WGU C483 - Principles of Management Ch 4

Planning is:

the conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future.

Formal Planning Steps:

Situational analysis

Alternative goals and plans

Goal and plan evaluation

Goal and plan selection

Implementation

Monitor and Control

Planning begins with

situational analysis

A thorough situational analysis...

studies past events

examines current conditions

attempts to forecast future trends

it will provide information about the planning decisions you need to make

The outcome of situational analysis is the identification and diagnosis of....

planning assumptions, issues, and problems

The alternative goals and plans step...

uses the SA step to generate alternative goals that may be pursued in the future and the alt plans that may be used to achieve those goals.

The alternative goals and plans step should stress...

creativity and encourage managers and employees to think in broad terms about their jobs

SMART Goals stands for:

Specific

Measurable

Attainable (but challenging)

Relevant

Time-bound

Specific goals:

are precise, describing particular behaviors and outcomes, employees can easily determine whether they are working towards the goals

Measurable goals....

as much as possible, each goal should quantify the desired results so there is no doubt whether it has been achieved.

Attainable (but challenging) goals...

Employees need to recognize that they can attain the goals they are responsible for, or else they are likely to become discouraged.

However, they also should feel challenged to work hard and be creative.

Relevant goals...

Each goal should contribute to the organization's overall mission while being consistent with its values, including ethical standards

Goals are most likely to be relevant to the organization's overall objectives if they are consistent within and among work groups.

Time-bound goals...

Effective goals specify a target date for completion. Besides knowing what to do, employees should know when they need to deliver results.

Plans are the...

actions or means the manager intends to use to achieve goals.

At a minimum, planning should...

outline alternative actions that may lead to the attainment of each goal

the resources required to reach the goal through those means

and the obstacles that may develop.

Goal and Plan Evaluation...

managers will evaluate the advantages

disadvantages

and potential effects of each alternative goal and plan.

They must prioritize those goals and even eliminate some of them.

Also, managers will consider carefully the implications of alternative plans for meeting high-priority goals.

In particular, they will pay a great deal of attention to the cost of any initiative and the investment return that is likely to result.

Goal and Plan Selection...

Once managers have assessed the various goals and plans, they will select the one that is most appropriate and feasible.

The evaluation process will identify the priorities and trade-offs among the goals and plans

Typically, a formal planning process leads to...

a written set of goals and plans that are appropriate and feasible for a particular set of circumstances

Implementation....

Once managers have selected the goals and plans, they must implement the plans designed to achieve the goals

Managers and employees must understand the plan, have the resources to implement it, and be motivated to do so.

successful implementation requires a plan to...

be linked to other systems in the organization, particularly the budget and reward systems

Monitor and Control...

Although it is sometimes ignored, the sixth step in the formal planning process—monitoring and controlling—is essential. Without it, you will never know whether your plan is succeeding

Strategic planning is different from operational planning in that...

it involves making long-term decisions about the entire organization

Tactical planning translates broad goals and strategies into...

specific actions to be taken within parts of the organization.

Operational planning identifies the...

specific short-term procedures and processes required at lower levels of the organization.

Strategic planning involves...

involves making decisions about the organization's long-term goals and strategies

Senior executives are largely responsible for this

An effective strategy provides a basis for answering five broad questions about how the organization will meet its objectives:

1 Where will we be active?

2 How will we get there?

3 How will we win in the marketplace?

4 How fast will we move and in what sequence will we make changes?

5 How will we obtain financial returns?

the strategic management process has six major components:

1. Establishment of mission, vision, and goals.

2. Analysis of external opportunities and threats.

3. Analysis of internal strengths and weaknesses.

4. SWOT (strengths, weaknesses, opportunities, and threats) analysis and strategy formulation.

5. Strategy implementation.

6. Strategic control.

The mission is a:

clear and concise expression of the basic purpose of the organization.

It describes what the organization does, for whom it does it, its basic good or service, and its values.

The strategic vision...

points to the future—it provides a perspective on where the organization is headed and what it can become.

Ideally, the vision statement clarifies the long-term direction of the company and its strategic intent.

