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PLANS AND PLANNING TECHNIQUEChapter 5
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HOW DO MANAGERS USE THE PLANNING PROCESS?
Planning is one of the four functions of management
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Planning is the process of setting objectives and identifying how to achieve them
Steps in the Planning Process: Step 1: Define your objectives Step 2: Determine where you stand vis a vis
objectives Step 3: Develop premise regarding future
conditions
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Step 4: Make a plan Step 5: Implement the plan and evaluate
results Objectives: specific results that one wishes to
achieve Plan : statement of intended means for
accomplishing objectives
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Good planning makes us… Action Oriented Priority Oriented Advantage Oriented Change Oriented Planning provides focus and orientation The complacency trap is being lulled into
inaction by current successes or failures
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Planning improves coordination and control
In a hierarchy of objectives, lower-objectives help achieve higher-level ones
Planning improves time management
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WHAT TYPES OF PLANS DO MANAGERS USE?
Managers use short-range and long-range plans
Short-range plans – covers a year or less Long-range plans- covers three years or more Strategic plans – identifies long-term
decisions for the organization Vision – clarifies purpose of the organization
and expresses what it hopes to be in the future
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Operational Plan/ Tactical Plans : sets out ways to implement a strategic plans
Functional Plans: identifies how different parts of an enterprise will contribute to accomplishing strategic plans
Organizational policies and procedures are plans
Policy: standing plans that communicates broad guidelines for decisions and action
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Procedure/ Rule: precisely describes actions to take in specific situations
Budgets are plans that commit resources to activities
Zero-based resources: allocates resources as if each budget was brand-new
Forecasting tries to predict the future Contingency planning creates backup plans
for when things go wrong
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Scenario planning crafts plans for alternative future conditions
Benchmarking identifies best practices used by others
Participatory planning improves implementation capacities
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Goal setting helps align plans and activities throughout an organization
Stretch goals are performance targets that we have to work extra hard and stretch to reach
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CONTROLS AND CONTROL SYSTEMSChapter 6
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HOW AND WHY DO MANAGERS USE THE CONTROL PROCESS?
Controlling is one of the four functions of management
Controlling: the process of measuring performance and taking action to ensure desired results
After-action review: structured review of lessons learned and results accomplished through a completed project, task force assignment or special operations
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Control begins with objectives and standards
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Output standards: measures performance results in terms of quantity, quality, cost or time
Input standards: measures work effort that goes into a performance task
Control measures actual performance Control compares results with objectives and
standards
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Control takes corrective actions as needed Management by exception: focuses attention
on differences between actual and desired performance
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WHAT TYPES IF CONTROLS ARE USED BY MANAGERS?
Managers use feedforwad, concurrent, and feedback results
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Feedforward: ensures clear directions and needed resources before the work begins
Concurrent control: focuses on what happens during the work process
Feedback: takes place after completing an action
Managers use both external and internal controls
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Internal control/ self control: occurs as people exercise self-discipline in fulfilling job expectations
External control: occurs through direct supervision or administrative systems
Bureaucratic control: influences behavior through authority, policies, procedures, job descriptions, budgets, and day-to-day supervision
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Clan control: influences behavior through social norms, and peer expectations
Market control: the influence of market competition on the behaviors of organizations and their members
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Managing objectives is a way to integrate planning and controlling
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Managing by objectives: a process of joint objective setting between a superior and a subordinate
Improvement objectives: documents intentions to improve performance in a specific way
Personal development objectives: documents intentions to improve personal growth, such as expanded job knowledge or skills
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WHAT ARE SOME USEFUL CONTROL TOOLS AND TECHNIQUES?
