MANAGEMENT SEMINAR 1, LECTURE 1

The modern business environment

Inclusive management

VUCA world
Volatility
- Unstable situation for an unknown period, that occurs a price fluctuations, affects supply and
demand. The more volatile the world, the faster things will change. (VISION)
Uncertainty
- Lack of information about a specific thing and the difficulty of anticipating events, leaving us with
unclear outputs. We do not know where the path is headed and how things will develop.
(UNDERSTANDING)
Complexity
- The situation has many interconnected parts and variables. Some info is available or can be
predicted but the volume of it can be overhelming to process. (CLARITY)
Ambigutity
- Causal relationships are completely unknown, lack of clarity and precision or misunderstanding.
(AGILITY)
DEFINITIONS
Organisation:
• An organization is a social system that operates through human activity.
• People work together for a common goal (it is the goal and the strategy of the organization).
• The goal exceeds the capacity of the individual(s). • They strive for surviving and operating effectively.

Management
Management is the organisation and coordination of activities to achieve stated aims and objectives
• planning,
• organizing,
• controlling and • leading
by using an organization’s resources: the financial, physical, information, and human resources in an
effective and efficient way.

Manager
•A manager is someone whose primary responsibility is to carry out the management process within an
organization.
• Managers can be classified by level: top managers, middle managers, and first-line managers
• Managers can also be classified by area: marketing, finances, operations, human resources,
administration, and other specialized fields.

The functions of management

Planning
is the process of setting objectives, and then determining the steps needed to reach them.
subfunctions
- Forecasting: predicting the future with statistical tools, models.
- Defining politics: politics, regulation of operation and behaviour: ways to achieve strategic goals,
e.g., laid-down rules, corporate vision.
- Goal setting: setting quantitative indicators (for working out strategy).
- Programme planning: plan of activities, helps people stay with a right way of performing.
- Scheduling: planning the achievement of objectives over time → reporting results from time to
time.
- Cost analysis: needed for planning costs and revenues.
- Process planning: definition of main, operating processes and supplementary or subprocesses.
Organizing
is the process of assigning duties to personnel and coordinating employee efforts in order to ensure
maximum effectiveness.
Subfunctions
- Resource allocation: aligning tasks and people and other necessary resources
- Job design: develop jobs needed to perform our strategy
- Job description: competencies and capabilitities; + development: specialization, job rotation, job
enrichment
- Coordination: tools to make people work together (e.g., laid-down rules, teamwork)
- Departmentalization, organizational structure: based on activities, knowledge and external
factors (e.g., environment), thoughts of shareholders

Controlling
Controlling is concerned with guiding and regulating the activities of an organisation, or any constituent
parts of the organisation, by means of management judgement, decision, and action, for the purpose of
attaining agreed objectives.
Subfunctions
- Setting standards: norms to compare results and and to communicate to people.
- Monitoring: to oversee processes and people continuously.
- Evaluation: against planned performance, set standards, decision about
- interference in the processes.
- Feedback: positive and/or negative (+ neutral) depending on the results.

Leading
Leading is influencing the behaviour of organizational members; the process of influencing people to
direct their efforts toward the achievement of some particular goals.
Subfunctions
- Selection: sufficient number of employees, choosing from applicants (recruitment).
- Development,training:knowledge,skills,competencies.
- Decision-making: about opportunities, scarce resources,decide between two opportunities or
about something that can be worth realizing.
- Motivation: praise,money,companycar,promotionetc.
- Coaching: relying on knowledge and experience,show the right way to employees.
- Communication: positive results and problems

SEMINAR 2
Managerial roles (Mintzberg)
Interpersonal roles
Managers have interpersonal roles to coordinate and interact with employees and provide direction to
the organization.
- Figurehead role: People taking up this role have to be highly visible to stakeholders and they
have to be recognised as the symbol of the organization (formal power).
- Leader role: It may involve motivating, inspiring, encouraging others. Leaders make people
accept and support their views regarding the mission and vision of the organization they
represent.
- Liaison role: It is used to link and coordinate people inside and outside the organization to help
achieve goals.