Strategic goals evolve from the...

mission and vision of the organization

The planning process is similar to the _____ process in that both have a series of steps that are typically repeated in a cycle.

decision-making

In a SWOT analysis, the absence of reliable suppliers would be considered as a(n):

weakness.

SWOT analysis helps managers summarize the relevant, important facts from their external and internal analyses. Weaknesses might be lack of spare production capacity and the absence of reliable suppliers.

A _____ system is a component of the strategic management process designed to support managers in evaluating the organization's progress with its strategy and, when discrepancies exist, taking corrective action.

strategic control

The final component of the strategic management process is strategic control. A strategic control system is designed to support managers in evaluating the organization's progress with its strategy and, when discrepancies exist, taking corrective action.

A vertical integration strategy is a strategy:

that involves expanding the domain of the organization into supply channels or to distributors.

Vertical integration generally is used to eliminate uncertainties and reduce costs associated with suppliers or distributors.

A(n) _____ illustrates the four key drivers of a firm's long-term success, and shows how goals in each area are linked to others.

strategy map

_____ provides individuals and work units with a clear map to follow in future activities.

Planning

Benchmarking is the process of assessing how well one company's basic functions and skills compare with:

those of another company.

Business Strategy definition:

The major actions by which a business competes in a particular industry or market

Concentration definition:

A strategy employed for an organization that operates a single business and competes in a single industry

Concentric Diversification definition:

A strategy used to add new businesses that produce related products or are involved in related markets and activities

Conglomerate Diversification definition:

A strategy used to add new businesses that produce unrelated products or are involved in unrelated markets and activities

Core Capability definition:

A unique skill and/or knowledge an organization possesses that gives it an edge over competitors

Corporate Strategy definition:

The set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities

Differentiation Strategy definition:

A strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions

Functional Strategies definition:

Strategies implemented by each functional area of the organization to support the organization's business strategy

low-cost strategy definition:

A strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills product

Mission definition:

An organization's basic purpose and scope of operations

operational planning definition:

The process of identifying the specific procedures and processes required at lower levels of the organization

strategic goals definition:

Major targets or end results relating to the organization's long-term survival, value, and growth

SWOT analysis definition:

A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy

tactical planning definition:

A set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing

Vertical integration definition:

The acquisition or development of new businesses that produce parts or components of the organization's product

Describe how strategic planning should be integrated with tactical and operational planning:

Strategic planning is different from operational planning in that it involves making long-term decisions about the entire organization.

Tactical planning translates broad goals and strategies into specific actions to be taken within parts of the organization.

Operational planning identifies the specific short-term procedures and processes required at lower levels of the organization.

Summarize the basic steps in any planning process:

The planning process begins with a situation analysis of the external and internal forces affecting the organization. This examination helps identify and diagnose issues and problems and may bring to the surface alternative goals and plans for the firm.

Next, the advantages and disadvantages of these goals and plans should be evaluated against one another.

Once a set of goals and a plan have been selected, implementation involves communicating the plan to employees, allocating resources, and making certain that other systems such as rewards and budgets support the plan.

Finally, planning requires instituting control systems to monitor progress toward the goals.

Define core capabilities and explain how they provide the foundation for business strategy:

A core competence is something a company does especially well relative to its competitors.

When this competence, say, in engineering or marketing, is in some area important to market success, it becomes the foundation for developing a competitive advantage.

It can provide a sustainable advantage if it is valuable, rare, difficult to imitate, and well organized

Summarize the types of choices available for corporate strategy:

Corporate strategy identifies the breadth of a firm's competitive domain.

Corporate strategy can be kept narrow, as in a concentration strategy, or can move to suppliers and buyers via vertical integration.

Corporate strategy also can broaden a firm's domain via concentric (related) diversification or conglomerate (unrelated) diversification

Discuss how companies can achieve competitive advantage through business strategy:

Companies gain competitive advantage in two primary ways.

They can attempt to be unique in some way by pursuing a differentiation strategy, or they can focus on efficiency and price by pursuing a low-cost strategy.