Business Leadership Unit 2

What is planning

Process of setting objectives and determining how to accomplish them

Why is planning important

Acts as a platform for all other management functions:

Organizing: Need a plan before you can allocate and arrange resources

Leading: Need to know what to guide people toward high task accomplishments

Controlling: Monitering task accomplishments and taking the right corrective action

The planning process

1. Define your objective

2. Determine where you stand in relation to objective

3. Develop premis regarding future condition

4. Analyze alternatives and make a plan

5. Implement the plan and evaluate results

Benefits of planning (Improved focus and flexibility)

• Set goals

• Set priorities

• Determine the needs of customers

• Unified direction

Benefits of planning (Improves companies ability to adapt)

• Deals with changing situations

• Helps cope with changing economy

Benefits of planning (Increased coordination)

• Sets a series of objectives

• Improved coordination between departments

Benefits of planning (Improved control)

• Identify and measure results

• Easy to evaluate results

Benefits of planning (Improves time managment)

• Sets priorities for employees time

Benefits of planning (Motivates staff)

• People will work harder to achieve a goal especially if a reward is in place

Types of plans

1. Strategic: Addresses long term needs and sets direction for an organization

2. Operational: Define what needs to be done in specific areas to implement strategic plan and achieve strategic objective

Policies and procedures

1. Policy: a broad guideline for making disicions and taking action in specific circumstances

2. Procedures: Plans that discribe exactly what actions are to be taken in specific circumstances

Budget and schedule

1. Plans that identify the activities required to accomplish a specific major project

Planning tools

1. Forecasting: Assumptions about the future

2. Benchmarking: Use of external comparisons to better evaluate ones current position

3. Contingency Plan: Back up plan incase something goes wrong

4. Scenario Planning: A long term version of a contingency plan

Contingency plan vs Scenario plan

Contingency plan: More immediate and focused on short term response

Scenario plan: Broader and focused on long term

SWOT Analysis

1. Strength (Internal)

2. Weakness (Internal)

3. Opportunity (External)

4. Threats (External)

SWOT should be used during the proposal stage of strategic planning.

PEST Analysis

1. Political Factors (External)

2. Economic Factors (External)

3. Social Factors (External)

4. Technological Factors (External)

Strategic Plan

A coordinated and systematic direction for an organization (Determines where an organization is going and how its doing)

Types of strategic plans

1. Growth strategy:

   • Concentration - Expanding in the same industry

   • Vertical Integration - Expanding by buying suppliers

   • Diversification - Buying or starting a business in other industries

2. Retrenchment Strategy: Used when an organization is in crisis (reconstructing and downsizing)

Steps in the control process

1. Step 1: Establish objectives and standards

2. Step 2: Measure actual performance

3. Step 3: Compare results with objectives and standards

4. Step 4: Take corrective action as needed

Types of control

1. Work Inputs: Feedforward controls: Ensure right direction is set (deal with problems before they arise)

2. Work Throughputs: Concurrent controls: Ensure the right things are being done (deal with problems as they arise)

3. Work Outputs: Feedback Controls: Ensure the final results are up to the desired standards (deal with problems after they occur)

Control Tools and Techniques

Internal Control: Managers can rely on people to control their own behaviour

External Control: Managers can take direct action to control the behaviour of others

Discipline: Influencing behaviour through reprimand

Progressive discipline: Reprimand depends on the severity and frequency

Hot Stove Rule

Reprimand should occur in the same way a hot stove operates. Don’t touch, but if you do, you will get burned.