Informational roles
Informational roles are associated with the tasks needed to obtain and transmit information for the
management of the organisation.
- Monitor role: It requires managers to analyse information from both the internal and external
environment as a means of making better informed decisions.
- Disseminator role: It refers to how managers transmit information to influence the attitudes and
behaviour of employees. Effective dissemination requires the understanding of the appropriate
media and balance, tone, and nuance of the communication sent.
- Spokesperson role: The spokesperson is the main conduit for information from the organisation
to the outside world, they should be able to communicate the mission and aims of the
organization they represent and present it in a positive but realistic light.

Decisional roles
Decisional roles are associated the methods managers use to plan strategy and utilise resources to
achieve goals.
- Entrepreneur role: Managers need to be able to decide on what new projects or activities to
initiate; invest for making profits; make difference between gaining a competitive advantage or
not.
- Disturbance handler role: Constant changes require managers to take responsibility and address
various forms of disruption affecting the organization.
- Resource allocator role: In this role managers should take a strategic view of resources and
channel them to areas that best support the tactical aims of the organization.
- Negotiator role: Managers need to have negotiation skills appropriate to each stakeholder group
and to work towards a solution that does not compromise the long term aims and objectives of
the organisation.
LECTURE 2

Skills of Managers (1)

Technical skills= hard skills
- the ability to use specific knowledge, techniques, and resources in work.
- understand the specific kind of work done in an organization.
- Technical skills are especially important for first-line managers.
- These managers spend much of their time training their subordinates and answering questions
about work-related problems.

- they must know how to perform the tasks assigned to those they supervise.

Human skills= soft skills

- the ability to work with, communicate with subordinates, and
o understand others,
- motivate both individuals and groups.
- Interacting with people both inside and outside the organization
- Insigth:
o must be able to get along with subordinates, peers, and those at higher levels of the
organization.
- Outsigth:
o A manager must also be able to work with suppliers, customers, investors, and others
outside the organization.

Conceptual skills
- Depend on the manager’s ability to think in the abstract.
- Understand the overall workings of the organization and its environment,
- To grasp how all the parts of the organization fit together, and to view the organization in a
holistic manner.
- This ability allows them to think strategically, to see the “big picture,” to make broad-based
decisions that serve the overall organization.
- The ability to understand the effect of a change

Skills of Managers (2)

- Cultural awareness: awareness of how to deal with diversity.
 - Diagnostic skills: the ability to visualize the most appropriate response to the situation.
- Communication skills: the ability both to convey ideas and information to others and effectively
receive ideas and information from others.
- Decision-making skills: the ability to correctly recognize and define problems and opportunities,
to then select an appropriate course of action to solve problems and capitalize on opportunities.
- Time management skills: the ability to prioritize work, to work efficiently, and to delegate
appropriately.

Managers in different areas:

- Managers use a mix of resources—human, financial, physical, and information—to promote
efficiency and effectiveness. Organizations need managers at multiple levels.
- The most common classifications by level are top, middle, and first- line managers. Large
organizations usually have multiple levels within each of these broad categories.
- Organizations also need managers within different areas, such as marketing, finance,
operations, human resources, sales, and other areas.
- While it may seem like common sense, you should always have an understanding of the level and
area of both your current job and the next job you aspire to have.

1. Marketing Manager
- Marketing managers work in areas related to the marketing function— getting consumers and
clients to buy the organization’s products or services
• Manage marketing mix
• New-product development,
• Promotion,
• Distribution.

2. Financial Manager
- Financial managers deal primarily with an organization’s financial resources.
- They are responsible for such activities as
• accounting,
• cash management,
• investments.
- In some businesses, such as banking and insurance, financial managers are found in especially
large numbers.
3. Operation manager
- An operations manager is responsible for implementing and maintaining the processes that an
organization uses.
- primary objective is to ensure that the company's operations
• run smoothly and efficiently,
• while also achieving strategic goals and
• meeting customer expectations.
- This includes software and other programs that the organization uses to function every day

4. Sales managers
- A sales manager leads and supervises sales teams and oversees the day-to-day sales operations
of a business.
 - This person has a robust set of responsibilities, including
• developing the company's sales strategy,
• setting sales goals,
• and tracking sales performance analytics

5. Human resources managers

- Human resources managers are responsible for hiring and developing employees.
- They are typically involved in human resource planning, recruiting and selecting employees,
training and development,
- designing compensation and benefit systems,
- formulating performance appraisal systems, and discharging low-performing and problem
employees.

