Organizational Planning Chapter MANAGEMENT Meeting and Exceeding Customer Expectations EIGHTH EDITION Prepared by Deborah Baker Texas Christian University Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved learning objectives Explain the importance of planning Describe the importance of an organization’s mission statement Discuss the purposes of strategic, tactical, operational, and contingency plans Explain the relationships between strategic, tactical, and operational goals List and explain the steps in a basic planning Chapter process Discuss various ways to make plans effective Describe the barriers to planning Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Planning 11 Chapter Planning Planning Preparing for tomorrow, today Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Planning Responsibilities 11 Construct, Construct, review, review, and/or and/or rewrite rewrite organization’s organization’s mission mission Chapter 1 2 Identify Identify and and analyze analyze their their opportunities opportunities 3 Establish Establish the the goals goals they they wish wish to to achieve achieve 4 Identify, Identify, analyze, analyze, and and select select the the course(s) course(s) of of action action required required to to reach reach goals goals 5 Determine Determine resourced resourced needed needed to to achieve achieve goals goals Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 22 Mission Statement Chapter Mission Mission Statement Statement When a mission is formalized in writing and communicated to all organizational members Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 22 Mission Statement  Includes references to core values and principles  Serves as an operational and ethical guide  Serves as the foundation and coordinating Chapter device for the: – execution of management functions – behaviors of organizational members – shaping of the organization’s culture Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 22 Mission Statement Questions What Whatisisour ourbusiness? business? Chapter What Whatshould shouldititbe? be? From Peter Drucker Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 22 Rules for Mission Statements Rule Rule#1: #1: Keep Keepthe thestatement statementsimple; simple;not notnecessarily necessarilyshort, short,but but simple simple Rule Rule#2: #2: Allow Allowcompanywide companywideinput input Rule Rule#3: #3: Involve Involveoutsiders outsiders They Theycan canbring bringclarity clarityand andaafresh fresh perspective perspectiveto tothe thestatement-writing statement-writingprocess process Rule Rule#4: #4: Develop Developthe thewording wordingand andthe thetone toneto toreflect reflectthe the company’s company’spersonality personalityor orwhat whatthe thecompany companywould wouldlike liketo tobe be Chapter Rule Rule#5: #5: Share Sharethe themission missionstatement statementin inas asmany manycreative creativeways ways as aspossible possibleand andin inas asmany manylanguages languagesas asnecessary necessary Keep Keepititin in front frontof ofpeople peopleconstantly constantly Rule Rule#6: #6: Rely Relyon onthe themission missionstatement statementfor forguidance guidance Challenge Challenge ititcontinually, continually,and andjudge judgeemployees employeesby byhow howwell wellthey theyadhere adhereto to its itstenets tenets Management Managementmust mustsay sayititand andlive liveit it Source: From Say it and Live It by Patricia Jones and Larry Kahaner Copyright © 1995 by Kane Associates International, Inc Used by permission of Doubleday, a division of Bantam Doubleday Dell Publishing Group, Inc Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Chapter 22 Effective Goals and Objectives Characteristic Characteristic Specific Specificand andmeasurable measurable Explanation Explanation Not Notall allobjectives objectivescan can expressed expressedin innumeric numeric terms, terms,but butthey theyshould shouldbe bequantified quantifiedwhen when possible possible Realistic Realisticand andchallenging challenging Impossibly Impossiblydifficult difficultobjectives objectivesdemotivate demotivate people people Objectives Objectivesshould shouldbe bechallenging challenging but butattainable attainable Focused Focusedon onkey keyresult resultareas areas Goals Goalsshould shouldfocus focuson onkey keyresults sales, results sales, profits, profits,production, production,or orquality quality Cover Coveraaspecific specificperiod period AAmeasurable measurableobjective objectiveisisstated statedin interms termsof of the time in which it is to be completed Shortthe time in which it is to be completed Shortterm termgoals goalsshould shouldcomplement complementlong-term long-term goals goals Reward Rewardperformance performance Objectives Objectivesare aremeaningless meaninglessififthey theyare arenot not directly directlyrelated relatedto torewards rewardsfor forperformance performance Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Plans 22 Plan Plan The end result of the planning effort— Chapter Commits individuals, departments, entire organizations, and the resources of each to specific courses of action for days, months, and years into the future Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 10 22 Determining Resource Requirements People People Technology Technology Money Money Information Information Chapter Supplies Supplies Facilities Facilities Equipment Equipment Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 