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Planning
 Planning is Fundamental

• All of the other management functions

stem from planning
• How do you plan for an undefined
future?
• No plan is perfect
– Without plans and goals,
organizations flounder

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 Goals and Plans

A goal is a desired future state that the

organization attempts to realize

PLANNING
-INCORPORATES BOTH

A plan is a blueprint for goal

achievement and specifies the
necessary resource allocations,
schedules, tasks, and other
actions

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 Goals and Plans

Goal + Plan  Planning

Goal- determining the organization’s goal
Plan- defining the means for achieving goal

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7.1 Levels of Goals and Plans

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 7.2 The Organizational
Planning Process

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 Goal Setting in Organizations

• Organizational Mission – the organization’s reason for existence,

basic purpose of the org., esp. for external audiences.
• Strategic goals – official goals, broad statements describing the
organization’s future
• Strategic plans – define the action steps the company will take
• Tactical goals- major divisions and departments intend to achieve
• Tactical plans-shorter time horizon than strategic plans
• Operational goals-specific, measurable results, expected from
dep., work groups and individuals
• Operational plans-support tactical activities

Goals should be aligned !

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 7.4 A Strategy Map for
Aligning Goals

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 Operational Planning

• Direct employees and resources toward

achieving specific outcomes
• Guide efficient and effective performance
• Includes planning approaches:
– Management by Objectives (MBO)
– Single-Use Plans
– Standing Plans

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 7.5 Criteria for Effective
Goal Setting

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 7.6 Model of the MBO Process

• Defined in 1954 by Peter Drucker

• Method for defining and monitoring goals

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 7.7 MBO Benefits

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 Single-Use and Standing Plans

Single-Use Plans
– Achieve one-time goal
– Programs and Projects

Standing Plans
– Ongoing plans
– Situations occur repeatedly
– Policies, rules, procedures
– Pertain to employee illness,
absences, discipline, hiring, etc.
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 Types of Single-Use and
Standing Plans

• Single-Use Plans
– Program: building new headquarters, converting
paper files to digital
– Project: renovating the office, setting up a new
company intranet
• Standing Plans
– Policy
– Rule
– Procedure

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 Planning for a Turbulent Environment

• Contingency Planning
– Planning for emergencies, setbacks, or unexpected conditions
– Focusing on the worst case
– Factors: economic downturns, declining markets, increases in cost of supplies, new
technological developments, labor strikes, etc.

• Building Scenarios
– A forecasting technique to look at current trends and visualize future possibilities
– Scenarios: stories that offer alternative vivid pictures of what the future will be like and how
managers will respond
– 2-5 scenarios are developed, ranging from the most optimistic to the most pessimistic view

• Crisis Planning
– Sudden, devastating, unexpected events
– Crisis Management Plan (CMP) include natural disasters, economic crises, act of terrorism

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 7.9 Essentials Stages of
Crisis Planning

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 Strategy Management

• Every company is concerned with strategy

– It determines which organizations succeed and
which ones struggle
– Strategic blunders can hurt a company

• Strategic management is a specific type of

planning

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 Thinking Strategically

• The long-term view of the organization and

competition
• Thinking strategically impacts performance and
financial success
• Today’s environment requires everyone to think
strategically

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 Strategic Management

Decisions and actions used to formulate and

execute strategies that will provide
competitively superior fit between the
organization and its environment to achieve
organizational goals

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 Purpose of Strategy

Competitive advantage is the organization’s distinctive edge for meeting

customer needs
Strategies should:
• Exploit Core Competencies-something the org. does especially well in
comparison to its competitors; superior R&D, expert technological know-how,
process efficiency, exceptional customer service.
• Build Synergy-org.’s parts interact to produce a joint effect that is greater than
the sum of the parts acting alone; PepsiCo buy Frito-Lay, Oracle buy Sun
Microsystems; or by good relationship between organizations i.e DC invites
magazines to visit the sets of shows, give reporters access for interviews and
photo shoots
• Deliver Value-combination of benefits received and cost paid; value package-
combination of basic cable, digital premium channels, video-on-demand, high-
speed internet, and digital phone service for a reduced cost

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 8.1 Levels of Strategy

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Corporate-level strategy: relate to the acquisition of new
businesses; additions or divestments of business units, plants,
or product lines and joint ventures with other corporations in
new areas.
Business-level strategy: advertising, direction and extent or
research and development, product changes, new –product
development, equipment and facilities and expansion or
contraction of product and service lines.
Functional-level strategy: finance, R&D, marketing and
manufacturing

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 SWOT Analysis

• Formulating strategy often begins with an audit

of internal and external factors
– Internal Strengths and Weaknesses
– External Opportunities and Threats

• Information is acquired from reports, surveys,

discussions, and meetings

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8.2 The Strategic Management Process

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 Strategy Formulation
versus Execution

Formulation: Execution:
Assessing the external the use of managerial
environment and and organizational
internal problems to tools to direct
create goals and resources toward
strategy accomplishing
strategic results

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 8.3 SWOT: Audit Checklist

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 Formulating Functional-Level Strategy

Action plans used by major departments

 Marketing
 Production
 Finance
 Human Resources
 Research and Development

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 Strategy Execution

The final step!

• “Strategy is easy, but execution is hard”
– Most important but most difficult part

• Strategy must be skillfully executed

• Alignment requires all aspects of the
organization to focus on strategy goals
– Everyone is moving in the same direction

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8.8 Six Silent Killers of Strategy

A laissez-faire leader is
disengaged, showing low task
and people concerns.

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 8.9 Tools for Putting
Strategy into Action

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