Foundations of Planning

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Foundations of Planning
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Learning Objectives

• Define planning
• Explain the potential benefits of planning
• Identify the potential drawbacks of planning
• Distinguish between strategic and tactical plans
• State when directional plans are preferred over
  specific plans

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Learning Objectives

• Define management by objectives and identify its
  common elements
• Outline the steps in the strategic management
  process
• Describe the four grand strategies
• Explain SWOT analysis
• Compare how entrepreneurs and bureaucratic
  managers approach strategy

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Planning

• Defining the organizations goals, establishing
  an overall strategy, and developing a hierarchy
  of plans to achieve goals

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Provides Direction
Sets Standards to Facilitate Control
Reasons for Planning
Reduces the Impact of Change
Minimizes Waste and Redundancy
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Criticisms of Formal Planning
May Create Rigidity
Cant Be Done in a Dynamic Environment
Cant Replace Intuition and Creativity
Focus on Todays Competition
Reinforces Success
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Does Planning Improve Performance?

• Financial results
• Environmental concerns
• Quality and implementation

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How Do Strategic and Tactical Plans Differ?
Objectives
Time Frame
Scope
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The Time Frame of Planning
Short-Term Plans
Long-Term Plans
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Specific Plans Directional Plans
Clear
Low
Flexibility
Objectives
General
High
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Single-Use vs. Standing Plans
Unique Situations
Ongoing Operations
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What Is Management by Objectives?
Organizational Objectives
Divisional Objectives
Departmental Objectives
Individual Objectives
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Common Elements in an MBO Program
Specific Goals
Participative Decision Making
Set Time Period
Performance Feedback
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More Difficult Goals Lead To Higher Performance
Specific Goals Lead to Better Results
Does MBO Work?
Support from Top Management Is Critical
Participation Is Key
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Employees Setting Objectives

• Identify key job tasks
• Set specific and
• challenging goals
• Encourage active
• participation
• Prioritize goals
• Build in feedback
• Link rewards to
• goal attainment

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Problems with MBO

• Efforts directed primarily toward output
• Encourage individual rather than team efforts
• Goals may discourage efforts for continuous
  improvement

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Environmental Scanning
Analyzing the Environment
Competitive Intelligence
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Strengths
Threats
Opportunities
SWOT Analysis
Weaknesses
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Identifying Opportunities
Opportunities in the Environment
Organizations Resources
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Stability
Growth
The Grand Strategies
Retrenchment
Combination
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Determining ACompetitive Strategy
Differentiation
Cost Leadership
Focus
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Implementation
Evaluation
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Benchmarking
Quality As A Strategic Weapon
ISO 9000
Six Sigma
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Comparison Entrepreneurs and Traditional Managers
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