Chapter 2 - Foundations of Planning

7/23/2019 Chapter 2 - Foundations of Planning

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Part 2: PlanningPart 2: Planning

PowerPoint Presentation by Charlie Cook

Copyright 2004 Prentice Hall, Inc.All rights reserved.

Chapter 3

o!ndationso" Planning


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Copyright 2004 Prentice Hall,Inc. All ri hts reserved.

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L E A R N I N G O U T C O M E S

After reading this chapter, I will be able to:

#. $e"ine planning.

2. %&plain the potential bene"its o" planning.

'. Identi"y potential drawbacks to planning.

4. $isting!ish between strategic and tactical

plans.

(. )ecogni*e when directional plans are pre"erred

over speci"ic plans.

+. $e"ine anageent by ob-ectives and identi"y

its coon eleents.


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L E A R N I N G O U T C O M E S (contd)

After reading this chapter, I will be able to:

. /!tline the steps in the strategic anageent

process.

. $escribe the "o!r grand strategies.

1. %&plain 3/ analysis.

#0. $escribe how entreprene!rs identi"y a

copetitive advantage.


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34

Planning $e"ined

Defining the organiation! o"#ecti$e! or goa%! E!ta"%i!hing an o$era%% !trateg& for achie$ing

tho!e goa%!

De$e%o'ing a co'rehen!i$e hierarch& of '%an!to integrate and coordinate acti$itie!

Planning is concerned with ends (what is to be done)

as well as with means (how it is to be done).


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35

)easons "or

Planning

%5HI6I '.#


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3

Criticiss /" oral Planning

%anning a& create rigidit&* %an! cant "e de$e%o'ed for a d&naic

en$ironent*

+ora% '%an! cant re'%ace int,ition andcreati$it&*

%anning foc,!e! anager! attention on toda&!

co'etition- not on toorro.! !,r$i$a%*

+ora% '%anning reinforce! !,cce!!- .hich a&

%ead to fai%,re*


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3!

Planning and Per"orance

+ora% '%anning genera%%& ean! higher 'rofit!-higher ret,rn on a!!et!- and other 'o!iti$e

financia% re!,%t!*

%anning 'roce!! /,a%it& and i'%eentation'ro"a"%& contri",te ore to high 'erforance

than doe! the e0tent of '%anning*

1hen e0terna% en$ironent re!triction! a%%o.ed

anager! fe. $ia"%e a%ternati$e!- '%anning didnot %ead to higher 'erforance*


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3"

ypes o" Plans

%5HI6I ' .2

6)%A$H I7% P%CIICI8 )%9:%;C8

/ :% )A7% / :%

trategic


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3#

Planning= oc!s and ie

Strategic '%an!%an! that are organiation2.ide- e!ta"%i!h o$era%%

o"#ecti$e!- and 'o!ition an organiation in ter! of it!

en$ironent

Tactica% '%an!%an! that !'ecif& the detai%! of ho. an organiation!

o$era%% o"#ecti$e! are to "e achie$ed

Short2ter '%an!

%an! that co$er %e!! than one &ear

Long2ter '%an!%an! that e0tend "e&ond fi$e &ear!


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3$0

trategic Planning

Strategic '%an!A''%& "road%& to the entire organiation

E!ta"%i!h the organiation! o$era%% o"#ecti$e!

See3 to 'o!ition the organiation in ter! of it!

en$ironent

ro$ide direction to dri$e an organiation! effort! to

achie$e it! goa%!*

Ser$e a! the "a!i! for the tactica% '%an!*

Co$er e0tended 'eriod! of tie

Are %e!! !'ecific in their detai%!


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3$$

actical Planning

Tactica% '%an! (o'erationa% '%an!)A''%& to !'ecific 'art! of the organiation*

Are deri$ed fro !trategic o"#ecti$e!

S'ecif& the detai%! of ho. the o$era%% o"#ecti$e! are to

"e achie$ed*

Co$er !horter 'eriod! of tie

M,!t "e ,'dated contin,o,!%& to eet c,rrent

cha%%enge!