6. Specialized managers
- Public relations managers deal with the public and media for firms.
- Research & Developmen managers coordinate the activities of scientists and engineers working
on scientific projects in organizations.
- Project managers plan, organize and execute projects while working within restraints like
budgets and schedules.
- Internal consultants are used in organizations provide specialized expert advice to operating
managers.
- Legal consultants responsible for keeping that company's operations compliant with all the
relevant laws and regulations.

Manager vs Leader
LEADER
- People who can influence the behaviors of
others without having to rely on force
- People whom others accept as leaders
- Formal or informal
- Focuses on energizing people to overcome
hurdles to reach goals.
MANAGER
- A manager is someone whose primary
responsibility is to carry out the
management process within an organization.
- Allocate the resources of the organization
- Focuses on monitoring results, comparing
them with goals and correct deviation
Contemporary Management challenges and issues
Contemporary management challenges
Characteristics of the new workplace that is emerging in organizations today:
- the new workplace is characterized by workforce expansion and reduction.
- Diversity is also a central component, as is the new worker.
- Organization change is also more common, as are the effects of information technology and new
ways of organizing

Contemporary management issues

- Sluggish economy that limits growth.
- Acute labour shortages in high-technology job sectors and an oversupply of less skilled labour
- An increasingly diverse and globalized workforce
- The need to create challenging, motivating, and flexible work environments
- The effects of information technology on how people work
- The complex array of new ways of structuring organizations
- Increasing globalization of product and service markets
- The renewed importance of ethics and social responsibility
- The use of quality as the basis for competition
- The shift to a predominately service-based economy
- The consequences of the coronavirus pandemic

Business ethics
- A company’s actions are guided by a set of moral standards.
- Ethics is an individual’s personal beliefs about whether a behavior, action, or decision is right or
wrong.
- Ethics are associated with individuals and their decisions and behaviors.
o It leads interactions with the government and other enterprises,
o its treatment of employees, and
o its relationships with customers.
- Ethical behavior: behavior that conforms to generally accepted social norms (its opposite is:
unethical behavior)
- Managerial ethics consists of the standards of behavior that guide individual managers in their
work.
- Numerous ethical issues stem from how employees treat the
o individuals in organization. It includes, hiring and firing, wages and working conditions,
and employee privacy and respect.
o the organization, especially in regard to conflicts of interest, secrecy and confidentiality,
and honesty.
- Business ethics affects both the internal organization and the external perception of the
company.
o Internally, having solid ethics can mean having guiding values, fostering a culture of
compliance and enforcing a code of conduct.
o Externally, the ethics of the organization can influence the reputation of the company and
the public perception. It is an opportunity to build trust with customers and avoid costly
legal action.

Dilemmas of social responsibilities

Social responsibility is the set of obligations an organization has to protect and enhance the societal
context in which it functions.

Sustainability, ethics and social responsibility

- Sustainability is usually divided into environmental, social and economic (ESE) dimensions.
- Increasing attention on pollution and business’s obligation to help clean up our environment, the
issue of climate change, business contributions to social causes, and so forth.
- Actions taken towards
 greater protection of the natural environment,
 greater consideration of the social aspects inside and outside the company itself
(including the welfare of workers and impacts on communities and wider society),
 sustainability and ethics that guide business practises and processes in the
broadest sense.

LECTURE 3
Evolution of management theories
Origins of management thought
Early Management Pioneers
- Robert Owen (1771-1858)
- Welsh textile manufacturer (factory owner);
one of the first managers to recognize the importance of human resources and the welfare of
workers.
- He implemented better working conditions, a higher minimum working age for children, meals
for employees, and reduced work hours
- Owen believed that workers deserved respect and dignity.

- Charles Babbage (1792-1871)

- English mathematician;
- focused on creating efficiencies of production through the division of labor, and the application
of mathematics to management problems.
- On the Economy of Machinery and Manufactures: the application of mathematics to such
problems as the efficient use of facilities and materials.

The Basic questions of management

- How can organizational performance, efficiency and
- effectiveness be increased?
o Efficient = using resources wisely and in a cost-effective way
o Effective = making the right decisions and successfully implementing them.
- How can members of the organization be motivated to improve their performance?

