What is Planning?
Planning:
The primary management function:
- Is deciding on the organization’s objective or goals
- Establishing an overall strategy for achieving those goals
- Developing a comprehensive hierarchy of plans to integrate and coordinate activities
Types of planning:
Informal: not written down, short-term focus; specific to an organizational unit.
Formal: written, specific, and long-term focus, involves shared goals for the organization.
Reasons for Planning:
Because of changes in the environment
Managers engage in planning to:
- Set the standards to facilitate control
- Provide direction
- Minimize waste and redundancy
- Reduce the impact of change
Four reasons for planning:
- Planning establishes coordinated effort:
- gives direction to both managers and non-managerial employees to know what to contribute
- Planning reduces uncertainty:
- forces managers to look ahead, anticipate change, consider the impact of change, and develop
appropriate responses
- Planning reduces overlapping and wasteful activities:
- coordination before the fact is likely to uncover waste and redundancy
- Planning establishes goals that facilitate managerial control:
- to ensure that the plans are carried out and the goals are met
Criticisms of Formal Planning
- may create rigidity
- can’t replace intuition and creativity
- focuses attention on today’s success, not tomorrow’s survival
- reinforces success, which may lead to failure
, Formal Planning & Organizational Performance
Benefits:
- higher profits
- higher return on assets
- improved quality of planning
- appropriate implementation
Strategic Management:
- what managers do to develop an organization’s strategies
Strategies:
- plans for how the organization will do what in its business, how it will compete successfully, and
how it will attract its customers in order to achieve its goals
Importance of Strategic Management:
- has a positive impact on organizational performance
- prepares mangers to cope with changing situations
- guides managers to examine relevant factors in planning future action
Steps in the Strategic Management process:
1) Identify the organization’s current mission, goals, and strategies
2) a) External Analysis:
- opportunities
- threats
- competition
- components of the environment
b) Internal Analysis:
- strengths
- weaknesses
- resources
- capabilities
- core competencies
SWOT analysis
3) Formulate Strategies
- corporate
- business
- functional
4) Implement Strategies
5) Evaluate Results
- how effective has strategies been?
- what adjustments are necessary?
Planning:
The primary management function:
- Is deciding on the organization’s objective or goals
- Establishing an overall strategy for achieving those goals
- Developing a comprehensive hierarchy of plans to integrate and coordinate activities
Types of planning:
Informal: not written down, short-term focus; specific to an organizational unit.
Formal: written, specific, and long-term focus, involves shared goals for the organization.
Reasons for Planning:
Because of changes in the environment
Managers engage in planning to:
- Set the standards to facilitate control
- Provide direction
- Minimize waste and redundancy
- Reduce the impact of change
Four reasons for planning:
- Planning establishes coordinated effort:
- gives direction to both managers and non-managerial employees to know what to contribute
- Planning reduces uncertainty:
- forces managers to look ahead, anticipate change, consider the impact of change, and develop
appropriate responses
- Planning reduces overlapping and wasteful activities:
- coordination before the fact is likely to uncover waste and redundancy
- Planning establishes goals that facilitate managerial control:
- to ensure that the plans are carried out and the goals are met
Criticisms of Formal Planning
- may create rigidity
- can’t replace intuition and creativity
- focuses attention on today’s success, not tomorrow’s survival
- reinforces success, which may lead to failure
, Formal Planning & Organizational Performance
Benefits:
- higher profits
- higher return on assets
- improved quality of planning
- appropriate implementation
Strategic Management:
- what managers do to develop an organization’s strategies
Strategies:
- plans for how the organization will do what in its business, how it will compete successfully, and
how it will attract its customers in order to achieve its goals
Importance of Strategic Management:
- has a positive impact on organizational performance
- prepares mangers to cope with changing situations
- guides managers to examine relevant factors in planning future action
Steps in the Strategic Management process:
1) Identify the organization’s current mission, goals, and strategies
2) a) External Analysis:
- opportunities
- threats
- competition
- components of the environment
b) Internal Analysis:
- strengths
- weaknesses
- resources
- capabilities
- core competencies
SWOT analysis
3) Formulate Strategies
- corporate
- business
- functional
4) Implement Strategies
5) Evaluate Results
- how effective has strategies been?
- what adjustments are necessary?
