Professional Documents
Culture Documents
Chapter
5
Planning:
The Foundation of Successful Management
CHAPTER CONTENTS
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Chapter 05 - Planning: The Foundation of Successful Management
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Chapter 05 - Planning: The Foundation of Successful Management
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Chapter 05 - Planning: The Foundation of Successful Management
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Chapter 05 - Planning: The Foundation of Successful Management
CLASSROOM OUTLINE
The Manager’s Toolbox: Setting Big Goals: Is This the Road to Success?
When people set challenging goals, they may achieve them less often, but yet they still
perform at a higher level. Stretch goals—ones that take you beyond what your mind
might think is safe—can spur extraordinary efforts. Writing out your goals will help you
in feeling more confident. When you write out your goals, you should have a concrete
plan, break your goals into manageable bites, put something of value on the line linked
to goal obtainment, bundle your temptations or rewards to your efforts, and seek social
support. Even if you do fail, don’t give up entirely since you may have an opportunity to
make a fresh start.
Possible Topics for Discussion:
What would that “crazy” personal goal be for you?
Think of a time that you set a “stretch goal” but did not achieve it fully. What did
you learn from this process?
At the stickK website (see https://www.stickk.com/), people create commitment
contracts obliging them to achieve their personal goals such as losing weight or
quitting smoking. Would a commitment contract at stickK be likely to help you to
stick to your goals? Explain your response.
Which outcome would be more likely to encourage you to stick with your goals,
losing money or having to admit to someone that you failed? Explain your point
of view.
Section 5.1 discusses planning, the first of four functions in the management process.
Planning involves setting goals and deciding how to achieve them, which is linked to
strategy. There are three reasons why planning and strategic management are
important: 1) providing direction and momentum, 2) encouraging new ideas, and 3)
developing a sustainable competitive advantage.
One way that you could begin your coverage of these topics is to profile the company
LittleMissMatched. LittleMissMatched is a clothing company that specializes in colorful,
unmatched items. The company began after a group of friends came up with a plan to
sell children’s socks in sets of three after a conversation about the mystery of
disappearing socks. The plan was to sell mismatched socks to young girls. The
concept proved successful and the firm’s product line has expanded dramatically. The
company was profiled in the Wall Street Journal article “Socks are no Match for this
Teen Clothing Trend,” which you can assign for student reading. You can also have the
students learn more about the company at its website: http://littlemissmatched.com/.
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Chapter 05 - Planning: The Foundation of Successful Management
Article Citation:
Sidel, R. (2015, February 22). Socks are no match for this teen clothing trend. Wall
Street Journal Online.
ProQuest Document ID: 1657238427
http://www.wsj.com/articles/socks-are-no-match-for-this-teen-clothing-trend-
1424489257
Possible Topics for Discussion:
Evaluate how well your company (or a previous one) does at the planning
process.
Provide examples of how the planning process at your company (or a previous
one) encouraged new ideas that contributed to strategic success.
Assume you are a venture capitalist, which is someone who lends money to
start-ups. How would you have reacted if the founder of LittleMissMatched came
to you with a plan to sell socks that did not match in sets of three? What type of
details would you have wanted to see in the firm’s business plan prior to
investing in the firm?
Major Idea Outline:
A. Planning has been previously defined as setting goals and deciding how to
achieve them.
1. Another definition: Planning is coping with uncertainty by formulating
future courses of action to achieve specific results.
2. Planning includes a business plan, which is a document that outlines a
proposed firm’s goals, the strategy for achieving them, and the standards
for measuring them.
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Chapter 05 - Planning: The Foundation of Successful Management
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Chapter 05 - Planning: The Foundation of Successful Management
Product #: F1507A-PDF-ENG
https://hbr.org/2015/07/for-founders-preparation-trumps-passion
B. Strategy is a large-scale action plan that sets the direction for an organization.
1. Strategic management involves managers from all levels – top, middle, and
first-line – in the formulation, implementation, and execution of strategies
and strategic goals to advance the purposes of the organization.
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Chapter 05 - Planning: The Foundation of Successful Management
point consumers may want to try something face-to-face rather than see a
simulation or have something created in their house. The touch and feel of a
product may still matter just as much in 15 years, it just depends how quickly
technology can get us to that point.
