategic goals; short-term goals (up to one year) connect to long-term objectives.
Means-end chain illustrates how lower-level goals lead to higher-level goals.

Planning Tools

Operating plans detail short-term actions to achieve specific targets.
Action plans outline steps required to achieve goals.
Standing plans cater to recurring activities, while single-use plans are for unique tasks.

SMART Goals

SMART stands for Specific, Measurable, Attainable, Results-oriented, and Time-bound goals.
Management by Objectives (MBO) involves setting objectives collaboratively, developing action plans, performance reviews, and performance appraisals.

Cascading Goals

Cascading goals ensure alignment of strategic goals at the top with specific short-term objectives at lower levels in the organization.

Planning/Control Cycle

The planning/control cycle consists of four steps: make the plan, carry out the plan, compare results with the plan, and take corrective action.

Final Thoughts

Deadlines aid in focus and efficient decision-making, ensuring productivity and prioritization of important tasks.

Description

Explore key concepts from Chapter 5 related to business planning with these flashcards. Each card provides essential definitions that will enhance your understanding of setting goals and crafting successful strategies. Perfect for students looking to master the basics of business planning.