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3$2

$irectional vers!s peci"ic Plans

%5HI6I ' .'


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peci"ic and $irectional Plans

S'ecific '%an!%an! that ha$e c%ear%& defined o"#ecti$e! and %ea$e

no roo for i!inter'retation

41hat- .hen- .here- ho. ,ch- and "& .ho5

('roce!!2foc,!)

Directiona% '%an!

+%e0i"%e '%an! that !et o,t genera% g,ide%ine!

4Go fro here to there5 (o,tcoe2foc,!)


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ingle>:se and tanding Plans

Sing%e2,!e '%an!A '%an that i! ,!ed to eet the need! of a 'artic,%ar

or ,ni/,e !it,ation

Sing%e2da& !a%e! ad$erti!eent

Standing '%an

A '%an that i! ongoing and 'ro$ide! g,idance for

re'eated%& 'erfored action! in an organiation

C,!toer !ati!faction 'o%ic&


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7anageent by /b-ectives

Manageent "& O"#ecti$e! (M6O)A !&!te in .hich !'ecific 'erforance o"#ecti$e! are

#oint%& deterined "& !,"ordinate! and their

!,'er$i!or!- 'rogre!! to.ard o"#ecti$e! i! 'eriodica%%&

re$ie.ed- and re.ard! are a%%ocated on the "a!i! ofthat 'rogre!!*

Lin3! indi$id,a% and ,nit 'erforance o"#ecti$e! at a%%

%e$e%! .ith o$era%% organiationa% o"#ecti$e!

+oc,!e! o'erationa% effort! on organiationa%%&i'ortant re!,%t!*

Moti$ate! rather than contro%!


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Cascading o" /b-ectives

%5HI6I '.4


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3$!

%leents o" 76/

Goa% !'ecificit& artici'ati$e deci!ion a3ing

E0'%icit tie 'eriod for 'erforance

erforance feed"ac3


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3$"

etting %ployee /b-ectives

Identif& an e'%o&ee! 3e& #o" ta!3!* E!ta"%i!h !'ecific and cha%%enging goa%! for each

3e& ta!3*

A%%o. the e'%o&ee to acti$e%& 'artici'ate* rioritie goa%!*

6,i%d in feed"ac3 echani!! to a!!e!! goa%

'rogre!!*

Lin3 re.ard! to goa% attainent*


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3$#

trategic 7anageent

Strategic Manageent roce!!A nine2!te' 'roce!! that in$o%$e! !trategic '%anning-

i'%eentation- and e$a%,ation

The organiation! c,rrent identit&

Mi!!ion !tateent

Define! the ',r'o!e of the organiation

O"#ecti$e!

Strategic '%anA doc,ent that e0'%ain! the ",!ine!! fo,nder! $i!ion

and de!cri"e! the !trateg& and o'eration! of that

",!ine!!*


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he trategic 7anageent Process

%5HI6I '.(


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Analy*e the %nvironent

En$ironenta% !canningScreening %arge ao,nt! of inforation to detect

eerging trend! and create a !et of !cenario!

Co'etiti$e inte%%igence

Acc,rate inforation a"o,t co'etitor! that a%%o.!

anager! to antici'ate co'etitor! action! rather

than ere%& react to the


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3/= Identi"ying

/rgani*ational

/pport!nities

%5HI6I '.+

3/ analysisAna%&!i! of an organiation! !trength!-

.ea3ne!!e!- o''ort,nitie!- and threat! in

order to identif& a !trategic niche that the

organiation can e0'%oit


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3/ Analysis

trengths ?strategic@ Internal reso!rces that are available or things that an

organi*ation does well

Core copetency= a !ni!e skill or reso!rce that

represents a copetitive edge

3eaknesses )eso!rces that an organi*ation lacks or activities that it

does not do well

/pport!nities ?strategic@

Positive e&ternal environental "actors

hreats ;egative e&ternal environental "actors


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Brand trategies

Browth strategy A strategy in which an organi*ation attepts to increase the

level o" its operations

)etrenchent strategy

A strategy characteristic o" a copany that is red!cing itssi*e, !s!ally in an environent o" decline

