Professional Documents
Culture Documents
Types of Plans
Purposes or Missions (basic function or task of an org.) Objectives (ends or results towards an activity is aimed) Strategies (approach used to implement a plan) Policies (general statement which guide the thinking in decision making) Procedures (detailed method of achieving any activity) Rules (specific required actions allowing no discretion) Programs (composed of goals, policies, procedures, rules, task assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action and may be supported by budgets) Budgets (statement of expected results in numerical terms)
7.2
Functions of Planning
1) Discover new opportunities 2) Anticipate and avoid future problems 3) Developing effective courses of action 4) Comprehend the uncertainties and risks with various options
Steps in planning
Being
aware of opportunities Setting objectives or goals Considering planning premises Identifying alternatives Comparing alternatives in the light of goals sought Choosing an alternative Formulating supporting plans Numberizing plans by making budgets
Objectives
Are
important ends towards which individual and organizational activities are directed Objectives chosen should be verifiable
Socio-economic purposeBoard of Directors & Top mgt. MissionBoard of Directors & Top mgt. Overall objectives of the organization (long range & strategic)..Top mgt. Division objectivesmiddle mgt. Dept. & unit level objectives..lower level managers Individual objectives (performance & personal development objectives).. lower level managers
MBO
MBO
is a comprehensive managerial system that integrates many key managerial activities in a systemic manner & that is consciously directed toward the effective & efficient achievement of organizational & individual objectives.
Growth of MBO
First
systemic effort by Drucker (1954) GE used MBO to decentralize managerial decision making by identifying KRA and a measurement of performance 1957 McGregor criticized the traditional performance management sys.which emphasized on personality He suggested short term objectives (individual goal setting) to be reviewed in a timeframe by superiors.
Growth of MBO
Emphasis
only on short term goal has limitation so long term goals also emphasized (strategic planning)
preliminary objectives at the top Clarifying organizational roles Setting subordinate objectives Recycling objectives Quantitative & qualitative objectives
Review Progress Step 3: Reviewing Progress Corrective Action Appraisal Of Overall Performance Step 4: Appraising Overall Performance
Single-Use Plans
For Goals Not Likely To Be Repeated
A
program is a complex set of objectives and plans to achieve an important, onetime organizational goal project is similar to a program, but generally smaller in scope and complexity
Standing Plans
A
policy is a general guide to action and provides direction for people within the organization Rules describe how a specific action is to be performed Procedures define a precise series of steps to be used in achieving a specific job Total quality management (TQM) to improve quality and production.
7.3
Strategic Planning
Strategic planning is the process of:
Diagnosing the organizations external and internal environments Deciding on a vision and mission Developing overall goals Creating and selecting general strategies to be pursued Allocating resources
7.4
Tactical Planning
Tactical planning involves making concrete decisions regarding:
What to do
Low to moderate
7.7
G.E.
Proflowers.com
Low
Singlebusiness firm Dominant- Relatedbusiness business firm firm
Low High
Unrelatedbusinesses firm
Level of Diversification
7.8
Business Level
Marketing
Functional Level
Finance
Profit margin Debt-equity ratio Inventory ratio Return on investment Credit rating
Corporate Strategic Approach BCG Matrix Parameters :market growth & relative market share Cash cow: Market growth rate low & relative market share high Star: market share high, growth rate high Q mark: market share small, growth rate high Under dogs: low market share low or stagnant growth
Growth Strategies
Forward
7.9
Finance
What is the desired mixture of borrowed funds and equity funds? What goods or services should be emphasized? What should be the level of commitment to total quality?
Marketing
Operations (manufacturin g)
7.12
Differentiation strategy
Strategic Target
Focus strategy
Narrow Uniqueness Low Cost (price)
Source of Advantage
7.13
Feature
Premium Quality Brand image Technological leadership
Company Examples
Toyota Mercedes-Benz Honda
Differentiation
7.14
Feature
Careful identification of target market (niche) Cost leadership emphasis or differentiation emphasis applied to a specific niche Constant review of customer demand in niche Create a unique image for the products
Focus
7.15
Utilizing facilities or equipment that yield high economies of scale Constantly striving to reduce per unit overhead, manufacturing, marketing, labor and follow-up service costs Minimizing the labor-intensive personal services and sales forces Avoiding customers whose demands would result in high personal selling or service costs
Strategy
Performance