Managerial functions - planning

What is planning?
• Planning is a process that managers use to
identify and select appropriate goals and
courses of action for the organization

• Thus, planning is both a goal-making and a

strategy-making process
 The planning process

Setting objectives Resources allocation

Creating solutions Implementation

Monitoring
Time structuring

Evaluating results
 Levels of planning
• In large organizations, planning usually takes
place at three levels of management:
corporate, business or division, and
department or functional
• Example GE
 CEO

corporate Corporate
Office

GE
GE GE GE GE GE GE
Healthc
Additive Aviation Capital Lighting Digital Power
are

divisional

Manuf
Accou Marke
acturi R&D
nting ting
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functional
 Who plans?
• Corporate-level planning is the responsibility of
top managers
• However, other managers (divisional,
functional) have input to corporate-level
planning
• Corporate-level managers are responsible for
approving business and functional level plans so
that they are consistent with the corporate level
plan
 Time horizons of plans
• Long term plans – time horizon of more than 5
years
• Intermediate plans – time horizon 1-5 years
• Short term plans – less than 1 year
 Determining the organization’s mission
statement
• To determine an organization’s mission,
managers must first define its businesses so
that they can identify what kind of value they
will provide to customers
• 3 questions
– Who are our customers?
– What needs of our customers do we serve?
– How are we satisfying our customers’ needs?
 Examples of mission statements
• We rise to the challenge of building a world
that works
• Our mission: to inspire and nurture the human
spirit – one person, one cup and one
neighborhood at a time.
• To deliver transformative security technologies
to the world's users and organizations.
 Examples of Mission Statements
• GE
• Starbucks
• Bitdefender
 SWOT analysis
• Strengths
• Weaknesses

• Opportunities
• Threats
 Corporate-level strategies
• Refer to a plan of action concerning which
industries and countries an organization
should invest its resources in to achieve its
mission and goals
– Concentration on a single business (McDonald’s)
– Diversification (GE)
– Vertical integration
– International expansion (global vs. multidomestic
strategy)
 Formulating Business-Level Strategies

• Low-cost strategy
• Differentiation
• Focused low-cost
• Focused differentiation
• “Stuck in the Middle”
• Exceptions
Formulating Functional Level strategies

• Lower costs

• Differentiate

• 4 building blocks of competitive advantage