Additional Activities:
One way to build on this Example is to have the students watch the video “Meet
Vincent - Harry Rosen's New Virtual Clothing Advisor.” This 2-minute video
developed by ARHT Media profiles the use of a “HumaGram” by a retailer in Canada.
Consider using the following discussion questions:
What would be the benefits and disadvantages of shopping with a hologram such
as Vincent alongside you?
Thinking of your favorite retailer where you prefer to shop, discuss how e-
commerce is likely to impact the firm over the next 3-5 years. How will this firm be
able to create a competitive advantage?
Provide recommendations for how your company (or a previous one) can best
stay aware of trends in e-commerce or other threats that could impact its
competitive advantage.
Video Link:
https://vimeo.com/114602896
Section 5.2 discusses mission and vision statements, as well as the three types of
planning. Strategic planning determines what the organization’s long-term goals should
be for the next 1–5 years with the expected available resources. Tactical planning
determines what contributions departments or similar work units can make with their
given resources during the next 6–24 months. Lastly, operational planning determines
how to accomplish specific tasks with available resources within the next 1–52 weeks.
One way that you could begin your coverage of these topics is to profile the firm
PillPack, a company which is changing how people take their prescription medications.
The company sends customers their prescription drugs sorted together into clear plastic
wrappers printed with the date and time at which they should be taken, rather than
sending each medication in a separate pill bottle. The company was profiled in the
Forbes article “Pharmacy Startup PillPack Could Change the Way America Takes Its
Medicine,” which you could ask the students to read. You could also have the students
learn more about the company at its website: https://www.pillpack.com/. This company
is an excellent firm to profile for a discussion about mission and vision statements.
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Chapter 05 - Planning: The Foundation of Successful Management
Article Citation:
Hedgecock, S. (2015, May 4). Pharmacy startup PillPack could change the way
America takes its medicine. Forbes.
http://www.forbes.com/sites/sarahhedgecock/2015/04/15/this-pharmacy-startup-wants-
to-change-the-way-you-take-your-medicine/
Possible Topics for Discussion:
Locate the mission and vision statements for your company, a previous one, or
one for which you want to work after graduation. Evaluate the extent to which
these statements serve their purpose for the company.
For your company (or a previous one), discuss key issues the firm should
address when it conducts its strategic, tactical and operational planning.
Using the article “Pharmacy Startup PillPack Could Change the Way America
Takes Its Medicine” as your foundation, write a mission statement and a vision
statement for PillPack. Explain why you consider your mission statement and
your vision statement to be appropriate for the firm.
Major Idea Outline:
Fundamentals of Planning.
A. The organization’s mission is translated into a vision, which is implemented
through strategic, tactical, and operational planning.
B. Mission and Vision Statements – The planning process begins with a mission
statement and a vision statement.
1. An organization’s mission is its purpose or reason for being.
a. A mission statement expresses the purpose of the organization.
2. The vision is a long-term goal describing “what” the organization wants to
become; it is a clear sense of the future and the actions needed to get
there.
a. After formulating a mission statement, top managers need to develop
a vision statement, which expresses what the organization should
become, where it wants to go strategically.
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Chapter 05 - Planning: The Foundation of Successful Management
Exercise Objectives
To explore the value of creating an organizational mission statement, vision
statement, and supporting goals.
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Chapter 05 - Planning: The Foundation of Successful Management
Additional Activities:
One way to build on this Example is to profile Patagonia’s Worn Wear program. With
this program, the company offers free repairs on busted zippers, rips, tears, buttons,
and more and teaches people how to fix their own gear. You could have the students
watch the 4-minute video “Better Than New – Patagonia’s Worn Wear Repair Truck &
Facility” Consider using the following discussion questions:
Discuss how Patagonia’s Worn Wear program is consistent with the firm’s
mission.
Given that this type of program likely encourages customers to buy fewer
products, is this a program that would be supported by the stakeholders of other
retailers if they were to implement a similar program? Defend your position.
Do you have an article of Patagonia clothing that you would rather repair than buy
a new one, even if it were more expensive to repair it? If so, explain the
sentimental value of the garment. If not, explain if your shopping decisions as a
consumer would be influenced by Patagonia’s mission statement.
