Chp 5: Planning(Additional Concepts)

Front 1

What the three plans commonly differ in

Back 1

1. Time horizon
2. Scope
3. Complexity
4. Impact
5. Interdependence

Front 2

Organizational Levels

Back 2

1. Corporate Level
2. Business Level
3. Functional Level

Front 3

Corporate Level

Back 3

Primarily focus on questions such as:

1. What industries should we get into or out of?
2. What markets should the firm be in?
3. In which businesses should the corporation invest money.
4. What resources should be allocated to each of the business.

Front 4

Business Level

Back 4

Questions:

1. Who are our direct competitors
2. What are their strengths and weaknesses
3. What are our strengths and weaknesses
4. What do customers value in the products or services we offer.
5. What advantages do we have over competitors?

Front 5

Functional Level

Back 5

1. What activities does my unit need to perform well in order to meet customer expectations?
2. What information about competitors does my unit need in order to help the business compete effectively
3. What are our unit's strengths and weaknesses

Front 6

6 Key Elements of Planning Process

Back 6

1. Environmental analysis
2. Resources
3. Objectives
4. Actions
5. Implementation
6. Outcomes

Front 7

Analyzing the Firm's External Environment

Back 7

Includes tools such as forecasts and benchmarking.

Front 8

Forecasts

Back 8

Can be made about virtually all critical elements in the environment that are likely to affect the organization or manager's area of responsibility.

have a cascading effect

Front 9

Environmental uncertainty

Back 9

The greater the environmental uncertainty, the more flexible a firm's plans need to be.

Front 10

Assessing the Firm's Internal Resources

Back 10

You should identify the resources that are available to your firm because they affect what objectives you should establish and what plans you should formulate.

Questions:

1. What human capital do we have currently?

2. Can people work on new and additional projects or will we need new people?

3. Can we develop or acquire additional human capital if needed for new projects?

4. What financial resources do we have available? Can we obtain funding from the debt or equity markets if needed.

5. Do we have the cutting-edge technology or can we gain access to it at a cost-effective price?

Front 11

Setting Objectives

Back 11

Includes:

1.Establishing priorities among multiple objectives

2. Measuring Objectives

Front 12

Priorities and Multiple Objectives

Back 12

Setting objectives can be a challenge because of priority determination, meaning some objectives might be more important than others and there may be temporal priorities among objectives.

Front 13

Measuring Objectives

Back 13

After the organization's objectives are clear to everyone, managers need to establish how to measure their achievement.

Front 14

Action Plans

Back 14

Describe what the organization will do to accomplish the objectives it has established; characteristic of an effective action plan is the sequence and timing of the specific steps or actions that must be taken.

Front 15

Gaantt chart

Back 15

graphically displays the sequence and timing of specific actions with time on the x-axis and specific actions to be completed on the y-axis.

Shows when actions start and how long till their completion

Shows the sequence in which to complete the actions; preceding action before subsequent one and expected overlap in timing of specific actions

Front 16

Accountability

Back 16

Second key aspect of effective action plans involves establishing who is accountable for the specific actions identified, which facilitates coordination and increases the likelihood that the actions will be taken as planned in both quality and timing.

Front 17

Implementing Plans

Back 17

Action plans must be effectively implemented, which some plans often fail in this stage because of the inadequate assessment of resources and lack of accountability assigned to individuals for implementation.

Front 18

Monitoring the Implementation

Back 18

To ensure that plans are successfully implemented, you must monitor three critical factors in particular:

1. The progress of the plan and its implementation.

2. The level of support that the plan receives as it's being implemented

3. The level of resistance

Front 19

Making Real-Time Adjustments

Back 19

Plans likely will need to be adjusted because unanticipated events may occur, which will require a change in the plans or their implementation.

Front 20

Monitoring Outcomes

Back 20

If everything in the planning process is going according to plan, then outcomes are easy to measure, but negative or positive unanticipated consequences can be valuable sources of learning.

Large firms in particular need specially designed information systems to capture and report these consequences on a real-time basis, such as whether a product being sold by the firm is performing poorly and providing a feedback loop to be used by the company to improve upon their planning process.

Front 21

Budgets

Back 21

With either approach managers typically use budgets as planning tools to determine priorities, required resources, and keys to implementation, particularly because of the scarcity of financial resources, which forces managers to discuss the relative priority of the firm's activities.

Front 22

Goal Setting Criteria

Back 22

A specific planning process for managing performance that has 5 characteristics:

1. Specific

2. Measurable

3. Commitment
4. Realistic

5. Time Bound

Front 23

Specific

Back 23

Goal should be stated in specific terms rather than vague terms such as "I want to achieve a 10 percent return on assets," rather than "I want to achieve the highest performance possible."

Front 24

Measurable

Back 24

You could determine how specific a goal is by measuring it and you should measure progress toward completing a goal on a regular basis.

Front 25

Commitment

Back 25

Those involved in achieving specific and measurable goals must be committed to it and managers do not want superficial agreements(but rather deep commitment) from subordinates to a goal.

Front 26

Realistic

Back 26

If goals are unrealistic, employees may try to set their own goals and other employees may become discouraged, which will disallow for commitment to goals.

Also, easy goals do not inspire motivation and do not deliver substantial results.

Front 27

Time Bound

Back 27

Goals need a specific time span within which they are to be achieved to be effective whereby some goals will take more time than others.

Also, having a time frame for goals is necessary in order to evaluate their success, and it also affects the realism of goals.