the foundations of planning
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The Foundations of Planning. Learning Objectives. Define planning Explain the potential benefits of planning Identify the potential drawbacks of planning Compare strategic and tactical plans Compare directional and specific plans. Learning Objectives. Discuss Management by Objectives - PowerPoint PPT PresentationTRANSCRIPT
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©Prentice Hall, 2001 Chapter 3 1
The Foundations The Foundations of Planningof Planning
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©Prentice Hall, 2001 Chapter 3 2
Learning ObjectivesLearning Objectives
• Define planning
• Explain the potential benefits of planning
• Identify the potential drawbacks of planning
• Compare strategic and tactical plans
• Compare directional and specific plans
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©Prentice Hall, 2001 Chapter 3 3
Learning ObjectivesLearning Objectives
• Discuss Management by Objectives
• Outline the strategic management process
• Describe the four grand strategies
• Explain SWOT analysis
• Learn how entrepreneurs and bureaucratic
managers approach strategy
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©Prentice Hall, 2001 Chapter 3 4
Reduce theReduce theImpact of ChangeImpact of Change
Reduce theReduce theImpact of ChangeImpact of Change
ProvideProvideDirectionDirectionProvideProvide
DirectionDirection
Minimize WasteMinimize Wasteor Redundancyor RedundancyMinimize WasteMinimize Wasteor Redundancyor Redundancy
Set ControlSet ControlStandardsStandards
Set ControlSet ControlStandardsStandards
ReasonsReasonsfor Planningfor Planning
ReasonsReasonsfor Planningfor Planning
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©Prentice Hall, 2001 Chapter 3 5
ArgumentsArgumentsAgainstAgainst
StrategicStrategicPlanningPlanning
Rigid Assumptions Rigid Assumptions of Stabilityof Stability
IntuitionIntuitionand Creativityand Creativity
EnvironmentalEnvironmentalTurbulenceTurbulence
Focus on Today’s Focus on Today’s CompetitionCompetition
Preoccupation withPreoccupation withCurrent SuccessCurrent Success
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©Prentice Hall, 2001 Chapter 3 6
Does Planning Improve Does Planning Improve Performance?Performance?
• Financial results
• Environmental concerns
• Quality and implementation
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©Prentice Hall, 2001 Chapter 3 7
ObjectivesObjectivesTime FrameTime Frame ScopeScope
How Do Strategic and How Do Strategic and Tactical Plans Differ?Tactical Plans Differ?
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©Prentice Hall, 2001 Chapter 3 8
The Time Frame The Time Frame of Planningof Planning
Short-TermShort-Term
PlansPlansLong-TermLong-Term
PlansPlans
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©Prentice Hall, 2001 Chapter 3 9
Specific Plans
Directional Plans
Clear
General
Low
High
Flex
ibility
Ob
ject
ives
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©Prentice Hall, 2001 Chapter 3 10
Single-Use Single-Use and Standing and Standing
PlansPlans
UniqueUnique
SituationsSituationsOngoingOngoing
OperationsOperations
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©Prentice Hall, 2001 Chapter 3 11
OrganizationalOrganizationalObjectivesObjectives
DivisionalDivisionalObjectivesObjectives
DepartmentalDepartmentalObjectivesObjectives
IndividualIndividualObjectivesObjectives
What Is Management by Objectives?
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©Prentice Hall, 2001 Chapter 3 12
Common MBO Common MBO Elements Elements
GoalGoalSpecificitySpecificity
ExplicitExplicitTime PeriodTime Period
ParticipativeParticipativeDecision MakingDecision Making
PerformancePerformanceFeedbackFeedback
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©Prentice Hall, 2001 Chapter 3 13
GoalGoalDifficultyDifficulty
GoalGoalDifficultyDifficulty
Does MBOWork?
Does MBOWork?