Video Link:
https://www.youtube.com/watch?v=7muOgpX8vaQ
5-13
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Chapter 05 - Planning: The Foundation of Successful Management
travelers, and how it wants to attract customers to tits brand. Amazon’s vision
statement is a bit more broad and talks about an online place to “discover
anything,” which may be considered quite brief in describing the world it competes
in. Patagonia’s vision statement is the broadest of all three. It would be difficult to
define “the human scale” and apply it to what’s happening in the world it competes
in and what it wants to do about it.
Additional Activities:
One way to build on this Example is to profile Patagonia’s decision to provide to the
rest of the surf industry free access to the technology Patagonia developed that
allows for wetsuits to be made from plant-based biorubbers rather than neoprene, a
material with a highly toxic manufacturing process. This decision is profiled in a press
release from the firm that is currently available at:
http://www.patagoniaworks.com/press/2014/7/30/new-patagonia-ad-best-weed-in-
town. Consider using the following discussion questions:
Discuss how Patagonia’s development of plant-based biorubbers to replace
neoprene in wetsuits supports the firm’s vision.
Critique the firm’s decision to provide free access to the intellectual property
surrounding these biorubbers to all firms in the surf industry.
To promote its decision to provide free access to this new technology, Patagonia
ran an advertising campaign with the slogan: “We have the best weed in town
(and we are giving it away for free).” Discuss the advantages and disadvantages
of the firm’s use of this slogan.
future. Moreover, many students will be surprised at how engaged they are in
their current happiness, to the detriment of future plans.
2. Based on the three lowest rated survey items, what can you do in the near
term to enhance your vision and plan?
Though the lowest rated survey items will differ amongst students, it is
important for all students to consider a clear vision and plan of action for
future growth. Students need to consider influencing their future by taking
certain steps in their current day-to-day activities in order to foster future
success. This includes making ethical decisions, exhibiting leadership
qualities and working well in teams, amongst other behaviors.
Additional Activities:
You can also consult the Connect Instructors Manual for the post-assessment activity
and corresponding PowerPoint slides used for this Self-Assessment in Connect. In
this activity, you should ask students to write or type out a vision statement for their
future careers. The statements from the Self-Assessment should be incorporated
into a short-vision statement for students’ future careers. Select students should
share their vision statements with the class as a whole. You can guide discussion
and point out strengths in students’ vision statements.
(Correct answer is A)
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Chapter 05 - Planning: The Foundation of Successful Management
Packages,” which you could show to the students Consider using the following
discussion questions:
Critique Amazon’s decision to invest in the “eighth generation” fulfillment centers.
Given that Amazon’s use of Kiva robots may result in job losses since fewer
workers may be needed, what strategic, tactical and operational planning should
the firm perform to deal with this labor issue.
How should Amazon’s competitors respond to its decision to invest in the “eighth
generation” fulfillment centers?
Video Link:
https://www.youtube.com/watch?v=lFUtDagKOp8
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Chapter 05 - Planning: The Foundation of Successful Management
Section 5.3 discusses the three types of goals: strategic, tactical, and operational. The
goal should be followed by an action plan, which defines the course of action needed to
achieve the stated goal, such as a marketing plan or sales plan. The operating plan,
which is typically designed for a one-year period, defines how you will conduct your
business based on the action plan; it identifies clear targets such as revenues, cash
flow, and market share.
One way that you could begin your coverage of these topics is to have the students
consider how social media has impacted the goals and plans of organizations. Social
media can be used by companies to promote their brands and to target new employees,
but the new technology has created challenges for firms with their desires to always
portray a positive image and to avoid legal liability. One concern about social media is
that ever more frequently employees are using social media to make negative
comments about the organization or to harass co-workers. The HR Magazine article
“Polish your Social Media Policy” provides an excellent summary of issues that
employers should consider when developing their social media policies and it may be a
good article to assign for student reading
Article Citation:
Wright, A. D. (2013). Polish your social media policy. HR Magazine, 58(8), 71-72.
ProQuest Document ID: 1431930543
Possible Topics for Discussion:
Obtain a copy of the most recent annual report for your company or a company
about which you would like to learn. Read through the background information in
the report and identify examples of strategic, tactical or operational goals
discussed in the report.
Discuss examples of single-use programs and projects that have been
developed or implemented in your company (or a previous one) in the past three
years. Discuss the challenges that the firm experienced in implementing these
plans.
