Ch. 5 Notes
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This 3 page Class Notes was uploaded by Stephanie Donovan on Thursday February 19, 2015. The Class Notes belongs to MGMT 301 at Pennsylvania State University taught by Ronald Johnson in Winter2015. Since its upload, it has received 44 views.
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Date Created: 02/19/15
Management 301 Chapter 5 51 How and Why Do Managers Use the Planning Process planning the process of setting performance objectives and determining how to accomplish them Planning is one of the four functions of management a MGMT process planning leading organizing controlling b effective planning is essential to staying ahead of the competition ll Planning is the process of setting objectives and identifying how to achieve them a Step 1 define objectives i objectives speci c results that one wishes to achieve b Step 2 determine where you stand visavis objectives i establishes a baseline for performance c Step 3 develop premises regarding future conditions d Step 4 make a plan i plan a statement of intended means for accomplishing objectives e Step 5 implement the plant and evaluate results Good planning makes us i action oriented ii priority oriented iii advantage oriented iv change oriented lll Planning Improves focus and action orientation a planning can sharpen focus and increase exibility b an organization with exibility is willing to change c complacency trap is being lulled into inaction by current successes or failures IV Planning improves coordination and control a organizations consist of people and subsystem b hierarchy of objectives lowerlevel objectives help to accomplish higher levelones c total quality management i mission and purpose ii top management objective iii senior management objective iv middle management objective v lower management objective d good planning sets the stage for controlling in management process V Planning improves time management a executives have tight schedules little time alone and a lot to do b they have to balance timeconsuming commitments h 52 What types of Plans Do managers use managers face different planning challenges throughout their work I Managers use shortrange and longrange plans Management 301 Chapter 5 2 a top managers agree that longrange planning is becoming shorter and shorter b shortrange plans usually cover a year or less c longrange plans usually cover three years or more d Management researcher Elliot Jaques found very few people think in the longrange ll Managers use strategic and Operational plans a strategic plan identi es longterm directions of the organization i long term plans set broad and comprehensive directions for an organization b vision clari es the purpose of the organization and expresses what it hopes to be in the future c operational plan or tactical plan sets out ways to implement a strategic plan i shortterm and stepbystep d functional plan identi es how different parts of an enterprise will contribute to accomplishing strategic plans i functional plans may include 1 nancial plans 2 facilities plans 3 marketing plans 4 human resource plans 5 production plans lll Organizational policies and procedures are plans a need plans that have daytoday guidance b that is why there are policies and procedures c policy a standing plan that communicates broad guidelines for decisions and action i broader guidelines ii address promotions hiring ring discipline sexual harassment d procedure or rule precisely describes actions to take in speci c situations i de nes speci c actions to be taken IV Budgets are plans that commit resources to activities a budget a plan that commits resources to projects or activities b managers usually negotiate with their bosses to obtain budgets c different types of budgets i nancial budgets ii operating budgets iii nonmonetary budgets iv xed budgets v exible budgets d budgets link planned activities with resources needed to accomplish them e zerobased budget allocates resources as if each budget was brand new 53 What are Some Useful Planning Tools and Techniques Forecasting tries to predict the future a forecasting attempts to predict the future Management 301 Chapter 5 VI b Business Week Fortune and The Economist report forecasts of industry conditions interest rates employee rates national economies and other issues c there are quantitative and qualitative forecasting Contingency planning creates backup plans for others when things go wrong a best managers have alternative plans when things don t go the way they expected b contingency planning identi es alternative courses of action to take when things go wrong i good contingency plans have quottrigger pointsquot 1 activates alternatives Scenario planning crafts plans for alternative future conditions a scenario planning identi es alternative future scenarios and makes plans to deal with each i longterm version of contingency planning b this approach was developed by Roy DutchShell c involves descriptions of quotworst casesquot and quotbest casesquot Benchmarking identi es best practices used by others a tendency of mangers con dence tricks them into thinking the future will be successful b benchmarking uses external comparisons to gain insights for planning i ex football coaches go watch other teams to see how they do what they do ii used to discover what other people and organizations are doing iii a way of learning success rom others c best practices are methods that lead to superior performance Participatory planning improves implementation capacities a participatory planning includes the person who will be affected by plans andor who will be asked to implement them i has advantages of group decision making ii can increase creativity and available resources iii increases understanding and acceptance of plans Goal setting helps align plans and activities throughout an organization a planning system where employees work with speci c goals b if you want to be successful the goals and objectives should be good ones c stretch goals are performance targets that we have to work extra hard and stretch to reach d good goals are i speci c ii timely iii measurable iv challenging v attainable e managers must make sure goals and plan work for one person or helps to accomplish the goals of a group f goals link together across in a consistent quotmeanends manner
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