MGMT 3013 Exam 2

Planning

Coping with uncertainty and making future actions to achieve results; setting goals and deciding how to achieve them.

Business Plan

Starting a plan; document that outlines a proposed firms' goal, the strategy for achieving them and standards for measurement.

Business Model

Outlines the need the firm will fill, operates the business, it's components and functions, and expected revenues and expenses.

Strategy

Over all guiding; Large- scale plan that sets the direction for an organization; educated guess about what must be done long term

Strategic Management

Incorporating managers from all levels of the organization in the formulation and cooperation of the organizations strategy; Engaging with first line managers and top managers helps the organization because they can see what is realistic or feasible

Why planning and strategic management are important-

Provide direction and momentum, encourage new ideas, develop a sustainable competitive advantage.

Mission statement

"what is our reason for being" "description of product/ service and why it's offered" Purpose of organization.

Vision statement

"What do we want to become?" What the organization should become, where it wants to go strategically.

Strategic Planning

Top managers for next 5-10 yrs.- Goals- Action Plans- Top managers determine what the organization's long-term goals should be for the next 5-10 yrs, with the resources they expect to have available.

Tactical planning

"Done by middle managers for the next 6-24 mo.- Goals- Action Plans- How to get cusomers to make better purchasing decisions

Operational planning

"Done by first line managers for 1-52 wks." How to accomplish specific tasks with available resources.

Top management

Chief executive officer, president, vice president, general managers, division heads. 1-5 yrs; Long term, future oriented, pay attention to environment outside the organization.

Middle management

Functional managers, product-line managers, department managers. 6-24 mo. Implement policies of top management and coordinate activities of first- line managers below, make decision without base of clearly defined information procedures.

First- line management

Unit managers, team leaders, first- line supervisors. 1-52 wks. Direct daily tasks, decisions often predictable, follow well- defined set of routine procedures.

Operational goals

Set by and for first- line managers and are concerned with short- term matters associated with realizing tactical goals.

Action plan

Defines the course of action needed to achieve the stated goal.

SWOT Analysis

Acronym that stands for strengths, weaknesses, opportunities, and threats; Happens when company is trying to formulate strategy; Figures out: "Where are we now?" & "Where can we go?"; Strengths and weaknesses are internal Opportunity and threat are external

Operational plan

1 yr period, how you conduct your business based on action plan, clear targets such as revenue, cash flow, and market share.

Standing plans

Plans for activities that occur repeatedly over time, policies, procedures and rules.

Policy

Response to designated problem or situation

Procedure

Response to a particular problem or circumstance.

Rule

Designates specific required action

Single- use plans

Developed for activities that are not likely to be repeated in the future.

Program

Single use plan encompassing a Range of projects

Project

Single use plan of less scope and complexity than a program.

Specific goals

"Should be" "No more than 1 out of 25 planes should be later than 15mins"

Measureable

"Can have someone monitoring the gates."

Attainable

"Attainable but difficult and must be able to be successful."

Results- Oriented

"Make an impact"

Target dates

"Day you have to reach the goal by."

Management by Objectives

1) Managers/ employees jointly set objectives for the employee 2) Managers develop action plan 3) managers/ employees review employee's performance 4) Manager makes performance appraisal and rewards the employee

Cascading objectives

Objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization.

Planning/ Control cycle

1) Make the plan 2) Carry out the plan 3) Control the direction by comparing results with the plan 4) Control the direction by taking corrective action in correcting deviations, improving future plans.

Strategic positioning

Performing different activities from rivals or performing the same activities differently; Allows it to carve out its own position in the market; 3 principles- When a strategic position is executed, creates a unique and valuable position in the market, Requires trade-offs (having to pursue one activity or the other), Achieving strategic position requires finding a good fit between organizational activities

Strategic Positioning and Principles

Unique and Valuable position; requires trade off; requires creating a "fit" among activities.

Current reality assessment

Looking at where the organization is and where it can change/ grow. Organizational assessment

Grand strategy

How the organization's missions is to be accomplished.

Strategy formulation

Choosing among different strategies and alternating them to fit the organization's needs

Strategy implementation

Putting strategic plans into effect

Strategic control

Monitoring the execution of strategy and making adjustments if needed.

Competitive Intelligence

Means gaining information about competitors activities so you can anticipate their moves. Public prints, advertising, investor information, informal sources.

Environmental Scanning

Monitoring an organization's internal and external environments to detect early signs of opportunities and threats.

S-

Strengths; Inside maters; Work processes, organization, culture, staff, products quality, production capacity, image, financial resources and requirements, service levels and other internal matters.

W-

Weaknesses; Inside matters; Could be same as strengths: work process, organization, culture, ect..