14 33 Types of Plans Chapter Mission Mission Strategic Strategic Plans Plans Strategic Strategic Goals Goals Tactical Tactical Plans Plans Tactical Tactical Objectives Objectives Operational Operational Plans Plans Operational Operational Objectives Objectives Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 15 33 Strategic Plans and Goals Strategic Strategic Plans Plans Chapter Strategic Strategic Goals Goals Contains the answers to who, what, when, where, how, and how much for achieving strategic goals Long-term, companywide goals set by top-management strategic planning efforts Focus on the changes desired in productivity, product innovation, and responsibilities to stakeholders Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 16 33 An Organization’s Mission and Level of Goals Mission Mission CEO CEOand and Board Boardof ofDirectors Directors Strategic StrategicGoals Goals Top-Level Top-Level Management Management Chapter Tactical TacticalObjectives Objectives Middle-Level Middle-Level Management Management Operational OperationalObjectives Objectives First-Line First-Line Management Management Operational OperationalObjectives Objectives First-Line First-Line Management Management Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 17 33 Tactical Plans and Objectives Tactical Tactical Plan Plan Developed by middle managers, this plan has more details, shorter time frames, and narrower scopes than a strategic plan Usually spans one year or less Chapter Tactical Tactical Objectives Objectives Short-term goals set by middle managers that must be achieved in order to reach top management's strategic goals and the short- and long-term goals of middle managers Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 18 Operational Plans and Objectives 33 Operational Operational Plan Plan The first-line manager’s tool for executing daily, weekly, and monthly activities • Single-Use Plans • Standing Plans Chapter Operational Operational Objectives Objectives The specific results expected from first-level managers, work groups, and individuals Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 19 33 Operational Plans Single-Use Plans Standing Plans  Programs  Policies  Procedures  Rules Chapter  Budgets Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 20 Chapter 44 Unified Hierarchy of Goals Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 21 44 Contingency Plans Chapter Contingency Contingency Plan Plan An alternative goal and course or courses of action to reach that goal if and when circumstances and assumptions change so drastically as to make an original plan unusable Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 22 Basic Planning Process Chapter 55 Step Step 11 Setting Setting Objectives Objectives Step Step 22 Analyzing Analyzing and and Evaluating Evaluating the the Environments Environments Step Step 33 Identifying Identifying the the Alternatives Alternatives Step Step 44 Evaluating Evaluating the the Alternatives Alternatives Step Step 55 Selecting Selecting the the Best Best Solution Solution Step Step 66 Implementing Implementing the the Plan Plan Step Step 77 Controlling Controlling and and Evaluating Evaluating the the Results Results Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 23 55 Analyzing and Evaluating the Environment Internal Environment  Availability of resources  Needs of internal customers Chapter External Environment  Strengths and weaknesses of suppliers and partners   Availability of labor and technology Needs of external customers Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 24 66 Making Plans Effective Basis Basisfor forPlanning Planning  Assumptions Chapter  Forecasts Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 25 66 Making Plans Effective Increasing Increasingthe theProbability Probabilityof ofSuccess Success  Effective communication  Quality of information Chapter  Involvement of others Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 26 66 Planning Tools Management Management by byObjectives Objectives Chapter Linear Linear Programming Programming MBO A technique that emphasizes collaborative setting by managers and their subordinates A planning tool that can be used to determine the optimum combination of resources and activities Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 27 77 Barriers to Planning Inability Inability to to plan plan Lack Lack of of commitment commitment to to the the planning planning process process Inferior Inferior information information Lack Lack of of focus focus on on the the long long term term Overreliance Overreliance on on the the planning planning department department Chapter Overemphasis Overemphasis on on controllable controllable variables variables Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 28 ... continually ,and andjudge judgeemployees employeesby byhow howwell wellthey theyadhere adhereto to its itstenets tenets Management Managementmust mustsay sayititand andlive liveit it Source: From Say it and. .. Middle-Level Management Management Operational OperationalObjectives Objectives First-Line First-Line Management Management Operational OperationalObjectives Objectives First-Line First-Line Management Management... Organization’s Mission and Level of Goals Mission Mission CEO CEOand and Board Boardof ofDirectors Directors Strategic StrategicGoals Goals Top-Level Top-Level Management Management Chapter Tactical