Chapter 13 Planning & Organizing

The Planning FunctionImportance of PlanningThe Organizing Function

Planning

Business Plan - a written description of the business and its operations with an analysis of the opportunity & risks it faces.Planning is the most important planning activity.– Strategic Planning - long-term and provides broad goals and direction for

the entire business. Designing a new product can take 5 years or more.• SWOT Analysis

– Operational Planning - short-term and identifies specific activities for each area of business. This type of planning determines how work will be done.

Strategic Planning Steps

Step 1: External Analysis (OT)

Step 2: Internal Analysis (SW)

Step 3: Mission Statement

Step 4: Goals

Step 5: Strategies

SW

OT

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Planning Tools

Goals - provide direction for the business.– Must be specific– Must be achievable– Should be Communicated Clearly– Should be consistent with the overall company

Budgets - most widely used planning toolSchedules - yardsticks that are used to used to ensure that the quality of work is always acceptable.Policies - guidelines used in making decisions regarding specific, recurring situations.Procedures - stepsResearch - Information

Organizing FunctionBefore plans are carried out, the company must be organized to best carry out the plansOrganizational Charts - a visual device that shows the structure of an organization and the relationship among workers.– Show the departments that make up the business– Indicate each employee’s department and to whom each

reports.– Identify the lines of authority and formal communication

within the organization.

Organizational Chart

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5 0 w o rke rs

M a nu fa c tu ringM a na g er

V .P o fP ro du c tion

M a rke tingM a na g er

3 S ta ff

A ccou n t M a na g er

A d vertis ingM a na g er

V .P . o fM a rke ting

4 w o rke rs

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P re sid e n t

Elements of Organizations

Mangers organize the entire structure of the business.Division of Work - total work to be done must be divided into units, such as departments.Facilities - physical aspects of organizing job satisfaction is influenced by working conditions.Employees - organizing involves establishing good relationships among employees

Characteristics of Good Organizations

Responsibilities are assigned and authority is delegated– Responsibility - the obligation to do an assigned task.– Authority - the right to make decisions about work assignments and require other

employees to perform assigned tasks. Delegated from top to bottom.– Empowerment – authority given to individual employees to solve problems as they

encounter them.Quality of Work is Evaluated

– Accountability - each individual’s responsibility to supervisor and the amount of work performed.

Unity of Command is Practiced - requires that no employee have more than one supervisor at a timeReasonable Span of Control -number of employees directly supervised by one person.

Types of Organizational StructuresLine Organizations - all authority and responsibility can be traced in a direct line from the top executive to the lowest employee level. Often leads to a lack of communication.Line & Staff - add staff specialists to a line organization. Staff Specialists give advice and assistance to personnel. Staff- have no authority over the line personnel. Matrix Organizations – combines workers into temporary work teams to complete specific problems.Team Organization – divides employees into permanent work teams, usually with a leader.– Self Directed Work Teams – work together to establish goals, usually with no

team leader.

Improving Business Organizations

Centralized Organization - Traditional - all major planning activities and decisions are made by a group of top executives in the businessDecentralized - very large businesses are divided into smaller operating units & managers are given almost total responsibility and authority for the operations of those unitsFlattened Organization – fewer levels of management than traditional structures.