Fields of management
 Schools of management

Classical management perspective:

Aspects:
• managing work and organization
• productivity, performance • the ideal organizational structure
• Focus on increasing the efficiency
1.1. Scientific Management
• Concerned with improving the performance of individual workers (i.e., efficiency).
Grew out of the industrial revolution’s labour shortage at the beginning of the 20th century.
1.2. Classical Organization Theory (Administrative Management)
• A theory that focuses on managing the total organization rather than individuals.
1.1Scientific Management
Advocated the application of scientific methods to analyze work
and to determine how to complete production tasks efficiently
Four principles:
 develop a scientific approach for each element of one’s work
 scientifically select, train, teach and develop each worker
 cooperate with workers to ensure that jobs match plans and principles
 ensure appropriate division of labor
Representatives: Frederick W. Taylor, Frank and Lillian Gilbreth, Henry Gantt, Harrington Emerson,
Henry Ford

Frederick Winslow Taylor (1856–1915)

- Replaced old methods of how to do work with scientifically- based work methods to improve
industrial efficiency
o Eliminated “soldiering” where employees deliberately worked at a pace slower than their
capabilities.
- Believed in selecting, training, teaching, and developing workers.
- Used time studies of jobs, standards planning, exception rule of management, slide-rules,
instruction cards, and
- piece-work pay systems to control and motivate employees (rather than paying all employees
the same wage).

Taylor Steps in Scientific Management

1. Develop a science for each element of the job to replace old rule-of-thumb methods.
2. Scientifically select employees and then train them to do the job as described in step.
3. Supervise employees to make sure they follow the prescribed methods for performing their jobs.
4. Continue to plan the work and use workers to actually get the work done.

Frank B. Gilbreth (1868-1924) and Lillian M. Gilbreth (1878-1972)

- Both developed techniques and strategies for eliminating inefficiency.
o Frank reduced the number of movements in bricklaying, resulting in increased output of
200%.
o Lillian made substantive contributions to the fields of industrial psychology and personnel
management.

Henry Laurence Gant (1861-1919)

- mechanical engineer and management consultant
- He divided shipbuilding into processes and tasks, measured and documented the execution of
the tasks, and created special graphs for this himself.
- Gantt-chart

Harrington Emerson (1853-1931)

„Efficiency ingenious”, High Priest of Efficiency
- Nearly 200 companies adopted various features of the Emerson Efficiency system:
o production routing procedures
o standardized working conditions and tasks,
o time and motion studies, and
o a bonus plan which raised workers' wages in accordance with greater efficiency and
productivity
- Railroads – the promotion efficiency
- Books:
o Efficiency (1911);
o The Twelve Principles of Efficiency (1912)

Henry Ford (1863-1947)

Focus: productivity, output, costs
 - massproduction
- assemblyline
- standards
- $5 per day wage
- five 8-hour days a week
People can have the model T in any color- so long as its black

1.2 Classical Organization Theory

- Emphasized the perspective of senior managers
- 5 management functions: planning, organizing, commanding, coordinating, controlling
- 14 principles of management
- Focuses on managing the whole organization rather than
- individuals.
- Representatives: Henri Fayol, Max Weber

Henri Fayol (1841–1925)