O-

Opportunity; Outside matters; Markets segment analysis, industry and competition analysis, impact of technology on organization, product analysis, governmental impacts.

T-

Threats; Outside matters; Could be same as opportunities.

Organizational strengths

Skills that give organization special competencies and advantages in strategies in pursuit of its mission.

Organizational Weakness

Drawbacks that hinder an organization in executing strategies in pursuit of its mission

Organizational Opporutnities

Environmental factors that the organization may exploit for competitive advantage

Organizational Threats

Environmental factors that hinder an organization's achieving a competitve

Trend analysis

Hypothetical extension of a past series of events into the future.

Contingency planning

Alternative hypothetical but equally likely future conditions; Scenario Planning and Scenario Analysis

Benchmarking

Process by which a company compares its performance with that of high- performing organizations.

Porter's Five Competitive Forces

1) Threat of new entrances 2) Bargaining power of suppliers 3) Bargaining power of buyers 4) Threat of substitute products or services 5) rivalry among competitors

Growth Strategy

Expansion- sales revenues, market share, number of employees, or number of cousomers

Stability

Little or no significant change

Defensive

Reduction in the organization's efforts, retrenchment

Cost Leadership

Wide; Keep the costs or prices, of a product or service below the competitors and target a wide market. EX- Walmart

Differentiation

Wide; Offer products that are unique and superior value compared to competitors. EX- Coca Cola

Cost- Focus

Narrow; Keep cost of product below competitors. EX- Dollar Tree

Focused- Differentiation

Narrow; Offer products that are unique and superior value compared to competitors. EX- Rolex

Single- Product strategy

Company makes and sells only one product within it's market; benefit- focused; risk- vulnerability

(Diversification Strategy) Diversification

Operating several businesses in order to spread the risk; related, unrelated

Advantages of Related Diversification; Reduced risk

More than on product

Advantages of Related Diversification; Management efficiencies

Administration spread over several businesses

Advantages of Related Diversification; Synergy

Economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately

BCG matrix

Evaluating strategic business units on the basis of 1) Their business growth rates 2) Share of the market

Three Core processes of Business

People, Strategy and Operations

Two kinds of decision making

Decision and Decision Making

Decision

Choice made from among available alternatives

Decision Making

Process of identifying and choosing alternative courses of action.

4 Ways to make decisions

Analytical, Conceptual , Directive, Behavioral

Rational Decision Making Stage 1

Identify the problem or opporunity

RDM Stage 2

Think up alternative solutions.

RDM Stage 3

Evaluate alternatives and select a solution.

RDM Stage 4

Implement and evaluate the solution chosen; best interest in organization; short term personal goals; contract

Rational Model of Decision Making

Leave emotion out, pre- descriptive; determine how a decision Should be made

Non-rational models of decision making

Descriptive; How people actually make decisions; assumes decision making is always uncertain and risky

Bounded Rationality

Constrained from making the optimum decision; Limited by numerous constraints to make a decision; complexity, time and money, cognitive capacity

Intuition

Timely; but no research, difficult to gain buy in. Making a choice without the use of conscious thought or logical inference. Expertise and feelings.

Ethics Officer

Trained about ethics in workplace, resolving ethical dilemmas.

Decision tree

Graph of decision and their possible consequences; used to create a plan to reach a goal.

Analytics

Sophisticated forms of business data analysis, portfolio analysis, time- series forecast- Business Analytics.

Big Data

Web- browsing data trails, social network communications, sensor data, and surveillance data.

Big Data analytics

Examining large amounts of data of a variety of types to uncover hidden pasterns, unknown corrections, and other useful information.

Decision- making style

Combination of how an individual perceives and responds to information, value orientation, tolerance for ambiguity.

Directive

Efficient, logical, practical and systematic in their approach to solving problems; action oriented, decisive and like to focus on facts.

Analytical

Considers more information and alternatives

Conceptual

Broad perspective to problem solving; likes to consider many options and future possibilities.

Behavioral

Supportive, receptive to suggestions, show warmth; prefer verbal to written information.

Ineffective Responses to a Decision Situation

Relaxed avoidance, relaxed change, defensive avoidance, panic

Importance

"How high priority is this situation?"

Credibility

"How believable is the information about the situation?"

Urgency

"How quickly must I act on the information about the situation?"

Availability

Recent

Representativeness

Small sample size to make decision; saying never going to hire from osu again

Sunk cost

Money you can't get back

Anchoring and adjustment

If all employees got 6% bonus in previous year, then 7% raise next year; looking back on what they did previously.

Escalation of commitment

Might threaten ego

Groupthink

Occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation.