Management 5 - 7

Plans and Planning Technique

Chapter 5

How do Managers use the planning
process?
• Planning is one of the four functions of
management

• 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

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

• Good planning makes us…
Action Oriented
Priority Oriented
Advantage Oriented
Change Oriented
***The complacency trap is being lulled into
inaction by current successes or failures

• Planning improves coordination and control

• Planning improves time management

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

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

Procedure/ Rule: precisely describes actions to
take in specific situations
• Budgets are plans that commit resources to
activities

• Forecasting tries to predict the future
• Contingency planning creates backup plans for
when things go wrong
• Scenario planning crafts plans for alternative
future conditions
• Benchmarking identifies best practices used
by others
• Participatory planning improves
implementation capacities

• Goal setting helps align plans and activities
throughout an organization

How do managers formulate and
implement strategies?

Porter’s Five-process model examines industry
attractiveness

Controls and Control Systems

Chapter 6

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

• Control begins with objectives and standards

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

• Control takes corrective actions as needed
Management by exception: focuses attention
on differences between actual and desired
performance

What types if controls are used by
managers?
• Managers use feedforwad, concurrent, and
feedback results

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

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

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

• Managing objectives is a way to integrate
planning and controlling

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

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

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

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

• 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

• 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.

• Financial ratios measure key areas of financial
performance

• Balanced scorecards help top managers
exercise strategic control
Balanced scorecard: measures performance
on financial, customer service, internal
process, and innovation and learning goals

Strategy and Strategic
Management
Chapter 7

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

• 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

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

• 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

• 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

• E-business strategies focus on using the
internet for business strategies

 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

How do managers formulate and
implement strategies?
• The strategic management process formulates
and implements strategies

Strategic management: process of formulating
and implementing strategies
Strategic formulation: process of creating
strategies
Strategic implementation: process of putting
strategies into action

• 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

• Porter’s Five-process model examines industry
attractiveness

• 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

• 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

Management 5 - 7

More Related Content

What's hot

Viewers also liked

Similar to Management 5 - 7

More from Tim Arroyo

Recently uploaded

Management 5 - 7

Editor's Notes