Was first to identify the specific management functions of planning, organizing, leading (commanding &
coordinating), and controlling, established 14 principles of Mgmt, distinguished activities of
organisations.
14Principles of management
1. Division of Work: Specialization builds expertise and makes individuals more productive.
2. Authority: The right to issue commands and assume responsibility for their execution.
3. Discipline: Employees must obey, but this is two-sided: employees will only obey orders if
management play their part by providing good leadership.
4. Unity of Command: Each worker should have only one boss with no other conflicting lines of
command.
5. Unity of Direction: People engaged in the same kind of activities must have the same objectives in a
single plan. This is essential to ensure unity and coordination in the enterprise. Unity of command
does not exist without unity of direction but does not necessarily flow from it.
6. Subordination of individual interests (to the general interest): Management must ensure that the
goals of the organisation take priority over the interest of its individual members.
7. Remuneration: Payment and rewards are important motivators, although by analysing a number of
possibilities, Fayol pointed out that there is no such thing as a perfect system.
8. Centralization or Decentralization: Managers must decide on the appropriate balance between the
two, depending on the state of the organisation and the quality of its personnel.
9. Scalar chain (Line of Authority): A hierarchy of authority is necessary for unity of direction but there
must be lateral communication, i.e., communication between people at the same level in the
organisation structure, as well. (An organisation consists of superiors and subordinates. The formal
lines of authority from highest to lowest ranks are known as scalar chain.)
10. Order: Both social order and material order (orderly purchasing and usage of materials) are
necessary. The social order is achieved through organization and selection. The material order
minimizes lost time and useless handling of materials.
11. Equity: Fair treatment for all employees to achieve equity. In running a business, a ‘combination of
kindliness and justice’ is needed.
12. Stability of Tenure of Personnel (employee retention): Low turnover, meaning a stable work force
with high tenure, benefits an organization by improving performance, lowering costs, and giving
employees, especially managers, time to learn their jobs. Employees work better if job security and
career progress are assured to them. An insecure tenure and a high rate of employee turnover will
affect the organization adversely.
13. Initiative: All employees should be encouraged to exercise initiative in some way, which provides
source of strength for the organization. Even though it may well involve a sacrifice of ‘personal
vanity’ on the part of many managers.
14. Esprit de Corps (Morale): Management must foster the morale (reach high levels of motivation) of
its employees. Fayol further suggests that: “real talent is needed to coordinate effort, encourage
keenness, use each person’s abilities, and reward each one’s merit without arousing possible
jealousies and disturbing harmonious relations”.

Max Weber (1864–1920)

His theory of bureaucracy is based on a rational set of guidelines for
structuring organizations.
Max weber’s Bureaucracy
- Bureaucratic structures can eliminate the variability that results when managers in the same
organization have different skills, experiences, and goals
- Bureaucracy allows large organizations to perform the many routine activities necessary for their
survival
- Elements of bureaucratic organizations:
o Qualification-based hiring
o Merit-based promotion
o Chain of command
o Division of labor
o Impartial application of rules and procedures
o Recorded in writing
o Managers separate from owners
- People should be treated in unbiased manner

Classical management perspective

The classical management perspective had two primary tenor:
Scientific management focused on employees within organizations and on ways to improve their
productivity.
Organization management focused on the total organization and on ways to make it more efficient
and effective.
Contributions Limitations
+ Laid the foundation for later developments. ‒ More appropriate approach for use in
+ Identified important management processes, traditional, stable, simple organizations.
functions, and skills. ‒ Prescribed universal procedures that are not
+ Focused attention on management as a valid appropriate in some settings.
subject of scientific inquiry. ‒ Employees are viewed as tools rather than as
resources.
Behavioural management perspective
Emphasized individual attitudes and behaviours, and group processes, and recognized the importance of
behavioural processes in the workplace.
2.1. Human Relations Movement
2.2. Organizational Behaviour

Mary Parker Follett (1868-1933)

“mother” of Behavioural Management
- Recognized the importance of the role of human behaviour in the workplace
- Allowing self-managed groups: „not power over, but with workers”
 - Networking, knowledge sharing
- authority of expertise

The Hawthorne Studies (1924/27-1932)

Conducted by Elton Mayo (1880–1949) and associates at GE/WE
- Illumination study—workplace lighting adjustments affected both the control and the
experimental groups of production employees.
- Group study—implementation of piecework incentive plan caused production workers to
establish informal levels of acceptable individual output.
o Over-producing workers were labeled “rate busters” and under-producing workers were
considered “chiselers.”
- Interview program—confirmed the importance of human behaviour in the workplace.
- Bank Wiring Observation Room Program – 14 workers were formed into a work group and
observed for 7 months
- The incentive pay plans did not work because wage incentives were less important to the
individual workers than was social acceptance

2.1 Human Relations Movement

Grew out of the Hawthorne studies – workers perform and react differently when researchers observe
them = received special attention and sympathetic supervision Hawthorne Effect
- Proposed that workers respond primarily to the social context of work, including social
conditioning, group norms, and interpersonal dynamics.
- Assumed that the manager’s concern for workers would lead to increased worker satisfaction
and improved worker performance.
- Aimed to understand how psychological and social processes interact with the work situation to
influence performance
- Argued that managers should stress primarily employee welfare, motivation, and communication
- Representatives: Elton Mayo, Abraham Maslow

Maslow’s Hierarchy of Needs

Abraham Harold Maslow (1908-1970)
- Advanced a theory that employees are motivated by a hierarchy of needs that they seek to
satisfy.