Quality control is a foundation of modern management
Total Quality Management (TQM): commits to quality objectives, continuous improvement and doing things right the first time
Continuous improvement: involves always searching for new ways to improve work quality and performance
Control charts: graphical ways of displaying trends so that exceptions to the quality standards can be identified
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Six sigma: quality standard of 3.4 defects or less per million products or service deliveries
Gantt Chart and CPM/PERT are used in project management and control
Project: one time activities with many competent tasks that must be completed in proper order and according to budget
Project management: makes sure activities required are to complete a project are planned well and accomplished on time
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Gantt Chart: graphically displays the scheduling of tasks required to complete the project
CPM/PERT: is a combination of critical path method and program evaluation and review technique.
Critical path: the pathway from project start to conclusion that involves activities with the longest completion times
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Critical path
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Inventory controls help save costs Inventory control: ensures that inventory is
only big enough to meet immediate needs Economic order quantity method: places new
orders when inventory levels fall to predetermined points
Just in Time (JIT) scheduling: routes materials to workstations just in time of use
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Breakeven analysis shows where revenues will equal costs
Breakeven point: occurs where revenues equal costs
Breakeven analysis performs what-if calculations under different revenue and cost conditions.
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Financial ratios measure key areas of financial performance
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Balanced scorecards help top managers exercise strategic control
Balanced scorecard: measures performance on financial, customer service, internal process, and innovation and learning goals
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STRATEGY AND STRATEGIC MANAGEMENTChapter 7
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WHAT TYPES OF STRATEGIES ARE USED BY ORGANIZATIONS?
Strategy is a comprehensive plan for achieving competitive advantage.
Corporate strategy: sets long term direction for total enterprise
Business strategy: identifies how a division or strategic business unit will compete in its product or service domain
Functional strategy: guides activities within ne specific area of operations
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Growth strategies focus on expansion Functional strategy: guides activities within
one specific area of operations Restructuring and divestiture strategies focus
on consolidation Retrenchment strategy: changes operations
to correct weakness Liquidation: occurs when business closes and
sells its assets to pay creditors
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Restructuring: reduces the scale or mix of operations
Chapter 11 bankruptcy: protects an insolvent firm from creditors during a period of reorganization to restore profitability
Downsizing: decreases the size of operations Divestiture: involves selling off parts of the
organization to refocus attention on core business areas
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Global strategies focus on international business incentives
Global strategy: adopts standardized products and advertising for use worldwide
Transnational firm tries to operate globally without having a strong national identity
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Cooperative strategies focus on alliances and partnerships
Strategic allegiance: organizations join together in partnership to pursue an area of mutual interest
Co-opetition: working with rivals on projects with mutual benefit
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E-business strategies focus on using the internet for business strategies
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B2B Business strategy: uses IT and Web portals to link organizations vertically in supply chains
B2C Business strategy: uses IT and Web portals to link businesses with customers
Social media strategy: uses social media to better engage with an organization’s customers, clients and external audiences in general
Crowdsourcing: strategic use of internet to engage customers and potential customers in providing opinions and suggestions on products and their designs
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HOW DO MANAGERS FORMULATE AND IMPLEMENT STRATEGIES?
The strategic management process formulates and implements strategies
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Strategic management: process of formulating and implementing strategies
Strategic formulation: process of creating strategies
Strategic implementation: process of putting strategies into action
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Strategy formulation begins with organization's mission and objectives
Mission: organization's reason for existence in society
Operating objectives: specific results that organizations wish to accomplish
SWOT analysis identifies strengths, weaknesses, opportunities and threats
Core competencies: special strength that gives an organization a competitive advantage
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Porter’s Five-process model examines industry attractiveness
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Porter’s competitive strategies model examines business or product strategies
Differentiation strategy: offers products that are unique and different from those of the competition
Cost leadership strategy: seeks to operate with lower costs than competitors
Focused differentiation strategy: offers unique products to a special market segment
Focused cost leadership strategy: seeks the lowest cost of operations within a special market segment
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Portfolio planning examines strategies across multiple businesses or products
BCG Market – analyzes business opportunities according to market growth rate and market share
Strategic leadership ensures strategy implementation and control
Strategic leadership: inspires people to implement organizational strategies
Strategic control: makes sure that strategies are well implemented and that poor strategies are scrapped or changed