Foundations of Planning

planning

often called the primary management function because it establishes the basis for all the other things managers do as they organize, lead, and control

planning

It’s concerned with ends (what is to be done) as well as with means (how it’s to be done)

• formal planning

• informal planning

Types of Planning

formal planning

is a structured, documented approach to achieving objectives. may target date, may in-charge kung sino ang gagawa - ginagawa sa mga strategic process na requires ng long term planning - ginagamit sa pro - active organization (iniisip ano possible na problems para magawan agad ng solution)

informal planning

it is more flexible and spontaneous, often involving quick decisions and adapting to immediate needs (ginagamit sa fire fighter - reactive organization)

Because of changes in the environment, managers engage in planning to:

• set the standards to facilitate control

• provide direction

• reduce the impact of change

• minimize waste and redundancy

What are the reasons for planning

strategic management

it is what managers do to develop an organization’s strategies

• customers

• markets

• concern for survival, growth and profitability

• philosophy

• concern for public image

• products or services

• technology

• self-concept

• concern for employees

What a mission statement includes (Components 9)

• corporate strategy

• competitive strategy

• functional strategy

What strategies do managers use?

corporate strategy

•Focus: Overall scope and direction of the organization

•Goal: Decide which industries or markets to compete in

•Example: Diversification, mergers & acquisitions, international expansion

(strategy para maging best company sa industry)

competitive strategy

•Focus: How to compete in a specific industry or market

•Goal: Achieve competitive advantage

•Example: Cost leadership, differentiation, focus/niche strategy

functional strategy

•Focus: Specific departments and operations

•Goal: Support higher-level strategies (corporate & competitive)

•Example: Marketing strategy, R&D strategy, HR strategy

(they are choosing strategy based on their function)

corporate strategy

A ______ is an organizational strategy that specifies what businesses a company is in or wants to be in and what it wants to do with those businesses.

• growth

• stability

• renewal

three main types of corporate strategies

growth strategy

A _______ is when an organization expands the number of markets served or products offered, either through its current business(es) or through new business(es).

• concentration

• vertical integration

• horizontal integration

• diversification

4 Growth strategy

concentration

it means we are focusing on our current product or services (improve and innovate lang sa current product)

vertical integration

may two types and forward and backward integration

forward integration

it pertains sa process of delivering products to customer, tayo mismo magdedeliver at gagawa, hindi maghihire ng external. Kinocontrol mo yung pag deliver ng products like pepse sila mismo nagdedeliver ng products nila (mainly concern for customers)

backward integration

pertaining sa ating supply, tayo yung mismo maggagawa ng ating supplier. ikaw ay nagtitinda ng chicken - ikaw na mismo gagawa ng sarili mong manukan (supply) taking control of supply.

horizontal integration

taking control of competitiors - we take partnership or collaboration

diversification

may two types sya at ito ay related and unrelated diversification. Ito ay nagdadagdag ng mga products or services

related diversification

magdadagdag ng related product and services na related sa current product. (Barber shop + tindahan ng shampoo)

unrelated diversification

magdadagdag ng products or services na hindi related sa current product (car wash + coffee shop)

stability strategy

an organization continues to do what is currently doing

stability strategy

Examples of this strategy include continuing to serve the same clients by offering the same product or service, maintaining market share, and sustaining the organization’s current business operations. The organization doesn’t grow, but doesn’t fall behind, either

renewal strategy

strategies that address declining performance

• retrenchment strategy

• turnaround strategy

two main types of renewal strategy

retrenchment strategy

we are reducing our cost (bawas ng tao, choosing low raw materials, others benefits that are not mandated by the government, walang bonus, allowance kasi initative ng company

turnaround strategy

we are going back on the basics, tinitignan yung mali, kulang at kelangan iimprove. At babaguhin kung saan nagkamali, ang bumalik at itama ang pagkakamali

competitive strategy

is a strategy for how an organization will compete on its business

strategic business units

When an organization is in several different businesses, those single businesses that are independent and formulate their own competitive strategies are often called ________

competitive strategy

Developing an effective _______ requires an understanding of competitive advantage, which is what sets an organization apart; that is, its distinctive edge. pag maganda gamit na technology mas maganda quality. kapag mas mura product mo pero same sa quality ng mahal.

• cost leadership strategy

• differentiation strategy

• focus strategy

Different Competitive Strategy

cost leadership strategy

lowest cost between yout competitor and best value - same prices but yung value ng product mo ay mas maganda sa competitor mo

differentiation strategy

para magain mo yung market kelangan ikaw yung kakaiba

focus strategy

you are looking at a certain part na gusto mong matarget as competitive advantage

planning

it involves two important aspects goals and plans

goals

are desired outcomes or targets. they guide manager’s decisions and form the criteria against which work results are measures

plans

are documents that outling how goals ar egoing to be met

• stated goals

• real goals

Types of Goals

stated goals

official statements of what an organization says, and what it wants its stakeholders to believe, its goals are.

real goals

those goals an organization actually pursues—observe what organizational members are doing.

breadth

strategic versus tactical

time frame

long term vs. short

specificity

directional vs. specific

frequency of use

single-use vs. standing

Strategic plans

are those that apply to an entire organization and encompass the organization’s overall goals.

Tactical plans

(sometimes referred to as operational plans) specify the details of how the overall goals are to be achieved

long-term plans

are now defined as plans with time frame beyond three years

short-term plans

cover one year or less

specific plans

are plans that are clearly defined and leave no room for interpretation

directional plans

when uncertaintly is high and managers must be flexible in order to respond to unexpected changes

single-use plan

is a one-time plan specifically designed to meet the needs of a unique situation

standing plans

are ongoing plans that provide guidance for activities performed repeatedly

environmental scanning

it involves screening large amounts of information to detect emerging trends

competitive intelligence

One of the fastest-growing forms of environmental scanning is _____ - accurate information about competitors that allows managers to anticipate competitors’ actions rather than merely react to them.