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Chapter 05 - Planning: The Foundation of Successful Management
Using the article “Polish your Social Media Policy” as your foundation, develop
examples of policies, procedures and rules for social media that your company
(or a previous one) should use.
Major Idea Outline:
Goals, Action Plans, and Operating Plans
1. Whatever its type—strategic, tactical, or operational—the purpose of
planning is to set a goal and then to formulate an action plan.
2. Goals: A goal, also known as an objective, is a specific commitment to
achieve a measurable result within a stated period of time.
(3) Operational goals are set by and for first-line managers and
are concerned with short-term matters associated with realizing
tactical goals.
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Chapter 05 - Planning: The Foundation of Successful Management
4. Single-use plans are plans developed for activities that are not likely to
be repeated in the future.
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Chapter 05 - Planning: The Foundation of Successful Management
Section 5.4 discusses SMART goals, or goals that are Specific, Measurable, Attainable,
Results-oriented, and have Target dates. A technique that assists in setting goals is
known as management by objectives (MBO), and it is a four-step process for motivating
employees.
One way that you could begin your coverage of these topics is to have the students
read the Harvard Business Review online article “When You Give Your Team a Goal,
Make It a Range.” This article by Steve Martin profiles how using high-low goals (e.g.,
lose 1-3 pounds per week) as opposed to single number goals (e.g., lose 2 pounds per
week) can positively impact performance. The article is currently available at:
https://hbr.org/2014/11/when-you-give-your-team-a-goal-make-it-a-range.
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Chapter 05 - Planning: The Foundation of Successful Management
B. Research has shown that, if goals are made more difficult, people may achieve
them less often than they would easy goals, but they perform at a higher level.
C. People also do better when the objectives are specific rather than general.
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Chapter 05 - Planning: The Foundation of Successful Management
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Chapter 05 - Planning: The Foundation of Successful Management
a. Step 1: The employee and manager meet and jointly set objectives to
be attained by the employee.
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Chapter 05 - Planning: The Foundation of Successful Management
results. High scorers should be placed together and low scorers should be placed
together. Students with high organizational facilitation of goal achievement should
discuss what their organizations are doing to facilitate goal achievement. Are MBO
principles implemented? Students with low organizational facilitation of goal
achievement should discuss what their organizations can do to better facilitate goal
achievement. Would MBO principles assist? Groups should share with the class
and you can lead discussion.
(Correct answer is D)
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Chapter 05 - Planning: The Foundation of Successful Management
YOUR CALL
Are you presently considering adding a class, switching majors, or pursuing another
career? Are you wondering whether to continue a personal relationship that no longer
benefits you? What would be the advantages of just saying no?
Based on Ariely’s work, there are advantages to sometimes just saying no, but
those advantages are not realized because people sometimes just cannot bear to
let go of their options. Letting go of options can be seen as a loss, though
continuing can be a bad strategy. This includes the thoughts of adding a class,
switching majors, pursing another career, or even continuing a personal
relationship that is no longer of benefit.
Sometimes making a decision and “cutting your losses” will really assist you in
reducing actual losses down the road as indecision and keeping options open can
take their toll.
Additional Activities:
One way that you could build on this Practical Action is to show the students the video
“Professor Dan Ariely Talking about FOMO.” In this 5-minute video, Professor Ariely
discusses the “Fear of Missing Out” and how anticipatory regret can impact the
decision-making process. Consider using the following discussion questions:
Provide examples of how your own “fear of missing out” has had negative
implications for your personal or professional life.
Assume that your company uses management by objectives and you ended up
missing your sales goal by 1%. How are you likely to feel? What if you had
missed the sales goal by 10%?
Describe a time where your feelings of anticipatory regret impacted your decision-
making process? How as a manager can you seek to avoid anticipatory regret?
Video Link:
https://www.youtube.com/watch?v=iNN32bHxxxQ
Section 5.5 discusses the planning/control cycle, which includes the following four
steps: (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 two ways—
namely (a) by correcting deviations in the plan being carried out or (b) by improving
future plans.
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Chapter 05 - Planning: The Foundation of Successful Management
One way that you could begin your coverage of these topics is to have the students
read the Forbes article “Daughter Knows Best: Inside the 84 Lumber Saga.” The article
is an excellent way to profile the pitfalls of ineffective planning and control processes.
