Planning Lecture Notes PDF

Planning Outline  Introduction to Planning  Strategy and Tactics  Strategic Management  External Environment 2 Definition  A basic management function involving formulation of one or more detailed plans to achieve optimum balance of needs or demands with the...

Planning Outline  Introduction to Planning  Strategy and Tactics  Strategic Management  External Environment 2 Definition  A basic management function involving formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources. 3 Planning Planning is concerned with ends (what is to be done) as well as with means (how it is to be done).  Establishing an overall strategy for achieving those goals Reasons for Planning Who Plans ?  Although ultimate responsibility for planning lie with certain managers within the organization, all managers & many non – managerial employees participate in planning process. 6 Planning Terms  An informal business plan nothing is written down, and there is little or no sharing of goals with others in the organization. This types of planning often is done in many small business where the owner- manger has a vision of where he or she want business to go.  Formal business planning specific goals cover a period of years are defined. These goals are written down and shared with organizational members. Specific documented action programs exist for the achievement of these goals. Workshop 1  Differ between informal and formal plan Specific and Directional Plans  Specific Plans  Clearly defined objectives and leave no room for misinterpretation.  “What, when, where, how much, and by whom” (process- focus)  Directional Plans  Are flexible plans that set out general guidelines.  “Go from here to there” (outcome-focus) Single-Use and Standing Plans  Single-Use Plan  Is used to meet the needs of a particular or unique situation.  single-day sales advertisement  Standing Plan  Is ongoing and provides guidance for repeatedly performed actions in an organization.  satisfaction policy Workshop 2  With your team,  What are different types of plans? Planning Elements Common Elements in Planning Participative Explicit Goal Performance Decision Performance Specificity Feedback Making Period Cascading of Objectives Workshop 3  With your team,  Develop a plan on the top management level and cascade it to the organization giving responsibilities to each level? Criticisms Of Formal Planning  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. Workshop 4  Does Planning Improve Organizational Performance? The Bottom Line: Does Planning Improve Organizational Performance?  Formal planning means higher profits, higher return on assets, and other positive financial results.  When external environment restrictions allowed managers few alternatives, planning did not lead to higher performance. Strategic Management Process 18 Planning: Strategic Tactical Plans Short-term Long-term Plans Plans Plans Are organization- Specify the details Cover less than Extend beyond wide, establish of how an one year. five years. overall objectives, organization’s and position an overall objectives organization in are to be achieved. terms of its environment. 19 Workshop 5  With your team define what is a strategy 20 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. Tactical Planning  Tactical Plans (Operational Plans)  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.  Growth Strategies Strategies for Growth Direct Merger Acquisition Expansion  Competitive Strategies Strategies for Competitive Advantage Cost Differentiation Focus Leadership Workshop 9  Discuss how did competition start and how did it change through time?  Discuss what is globalization and how does it affect competition worldwide. 25 Example