Cobination strategy he si!ltaneo!s p!rs!it by an organi*ation o" two or ore

o" growth, stability, and retrenchent strategies

tability strategy A strategy that is characteri*ed by an absence o" signi"icant

change


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Browth trategies

MergerOcc,r! .hen t.o co'anie!- ,!,a%%& of !ii%ar !ie-

co"ine their re!o,rce! to for a ne. co'an&

Ac/,i!ition

Occ,r! .hen a %arger co'an& ",&! a !a%%er one

and incor'orate! the ac/,ired co'an&! o'eration!

into it! o.n


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Copetitive trategies

Strategie! that 'o!ition an organiation in !,ch a.a& that it .i%% ha$e a di!tinct ad$antage o$er it!

co'etition

Co!t2%eader!hi' !trateg&

6ecoing the %o.e!t2co!t 'rod,cer in an ind,!tr&

Differentiation !trateg&

Atte'ting to "e ,ni/,e in an ind,!tr& .ithin a "road

ar3et

+oc,! !trateg&

Atte'ting to e!ta"%i!h an ad$antage

(co!t7differentiation) in a narro. ar3et !egent


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6encharking

6enchar3ingThe !earch for the "e!t 'ractice! aong co'etitor!

or nonco'etitor! that %ead to their !,'erior

'erforance

ISO 8999 !erie!Standard! de!igned "& the Internationa% Organiation

for Standardiation that ref%ect a 'roce!! .here"&

inde'endent a,ditor! atte!t that a co'an&! factor&-

%a"orator&- or office ha! et /,a%it& anageent!tandard!


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Attaining i& iga 9!ality

Si0 !igaA 'hi%o!o'h& and ea!,reent 'roce!! de$e%o'ed in

the :8;9! at Motoro%a*

To de!ign- ea!,re- ana%&e- and contro% the in',t

!ide of a 'rod,ction 'roce!! to achie$e the goa% of noore than


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i& iga #2>Process teps

Se%ect the critica%2to2/,a%it& characteri!tic!*

Define the re/,ired 'erforance !tandard!*

>a%idate ea!,reent !&!te- ethod!- and 'roced,re!*

E!ta"%i!h the c,rrent 'roce!!e! ca'a"i%it&*

Define ,''er and %o.er 'erforance %iit!*

Identif& !o,rce! of $ariation*

Screen 'otentia% ca,!e! of $ariation to identif& the $ita% fe. $aria"%e!

needing contro%*

Di!co$er $ariation re%ation!hi' for the $ita% $aria"%e!*

E!ta"%i!h o'erating to%erance! on each of the $ita% $aria"%e!*

>a%idate the ea!,reent !&!te! a"i%it& to 'rod,ce re'eata"%e data*

Deterine the ca'a"i%it& of the 'roce!! to contro% the $ita% $aria"%e!*

I'%eent !tati!tica% 'roce!! contro% on the $ita% $aria"%e!*

%5HI6I '.So,rce? Cited in D* @aro%d and +* * 6arto!- 4O'tiie E0i!ting roce!!e! to Achie$e Si0 Siga Ca'a"i%it&-5re'rinted .ith 'eri!!ion fro Control Engineering- March :88;- '*;B- Cahner! 6,!ine!! Inforation*


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Identi"ying A Copetitive Advantage

En$ironenta% !o,rce! of entre'rene,ria%o''ort,nit&

The ,ne0'ected

The incongr,o,!

The 'roce!! need

Ind,!tr& and ar3et !tr,ct,re!

Deogra'hic!

Change! in 'erce'tion

Ne. 3no.%edge

Documents

Chapter 2 - Foundations of Planning