Chapter 5 MGT 250
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This 5 page Class Notes was uploaded by Stephanie De Angelis on Tuesday February 16, 2016. The Class Notes belongs to MGT 250 at Pace University - New York taught by Professor Bhandari in Winter 2016. Since its upload, it has received 42 views. For similar materials see Managerial and Organizational Concepts in Business, management at Pace University - New York.
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Date Created: 02/16/16
Chapter 5 : Planning The Foundation of Successful Management Vocabulary Action Plan defines the course of action needed to achieve the stated goal Business Model outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses Business Plan a document that outlines a proposed firm’s goals, the strategy for achieving them, and the standards for measuring success Cascading objectives down through the organization; that is, objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization Goal a specific commitment to achieve a measurable result within a stated period of time Management by Objectives a fourstep process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee’s performance, and (4) the manager makes a performance appraisal and rewards the employee according to results Meansend Chain goals arranged in a hierarchy because in the chain of management (operational, tactical, strategic), the accomplishment of lowlevel goals in the means leading to the accomplishment of highlevel goals of ends Mission the purpose or reason for being Mission Statement expresses the purpose of the organization Objective a specific commitment to achieve a measureable result within a stated period of time Operating Plan how you will conduct your business based on the action plan within the next year; it identifies clear targets such as revenues, cash flow, and market share Operational Goals set by and for firstline managers and are concerned with shortterm matters associated with realizing tactical goals Operational Planning determining how to accomplish specific tasks with available resources within the next 152 weeks Planning setting goals and deciding how to achieve them; coping with uncertainty by formulating future courses of action to achieve specified results Planning/control Cycle has two planning steps (1) make the plan and (2) carry out the plan; as well as two control steps (3) control the direction by comparing results with the plan and (4) control the direction by taking corrective action in two ways namely (a) by correcting deviations in the plan being carried out or (b) by improving future plans Policy a standing plan that outlies the general response to a designated problem or situation Procedure a standing plan that outlines the response to particular problems or circumstances Program a singleuse plan encompassing a range of projects or activities Project a singleuse plan of less scope and complexity than a program Rule a standing plan that designated specific required action Singleuse Plan plans developed for activities that are not likely to be repeated in the future SMART goal one that is Specific, Measurable, Attainable, Resultsoriented, and Target dates Standing Plan plans developed for activities that occur repeatedly over a period of time Strategic Goals set by and for top management and focus on objectives for the organization as a whole Chapter 5 : Planning The Foundation of Successful Management Strategic Management a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals Strategic Planning determine what the organization’s longterm goals should be for the next 15 ears with the resources they expect to have available Strategy a largescale action plan that sets the direction for an organization Tactical Goals set by and for middle managers and focus on the actions needed to achieve strategic goals Tactical Planning determining what contributions their departments or similar work units can make with their given resources during the next 624 months Vision a longterm goal describing “what” an organization wants to become. It is a clear sense of the future and the actions needed to get there Vision Statement expresses what the organization should become, where it wants to go strategically Chapter 5 : Planning The Foundation of Successful Management 5.1 Planning & Strategy Planning, Strategy, & Strategic Management Planning: Coping with Uncertainty o By making a plan, you make a blueprint for action that describes what you need to do to realize your goals o Business plan and business model helps describe the basic idea behind your business Strategy: LargeScale Action Plan o It represents an “educated guess” about what must be done in the long term for the survival or the prosperity of the organization or its principal parts o It cannot be decided on just once. Must be revisited from time to time Strategic Management: Involving All Managers in Strategy o Is a process that involves managers from all parts of the organization o Planning and strategic management derive from an organization’s mission and vision about itself: 1. Establish the mission and vision 2. Assess the current reality 3. Formulate the grand strategy & strategic tactical, & operational plans 4. Implement the strategy 5. Maintain strategic control Why Planning & Strategic Management Are Important o An organization should adopt planning and strategic management for three reasons o Providing direction & momentum o Encouraging new ideas o Developing a sustainable competitive advantage 5.2 Fundamentals of Planning Mission & Vision Statements o Approach to planning o Mission statement What is our reason for being Identifies goods or services the organization provides or will provide o Vision statement What do we want to become Chapter 5 : Planning The Foundation of Successful Management What’s happening to the world you compete in and what you want to do about it Should guide decisions o Strategic planning (top management) Done by top managers for the next 15 years Goals Action plans Should communicate not only general goals about growth and profits but also ways to achieve them o Tactical planning (middle management) Done by middle managers for the next 624 months Goals Action plans o Operational planning (firstline management) Done by firstline managers for the next 152 weeks Goals Action plans 5.3 Goals & Plans Three Types of Goals: Strategic, Tactical, & Operational o Meansend chain o Strategic goals o Tactical goals o Operational goals The Action Plan & the Operating Plan o The goal should be followed by an action planning, possibly a marketing plan on a sales plan Types of Plans: Standing Plans & SingleUse Plans o Standing plan o Policy o Procedure o Rule o Singleuse plan o Program o Project 5.4 Promoting Goal Setting: SMART Goals & Management by Objectives SMART Goals o Consist of o Specific o Measurable Chapter 5 : Planning The Foundation of Successful Management o Attainable o Resultsoriented o Target dates Management by Objectives: The FourStep Process for Motivating Employees o Process includes o Managers and employees jointly set objectives for the employee Improvement objectives Personal development objectives Maintenance objectives o Managers develop action plans o Managers and employees periodically review the employee’s performance o The manager makes a performance appraisal and rewards the employee according to results Cascading objectives: MBO from the Top Down o Top management must be committed o It must be applied organizationwide o Objectives must “cascade” The Importance of Deadlines o Deadlines can help concentrate the mind, so that you make quick decisions rather than put them off o Help you ignore extraneous matters 5.5 The Planning/Control Cycle
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