GoalGoalSpecificitySpecificity
GoalGoalSpecificitySpecificity
Top Top ManagementManagement
Top Top ManagementManagement
ParticipationParticipation ParticipationParticipation
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©Prentice Hall, 2001 Chapter 3 14
Setting Employee Setting Employee ObjectivesObjectives
• Identify key job tasks
• Set specific hard goals
• Let employees participate
• Prioritize goals
• Build in feedback
• Reward goal attainment
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©Prentice Hall, 2001 Chapter 3 15
The Downside of The Downside of ObjectivesObjectives
Quality ofQuality ofProductsProducts
Quantity ofQuantity ofProductsProducts
IndividualIndividualEffortEffort Team FocusTeam Focus
PotentialPotentialImprovementImprovement
ContinuousContinuousImprovementImprovement
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©Prentice Hall, 2001 Chapter 3 16
Set Mission,Objectives,
and Strategies
FormulateStrategies
Analyze theEnvironment
Identify Opportunitiesand Threats
Analyze Resources
IdentifyStrengths andWeaknesses
ReassessMission andObjectives
ImplementStrategies
EvaluateResults
The Strategic Management Process
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©Prentice Hall, 2001 Chapter 3 17
Starting the StrategicStarting the Strategic
Management ProcessManagement Process
StrategiesStrategiesObjectivesObjectivesMissionMission
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©Prentice Hall, 2001 Chapter 3 18
Competitive Competitive IntelligenceIntelligenceCompetitive Competitive IntelligenceIntelligence
EnvironmentalEnvironmentalScanningScanning
EnvironmentalEnvironmentalScanningScanning
Analyzing the
Environment
Analyzing the
Environment
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©Prentice Hall, 2001 Chapter 3 19
SWOTSWOTAnalysiAnalysi
ss
WeaknessesWeaknessesThreatsThreats
OpportunitiesOpportunities
StrengthsStrengths
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©Prentice Hall, 2001 Chapter 3 20
Identifying Opportunities
Opportunities inthe EnvironmentOpportunities inthe Environment
Organization’sResources
Organization’sResources
Organization’sOpportunities
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©Prentice Hall, 2001 Chapter 3 21
RetrenchmentRetrenchmentCombinationCombinationCombinationCombination
The Grand StrategiesThe Grand StrategiesThe Grand StrategiesThe Grand Strategies
StabilityStabilityStabilityStabilityGrowthGrowthGrowthGrowth
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©Prentice Hall, 2001 Chapter 3 22
Determining ADetermining ACompetitive StrategyCompetitive Strategy
Determining ADetermining ACompetitive StrategyCompetitive Strategy
DifferentiationDifferentiationDifferentiationDifferentiationCostCostLeadershipLeadership
CostCostLeadershipLeadership
FocusFocusFocusFocus
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©Prentice Hall, 2001 Chapter 3 23
ImplementationImplementation
EvaluationEvaluation
What HappensAfter
StrategiesAre
Formulated?
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©Prentice Hall, 2001 Chapter 3 24
BenchmarkingBenchmarking
Quality As Quality As A StrategicA Strategic
WeaponWeaponISO 9000ISO 9000
Six SigmaSix Sigma
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©Prentice Hall, 2001 Chapter 3 25
The EntrepreneurialThe Entrepreneurial
PersonalityPersonality
OtherOther
ImportantImportant
FactorsFactors
ThreeThree
CriticalCritical
FactorsFactors
CommonCommon
PersonalityPersonality
TraitsTraits
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©Prentice Hall, 2001 Chapter 3 26
Comparing Entrepreneurs and Traditional Managers
• Traditional Rewards
• Short-Term Goals
• Delegate/Supervise
• Low
• Avoidance
• Primary Motivation
• Time Orientation
• Activity
• Risk Propensity
• View of Failure/Errors
• Personal Rewards
• Long-Term Goals
• Direct Involvement
• Moderate
• Acceptance
EntrepreneursManagersCharacteristics