Article Citation:
Alexander, D. (2015, February 9). Daughter knows best: Inside the 84 Lumber saga.
Forbes.
ProQuest Document ID: 1650234412
http://www.forbes.com/sites/danalexander/2015/01/21/daughter-knows-best-inside-the-
84-lumber-saga/
Possible Topics for Discussion:
Critique the effectiveness of the planning and control processes at your company
(or a previous one).
Using the article “Daughter Knows Best: Inside the 84 Lumber Saga” as your
foundation, describe the weaknesses of the firm’s planning and control
processes.
Using the article “Daughter Knows Best: Inside the 84 Lumber Saga” as your
foundation, evaluate the extent to which you believe the company is on track for
success today and critique the appropriateness of the firm’s current strategic
goals.
Major Idea Outline:
A. The planning/control cycle has two planning steps (1 and 2) and two control
steps (3 and 4), as follows:
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 two ways:
a. by correcting deviations in the plan being carried out
b. by improving future plans
B. The planning/control cycle loop exists for each level of planning.
5-31
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Chapter 05 - Planning: The Foundation of Successful Management
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Chapter 05 - Planning: The Foundation of Successful Management
(Correct answer is C)
5-33
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Chapter 05 - Planning: The Foundation of Successful Management
5.1 What are planning, strategy, and strategic management, and why are they
important to me as a manager?
Planning is defined as setting goals and deciding how to achieve them. When you
make a plan, you make a blueprint for action that describes what you need to do to
realize your goals (i.e., business plan). A strategy is a large-scale action plan that
sets the direction for an organization. Strategic management is a process that
involves managers from all parts of the organization in the formulation and the
implementation of strategies and strategic goals. A manager should adopt
planning and strategic management for three reasons: They can (1) provide
direction and momentum, (2) encourage new ideas, and above all (3) develop a
sustainable competitive advantage.
5.2 What are mission and vision statements, and what are three types of
planning and goals?
A mission statement expresses the purpose of the organization, whereas a vision
statement expresses what the organization should become, or where it wants to
go strategically. There are three types of planning and goals: strategic, tactical,
and operational. Strategic planning determines what the organization’s long-term
goals should be for the next 1–5 years with the expected available resources.
Tactical planning determines what contributions departments or similar work units
can make with their given resources during the next 6–24 months. Lastly,
operational planning determines how to accomplish specific tasks with available
resources within the next 1–52 weeks.
5.3 What are the three types of goals, and what are different kinds of plans?
Three types of goals are strategic, tactical and operational. Strategic goals are set
by and for top management and focus on objectives for the organization as a
whole. Tactical goals are set by and for middle managers and focus on the
actions needed to achieve strategic goals. Operational goals are set by and for
first-line managers and are concerned with short-term matters associated with
realizing tactical goals. There are two kinds of plans: action and operating. An
action plan defines the course of action needed to achieve the stated goal, such as
a marketing plan or sales plan. The operating plan, which is typically designed for
a one-year period, defines how you will conduct your business based on the action
plan; it identifies clear targets such as revenues, cash flow, and market share.
There are also two types of plans: standing and single-use. Standing plans are
plans developed for activities that occur repeatedly over a period of time. Standing
plans consist of policies, procedures, and rules. Single-use plans are plans
developed for activities that are not likely to be repeated in the future. Such plans
can be programs or projects.
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Chapter 05 - Planning: The Foundation of Successful Management
5.4 What are SMART goals and MBO and how can they be implemented?
A SMART goal is one that is Specific, Measurable, Attainable, Results-oriented,
and has Target dates. Management by objectives (MBO) is a four-step process in
which (1) managers and employees jointly set objectives for the employee, (2)
managers develop action plans, (3) managers and employees periodically review
the employee’s performance, and (4) the manager makes a performance appraisal
and rewards the employee according to results. The purpose of MBO is to
motivate rather than to control subordinates. For MBO to be successful, the
following three things have to happen: top management must be committed, it
must be applied organization wide, and objectives must “cascade.”
5.5 How does the planning/control cycle help keep a manager’s plans headed in
the right direction?
Once plans are made, managers must stay in control using the planning/control
cycle, which has two planning steps (1 and 2) and two control steps (3 and 4), as
follows: (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 two ways—namely, (a) by correcting deviations in the plan being carried out or
(b) by improving future plans. This is a continuous feedback loop that helps keep
the manager’s plans headed in the right direction, or let him/her know if they are
not.
