Business Planning Strategies Quiz

Planning Types

• Informal Planning: Characterized by unwritten goals, limited sharing, and lack of continuity.
• Formal Planning: Involves written goals, defined action programs for achieving goals.

Planning Approaches

• Inclusive Approach: Employees at all levels participate in planning, leading to a greater understanding of its importance and improved organizational efficiency and effectiveness.

How Managers Plan

• Steps in Goal Setting:
  • Review organizational mission.
  • Evaluate available resources.
  • Determine goals individually or collaboratively.
  • Ensure goals align with organizational mission and other areas.
  • Write and communicate goals to relevant parties.
  • Review results and goal achievement.

Planning Process Terminology

• Mission: The organization's fundamental purpose.
• Goal: A future target or desired outcome.
• Plan: The method for reaching a goal.

Organizational Mission

• May be unwritten.
• Addresses factors like customers, products/services, location, technology, survival, public image, employee concerns.

Organizational Goals

• Benefits: Increased performance, clarified expectations, facilitated control, increased motivation.
• Levels: Top managers (organizational perspective), Middle managers (departmental perspective), First-level managers (unit/individual perspective).

Goals and Performance

• Key Aspects: Goal content, goal commitment, work behavior, other process components, potential problems.
• Goal Content: Should be challenging, specific, measurable, attainable, relevant, and time-limited.
• Goal Commitment: Influenced by supervisory authority, peer/group pressure, public display, success expectations, incentives/rewards, and participation.
• Goals & Work Behaviour: Affect direction, effort, and persistence.
• Goals & Other Process Components: Job knowledge/ability, task complexity, and situational constraints also influence performance.
• Potential Problems: Excessive risk taking, increased stress, undermined confidence, ignored non-goal areas, short-term thinking, dishonesty.

Levels of Goals and Plans

• Operational: Short-term goals and plans.
• Tactical: Intermediate-term goals and plans.
• Strategic: Long-term goals and plans.

Linking Goals & Plans

• Recurring use: Standing plans (policies, procedures, rules).
• Single use: Special-purpose plans.
• Management by Objectives (MBO): A process where specific goals are collaboratively set for the entire organization and each unit, and used for planning and performance assessment.

MBO Process

• Develop organizational goals.
• Set specific departmental goals.
• Formulate action plans.
• Implement and manage self-control.
• Review progress periodically.
• Appraise performance.

MBO Strengths

• Helps link goals and plans.
• Clarifies priorities and expectations.
• Fosters communication.
• Builds motivation.

MBO Weaknesses

• Needs strong commitment.
• Requires manager training.
• Can be misused.
• Risk of emphasizing quantitative goals solely.

Strategic Management

• Large-scale action plan for interacting with the environment to achieve long-term goals.
• Process: Managers formulate and implement strategies to optimize goal achievement.

Strategy Formulation

• Identify mission and goals.
• Analyze competitive situation (internal and external).
• Develop strategies to achieve goals.

Strategy Implementation

• Implement plans.
• Monitor and control plan execution.

Importance of Strategic Management

• Develops competitive advantage.
• Provides long-term direction.
• Emphasizes innovation.
• Involves members, fostering understanding.

Strategic Planning Process Components

• Distinctive competence: An organization's exceptional strengths.
• Scope: The range of markets the organization will compete in.
• Resource deployment: How resources are distributed across competitive areas.

Competitive Analysis

• SWOT analysis: Assessing strengths, weaknesses, opportunities, and threats.
• Environmental assessment (Porter's Five Forces): Analysis of industry rivalry, customer and supplier bargaining power, threat of new entrants, and threat of substitutes.

Levels of Strategy

• Corporate level: Addresses businesses the organization operates.
• Business level: Focuses on best competitive strategies within a particular business.
• Functional level: Action plans for functional areas.

Portfolio Strategies

• BCG Growth-Share Matrix: Compares businesses based on market share and growth rate.
• Product-Market Evaluation Matrix: Compares business strengths against product/market life cycle.

Grand Strategies

• Growth: Concentration, vertical integration, diversification.
• Stability: Harvest, turnaround.
• Defensive: Divestiture, bankruptcy, liquidation.

Generic Business Strategies (Porter)

• Cost leadership: Lowers costs compared to competitors.
• Differentiation: Develops unique products/services.
• Focus: Focuses on a specific market segment.

Strategy Implementation

• Management activities to put strategies into action.
• Strategic controls for monitoring progress.

Entrepreneurship

• Entrepreneur: Person engaged in planning, organizing, operating, and assuming risk of a business venture.
• Small business: Privately owned, with sales/assets not large enough to influence the environment.

