management chapter-7
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Basic Elements of Planning and Decision MakingTRANSCRIPT
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Chapter SevenBasic Elements of Planning and Decision Making
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Decision Making and the Planning ProcessDecision making
◦ Is the cornerstone of planning.◦ Is the catalyst that drives the planning
process.◦ Underlies every aspect of setting goals and
formulating plans.Planning
◦ All organizations plan, but not in the same fashion.
◦ All planning occurs within an environmental context.
◦ All goals require plans to guide in their achievement.
◦ All goals are tied higher goals and plans
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The Planning Process
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Organizational Goals
Goals are critical to organizational effectiveness and serve a number of purposes.
Purposes of goals:◦ Provide guidance.◦ Promote good planning.◦ Serve as sources of motivation.◦ Mechanism for evaluation and control.
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Kinds of GoalsBy Level
◦ Mission statement◦ Strategic goals◦ Tactical goals◦ Operational goals
By Area◦ Different functional areas of the
organization.By Time Frame
◦ Long-term, intermediate-term, or short-term time frames and explicit time frames or open-ended.
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Kinds of Goals( Level)
Mission: a statement of an organization’s
fundamental purpose.
Strategic goal: a goal set by and for top
management of the organization.
Tactical goal: set by and for middle
managers of the organization.
Operational goal: set by and for lower
managers of the organization.
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Other Goals
Area: organizations also set goals for different areas.
Time frame: organizations also set goals across different time frames.
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Responsibilities of Setting Goals
Who Sets Goals?◦All managers: managerial
responsibility for goal setting should correspond to the manager’s level in the organization.
Managing Multiple Goals◦ When setting goals organizations sometimes
experience conflicts or contradictions among goals.
◦ Conflicts are addressed through the use of the Optimizing concept:
Optimizing: balancing and reconciling possible conflicts among goals.
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The planningfunction
consists of:
What is to beaccomplished?
What is to beaccomplished?
How is it to beaccomplished?How is it to beaccomplished?
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Planninghas 4
elements:
Objectives Actions
Resources Implementation
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Why Is Planning Important?
A task can not be accomplished if the
manager is not aware of:
How isit to bedone
Whathas to
be done
When isit to bedone
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Kinds of Organizational PlansStrategic Plans
◦ A general plan set by and for top management that outlines resource allocation, priorities, and action steps to achieve strategic goals.
Tactical Plans◦ A plan aimed at achieving the tactical
goals set by and for middle management.Operational Plans
◦ Short-term focus plans that are set by and for lower-level managers.
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Time Frames for PlanningThe Time Dimension of Planning
◦ Planning must provide sufficient time to fulfill the managerial commitments involved.
Long-range Plans◦ Cover present and future strategic issues extending
beyond five years in the future.Intermediate Plans
◦ Cover from 1 to 5 years and parallel tactical plans.◦ Are the principal focus of organizational planning
efforts.Short-range Plans
◦ Are action plans and reaction (contingency) plans that have a time frame of one year or less.
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Responsibilities for Planning
Planning Staff◦ Gather information, coordinate planning
activities, and take a broader view than individual managers.
Planning Task Force◦ Created when the organization wants a
special circumstance addressed. Board of Directors
◦ Establishes corporate mission and strategy.◦ May engage in strategic planning.
Chief Executive Officer◦ May serve as president or board chair; has a
major role in planning and implementing the strategy.
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Responsibilities for Planning
Executive Committee◦ Composed of top executives.◦ Meets regularly with the CEO
to review strategic plans.
Line Management Have formal authority and
responsibility for management of the organization.
Help to formulate strategy by providing information.
Responsible for executing the plans of top management.
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Contingency Planning
The determination of alternative courses of action to be taken if an intended plan of action is unexpectedly disrupted or rendered inappropriate.
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Crisis Management
The set of procedures the organization uses in the event of a disaster or other unexpected calamity.
A related concept is the set of procedures the organization uses in the event of a disaster or other unexpected calamity.
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Tactical Planning
The development and executing of tactical plans:
◦Tactical plans are used to accomplish specific parts of a strategic plan. Each strategic plan is generally implemented through several tactical plans. Effective tactical planning involves both development and execution.
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Operational PlanningSingle use plansProgramsProjectStanding PlansPoliciesStandard operating Procedure
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Operational Planning
Single use plans Developed to carry out a course of
action that is not likely to be repeated in the future.
Programs A single use plan for a large set of
activities.Project
A s ingle-use plan of less scope and complexity than a program.
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Operational Planning
Standing Plan Developed for activities that recur
regularly over a period of time.
Policies A standing plan that specifies the
organization’s general response to a designated problem of situation.
Standard operating Procedure A standard plan that outlines the steps to
be followed in particular circumstances.
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Managing Goal-Setting and Planning Processes
Barriers to Goal Setting and Planning◦As part of managing the goal-setting
and planning process, managers must understand the barriers that can disrupt them.
◦Managers must also know how to overcome them.
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Barriers to Goal Setting and Planning
Major Barriers◦Inappropriate goals.◦Improper reward system.◦Dynamic and complex environment.◦Reluctance to establish goals.◦Resistance to change.◦Constraints.
Overcoming Barriers◦Understanding the purposes of goals
and planning.◦Communication and participation.◦Consistency, revision, and updating.◦Effective reward system.