2.2. Organizational Behaviour

Studies management activities that promote employee effectiveness
- investigates the complex nature of individual, group, and organizational processes
- Representatives: Douglas McGregor, Kurt Lewin, Chester Barnard, Herbert Simon
- this field include job satisfaction, stress, motivation, leadership, group dynamics, organizational
politics, interpersonal conflict, and the structure and design of organizations.

Douglas McGregor (1906-1964)

Proposed Theory X and Theory Y concepts of managerial beliefs about people and work
 - Theory X: managers assume that workers are lazy, irresponsible, and require constant
supervision
- Theory Y: managers assume employees want to work and control themselves
- What a manager expects of his subordinates and the way he treats them largely determine their
performance and career progress.
- An unique characteristic of superior managers is their ability to create high performance
expectations that subordinates fulfill.

Kurt Lewin (1890-1947)

- Leadership styles: authoritarian, democratic, laisses-faire
- Force field analysis, action research, change process, Lewin's equation, group dynamics
Chester Irving Barnard (1886–1961)
- „The Functions of the Executive” (1938)
- Communication system, theories of authority and incentives
Herbert Alexander Simon (1916–2001)
- Decision-making
- Artificial intelligence, psychology, sociology and economics

Behavioral management perspective

... focuses on employee behavior in an organizational context. Stimulated by the birth of industrial
psychology, draws from an interdisciplinary base and recognizes the complexities of human behavior in
organizational settings.
Contributions Limitations
+ Provided important insights into motivation, - Complexity of individuals makes behavior
group dynamics, and other interpersonal difficult to predict.
processes. - Contemporary research findings are not often
+ Focused managerial attention on these critical communicated to practicing managers in an
processes. understandable form.
+ Challenged the view that employees are tools
and furthered the belief that employees are
valuable resources.

Quantitative Management perspective

Emerged during World War II to help the Allied forces manage logistical problems.
- Focuses on decision making, economic effectiveness, mathematical models, and the use of
computers to solve quantitative problems.
- Teams of quantitative experts tackle complex issues that large organizations face.
- Helps management make a decision by developing formal mathematical models of the problem.
- Representatives: military planners in World War II

3.1. Management Science

- Focuses on the development of representative mathematical models to assist with decisions.
- Linear Programming, Game Theory, Sampling Theory, Probability Theory, Simulation, etc.

3.2. Operations Management

- Practical application of management science to efficiently manage the production and distribution
of products and services.
- Quality Contol, Total Quality Management, Just In Time Technique, Six Sigma, etc.

Quantitative Management Perspective...

- The quantitative management perspective focuses on applying mathematical models and processes
to management situations. Management information systems are developed to provide information
to managers.

Contributions
- + Developed sophisticated quantitative
techniques to assist in decision making.
- + Application of models has increased our
awareness and understanding of complex
processes and situations.
- + Has been useful in the planning and
controlling processes.
Limitations
- Quantitative management cannot fully
explain or predict the behavior of people in
organizations.
- Mathematical sophistication may come at
the expense of other managerial skills.
- Quantitative models may require unrealistic
or unfounded assumptions, limiting their
general applicability

Integrating the major perspectives

4.1. The Systems Perspective (Open Systems)
A system is an interrelated set of elements functioning as a whole.

4.2. The Contingency Perspective

Appropriate managerial behaviour in a given situation depends on (or is contingent on) a wide variety of
elements.
Universal Perspective
- Includes the classical, behavioural, and quantitative approaches.
- An attempt to identify the “one best way” to manage organizations.
The Contingency Perspective
- Suggests that each organization is unique.
- The appropriate managerial behaviour for managing an organization depends (is contingent) on
the current situation in the organization.
LECTURE 4
Planning
Planning is the process of setting objectives, and then determining the steps needed to reach them
Subfunctions:
 Forecasting: predicting the future with models or with the help of computers
 Defining politics: ways to achieve strategic goals, laid-down rules, politics of operation and
behavior
 Goal setting: to work out strategy, to set quantitative indicators
 Programme planning: help people stay with a right way of performing
 Scheduling: report about results from time to time
 Cost analysis: plan the costs and revenues
 Process planning: main, operating processes and supplementary- or subprocesses

Definitions
A plan is a formal statement of intent that identifies goals and objectives and how they are to be achieved.
A goal is an identified outcome that has been chosen and
an objective is an aim that can be measured and achieved within a stated timeframe.