Business Plan Components

• Business goals and objectives.
• Strategies for achieving objectives.
• Plan for implementing strategies.

Financing New Businesses

• Personal resources.
• Strategic alliances.
• Lenders.
• Venture capital.

Entrepreneurship in Society

• Job creation.
• Innovation promotion.

Intrepreneurship

• Encouraging entrepreneurial roles within organizations.

Organizing

• Grouping organizational activities/resources effectively.

Responsibilities, Authority, Accountability

• Responsibility: Obligation to carry out duties and achieve goals.
• Authority: Right to make decisions, act, direct.
• Accountability: Requirement to justify deviations from duties/results.

Delegation & Autonomy

• Delegation: Assigning parts of a manager's work to others.
• Autonomy: Degree of discretion allowed in determining schedules/work methods.

Feedback and Organizational Charts

• Feedback: Information about performance results.
• Organizational Chart: Diagram of an organization's structure.

Organization Structure

• Formal pattern of interactions/coordination: Linking individuals/groups to achieve goals.
• Four elements: Task/responsibility assignment, hierarchical clustering, vertical coordination, horizontal coordination

Job Design

• Determining work-related responsibilities.
• Specifying task activities associated with a job.
• Job Specialization: Breaking down work into smaller components.

Departmentalization

• Grouping jobs logically.
• Rationale: Organizational growth exceeding owner-manager capacity.
• Basic Types: Functional, product, customer, location.

Functional Departmentalization

• Grouping positions by specialized areas.

Advantages and Disadvantages of Functional Departmentalization

• Advantages: Expertise staffing; facilitated supervision; easier coordination.
• Disadvantages: Slow decision making; loss of sight of organizational goals; difficulty in monitoring accountability and performance.

Customer and Geographic Departmentalization

• Customer: Tailored to customer needs.
• Geographic: Responding to market area demands.

Matrix Departmentalization

• Efficient management of complex tasks.

Chain of Command and Span of Management

• Chain of Command: Vertical line of authority.
• Span of Management (Span of Control): Number of people reporting to a manager.

Tall vs. Flat Organizations

• Tall: More expensive, complex communication.
• Flat: Higher employee morale/productivity, greater managerial responsibility.

Centralization vs. Decentralization

• Centralization: Primary authority in upper management.
• Decentralization: Significant authority at lower levels.

Coordination and Line/Staff Positions

• Coordination: Linking departmental activities.
• Line positions: Direct chain of command, responsible for goals.
• Staff positions: Provide expertise/support to line positions.

Job Design Techniques

• Job rotation: Periodic movement between specialized jobs.
• Job enlargement: Increasing the number of tasks.
• Job enrichment: Adding more tasks/authority.

Organization Design (OD)

• Continuous change in organizations.
• Design for complex organizations with variations.
• Implements strategies to achieve goals.

Influences on Organization Design

• Core Technology: Conversion processes.
• Stable vs. Unstable Environments: Impact on organization structure.

Organization Design Structures

• Mechanistic: Bureaucratic, stable environments.
• Organic: Flexible, informal, unstable environments.

Emerging Organization Design Issues

• Team organization: Project-based teams.
• Virtual organization: Minimal formal structure, few permanent employees.
• Learning organization: Facilitates lifelong learning and transformation.

Leading, Motivating, and Leadership

• Leadership: Influencing others to achieve organizational goals.
• Motivation: Force energizing, directing human behavior.

Motivation Theories

• Content theories: What motivates us?
• Process theories: Why and how motivation occurs?
• Reinforcement theory: How outcomes influence behavior?

What is Motivation?

• Intensity, direction, and persistence of effort toward a goal.

Motivation Concepts

• Intrinsic vs Extrinsic Motivation.
• Maslow's Hierarchy of Needs: Physiological, Safety, Social, Esteem, Self-actualization.
• Herzberg's Two-Factor Theory: Hygiene factors (prevent dissatisfaction) and motivators (stimulate satisfaction).
• ERG Theory: Existence, Relatedness, Growth.
• McClelland's Acquired Needs Theory: Need for achievement, power, affiliation.

Equity Theory

• Employees compare their O/I ratios to others' to assess perceived fairness.
• Reactions to perceived inequity: Underreward – reduce inputs, increase outcomes, rationalize, change referent, leave; Overreward – increase inputs, decrease outcomes, rationalize, rationalization or perception distortion.

Expectancy Theory

• Motivation depends on the belief that effort leads to performance, performance leads to rewards, and rewards satisfy personal goals

Goal-setting Theory

• Specific, challenging, and achievable goals increase performance.