Chapter 5 Foundations of Planning

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.1

Learning Outcomes

Define planning Explain the potential benefits of planning Identify the potential drawbacks of planning Distinguish between strategic and tactical plans (continued)

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.2

Learning Outcomes (continued)

State when directional plans are preferred over specific plans Define management by objectives and identify its common elements Outline the steps in the strategic management process
(continued)

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.3

Learning Outcomes (continued)

Describe the four grand strategies

Explain SWOT analysis

Compare how entrepreneurs and bureaucratic managers approach strategy

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.4

Planning
Defining the organizations goals, establishing an overall strategy, and developing a hierarchy of plans to achieve goals
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc. FOM 5.5

Sets Standards to Facilitate Control

Provides Direction

Reasons for Planning

Minimizes Waste and Redundancy
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Reduces the Impact of Change

FOM 5.6

May Create Rigidity

Cant Be Done in a Dynamic Environment Cant Replace Intuition and Creativity Focus on Todays Competition Reinforces Success
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Criticisms of Formal Planning

FOM 5.7

Does Planning Improve Performance?

Financial results Environmental concerns

Quality and implementation

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.8

How Do Strategic and Tactical Plans Differ?

Time Frame

Scope

Objectives

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.9

The Time Frame of Planning

Short-Term Plans
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Long-Term Plans

FOM 5.10

Clear

Specific Plans

Low

Objectives

Flexibility

General

Directional Plans

High
FOM 5.11

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Single-Use vs. Standing Plans

Unique Situations
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Ongoing Operations
FOM 5.12

What Is Management by Objectives?

Organizational Objectives

Divisional Objectives
Departmental Objectives Individual Objectives
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.13

Common Elements of MBO

Goal specificity Participative decision making Set time period Performance feedback

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.14

More Difficult Goals Lead To Higher Performance

Specific Goals Lead to Better Results

Does MBO Work?

Support from Top Management Is Critical
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Participation Is Key

FOM 5.15

Employees Setting Objectives

Identify key job tasks Set specific and challenging goals

Encourage active participation Prioritize goals Build in feedback Link rewards to goal attainment

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.16

Problems with MBO

Efforts directed primarily toward output Encourage individual rather than team efforts Goals may discourage efforts for continuous improvement

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.17

Identify Current Mission, Objectives & Strategy 2

The Strategic Management Process

3 Note Threats and Opportunities 6 Reassess Mission 7&8 Strategies 9 Evaluate Results
FOM 5.18

Analyze Environment

Analyze Resources

Note Weaknesses and Strengths

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Starting the Process

Mission

Strategies

Objectives

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.19

Analyzing the Environment

Environmental Scanning

Competitive Intelligence
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.20

Strengths

Opportunities

SWOT Analysis

Threats

Weaknesses
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.21

Identifying Opportunities

Organizations Resources

Opportunities in the Environment

Organizations Opportunities
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.22

Grand Strategies

Growth Stability Retrenchment Combination

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.23

Determining A Business-Level Strategy

Cost Leadership

Differentiation

Focus
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.24

After Strategies Are Formulated

Implementation Evaluating results

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.25

Benchmarking

Quality As A Strategic Weapon

ISO 9000 and ISO 14000

Six Sigma
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.26

Entrepreneurship

Process by which individuals pursue opportunities, fulfilling need and wants through innovation, without regard to the resources they currently control Important themes

Pursuit of opportunities Innovation Growth

FOM 5.27

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Entrepreneurial Process

Exploring the entrepreneurial context Identifying opportunities and possible competitive advantages Starting the venture Managing the venture

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.28

Comparison: Entrepreneurs and Traditional Managers

Traditional Manager
Primary motivation Corporate rewards

Entrepreneur
Independence

Time orientation
Activity Risk tendency View toward mistakes

Short-term goals
Delegation Low Avoidance

5-10 year growth of business

Direct involvement Moderate Acceptance
FOM 5.29

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Project Management

Contemporary planning tool Is a process of quality control to ensure a projects activities are done on time, within budget, and according to specification Project is a one-time-only set of activities that has a definite beginning and ending point in time
FOM 5.30

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Project Management Process (Exhibit 5-8)

Define objectives

Identify activities and resources Determine project completion date

Establish sequences Estimate time for activities

Compare with objectives Determine additional resource requirements

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 5.31