The Planning process

Advantages of planning
- Systematic approach to achieving aims and goals (potential source of innovation & creativity,
thus competitive advantage)
- Control of activities— which activities needs to be undertaken
- Helps mitigate risk by introducing a measure of control on future events
- Helps the allocation of resources to those activities that deliver goals & objectives

SMART
A model for setting targets:
- Specific: identifying key aspects of performance that can be measured.
- Measurable: identifying key aspects of performance that can be quantified.
- Achievable: specified outcome that is capable of being met.
- Relevant (Realistic): Is the target aligned with objectives? (specified rewards for achieving set
targets)
 - Timely (Time-bound): timeframe set for achieving stated outcomes.

Levels of planning managers

Strategic goals
A goal set by and for top management of the organization.
Tactical goals
A goal set by and for the middle managers of the organization
Operational goals
A goal set by and for the lower-level/ first line managerrs of the organization

Strategic plans The overaching plan, how we achieve the goal, The big picture , The approach you
take to achive the goal
- set by a board of directors
- developed to achieve the strategic goal(s) and Mission
- for an extended time horizon (3 / 5 / 10 years)
- 3-5 main directions to achive goals and objective
- general plans outlining decisions of resource allocation, priorities, and action steps necessary to
reach strategic goals.
- plans that address questions of scope, resource deployment, competitive advantage, and
synergy
Tactical plans Tactic is a concrate group of activities taken to execute our strategy (one strategic pillar
has 3-5 tactics to achive)
- are aimed at define and achieve tactical goals
- are developed to implement specific parts of the strategic plan
- involve middle management
- have a somewhat shorter time horizon (1-3 years)
- have more specific and concrete focus
- are more concerned with getting things done than deciding what to do
Operational plans ONE concrate task to solve a specific problem
 - focus on carrying out tactical plans to achieve organisational goals
- are developed by fist-line (lower-level) managers
- have a short-term focus
- are relatively narrow in scope
- deal with a small set of activities
- Two subtypes:
o Single-use plans: Developed to carry out a course of action not likely to be repeated in

the future (e.g., a programme or a project)

o Standing plans: Developed for activities that recur regularly over a period of time (e.g.,
policy, standard operating procedure, rules and regulations).

Types of Plans, Time frames

Long term planning, intermediate planning, short-term planning

Levels and time frames

Timeframes of Plans and Goals

Goals across different timeframes
- explicit timeframe (open 150 new restaurants during the next 10 years)
- open-ended horizon (maintain 10% annual growth)
Meaning of the timeframes varies by level:
- @ strategic level: “long term” means 5-10 years or longer; “intermediate term” means 3-5 years
or so; “short term” means around 1 year
- @ operational level: 2 or 3 years may be long term; short term may mean a matter of weeks or
days
The business plan- components
- Executive summary: an overview of the whole concept or business
- Business profile: a description of your business
- Product/service/market analysis: chosen market and position in the market
- Marketing plan: strategies to attract and keep clients – influence the direction of the entire
organization
- Legal and risk management plan: business protection planning
- Operating plan: how the business works
- Management and personnel plan: skills and experience (human resources)
- Finance plan: investment, expected turnover and profit, cash flow projections
- The action plan: what you will do and when

Business continuity planning

Is more important than ever!

Contingency planning:
- Dealing with situations that (in)directly affect the operations and objectives
- Constituting a ’Plan B’ if ’Plan A’ fails
- Depends on the nature of the business (e.g., emergency funds)
- Most are implemented at the operational level (e.g., quickly changing production schedules)
- Have to be built into the strategic plans of organizations
Scenario planning
Scenario: imagined sequence of future events.
Structured way for organisations to think about the future.
Develop a small number of scenarios—stories – about how the future might unfold and how this might
affect an issue that confronts them.

Succession planning
- Stage 1 identify critical roles
- Stage 2 conduct role analysis
- Stage 3 design succession plan
- Stage 4 monitor, evaluate, and revise