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Chapter 05 - Planning: The Foundation of Successful Management
The company’s operational plan was not effectively executed. It did not consider
all the issues at hand with transporting the drilling equipment. Though middle
management had a plan to disassemble the equipment, and upper management
understood how all of this played into the company’s larger strategy, front-line
management did not get the proper approvals (i.e., Nez Perce Tribe) before
going ahead with the plan. There can also be an argument for tactical planning
as getting the proper approvals may be a longer-term plan, but tactical planning
is more related to the decision on how to move the equipment, not the actual
move itself.
2. Which of the three types of goals were ineffectively managed by GE? Explain.
The same justifications as mentioned in the first question can be used here. It
seems that operational, and to a certain extent, tactical goals were not managed
effectively. Getting the proper permits in order to realize the tactical goal, which
is based on a larger strategy, was key here.
3. State two SMART goals for GE based on the case. Given the political issues
discussed in the case, how might GE ensure that these goals are attainable?
Discuss.
GE should use a SMART goal for moving the equipment. It can include the
number of days it would take to move the equipment, when it should be done by,
and how that plays into its larger strategy of focusing on its oil business. Now
the goal may not include the political issue, which is why GE must make sure the
goal is attainable, and the legal hurdle is resolved, before attempting the SMART
goal.
Another SMART goal can be utilized for earning back some of that $75 million in
lost sales due to this issue. That can include a specific goal, related to the oil
sector, which would increase revenues during the time period that the injunction
is in place. Of course, how attainable this may be is up for debate.
4. Using Figure 5.5, describe what GE could have done to improve the process of
transporting the evaporator. Provide specific recommendations.
The first recommendation would be to include all the proper approvals needed
for transporting the equipment in the initial plan. This way, when the plan is
being carried out there is an idea of what needs to be done prior to transport. If
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Chapter 05 - Planning: The Foundation of Successful Management
the initial plan is flawed, there is a greater chance that the rest of process will be
tainted as well. The second recommendation is to learn from this issue and to
incorporate that information for improving future plans. In the current issue, the
deviations do not seem to be correctable based on the injunction in place; so GE
will have to improve future plans so all the correct approvals are received when
such a transport is to occur.
5. What did you learn about planning based on this case? Explain.
Proper planning is key when it comes to large-scale projects. If a plan does not
properly materialize, the carrying out of the plan is likely to fail. In this case, the
strategy and tactical plans may have worked out fine, but the operational
planning was flawed. With that in mind, the plan did not properly execute and
the organization will likely lose millions of dollars worth of revenue. It is
important for the company to learn from this issue during its planning/control
cycle, and to utilize the knowledge gained during future planning stages.
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Chapter 05 - Planning: The Foundation of Successful Management
LEGAL/ETHICAL CHALLENGE
How Do You Think Companies Should Respond to Accusations Made by a
Whistle-Blower?
I thus would punish the person who made the false claim and hire back the three
employees. These employees should also receive pay for the time they were
dismissed. One criticism of the Dodd-Frank law has been that, because of the
financial incentives involved, employees may report “tips” without complete
information or substantiation, figuring “nothing ventured, nothing gained”.
2. Renault obviously did not conduct a thorough investigation prior to firing the
three employees. The company needs to develop detailed guidelines for how
such matters should be investigated. It also needs to hire back the employees
and pay them for the time they were dismissed.
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Chapter 05 - Planning: The Foundation of Successful Management
3. Renault should have hired an outside firm to investigate the claim, or they should
have consulted with an outside law firm to review results from the investigation
and render an opinion to senior executives. They also need to hire back the
employees and pay them for the time they were dismissed.
Having an outside party investigate may be a good idea, but it is not foolproof
either. Enron had hired the accounting firm of Arthur Andersen to audit its books,
and the accounting firm was later convicted of obstruction of justice for shredding
documents related to its audit.
Renault can lobby the government for changes to the law that allows for such
whistleblowing privileges and compensation. Though proper whistleblowing
should always be encouraged, there should be safeguards so anonymous tips,
that cannot be substantiated, are not allowed to ruin the careers of other
employees and/or provide the tippers with compensation for their actions.
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Chapter 05 - Planning: The Foundation of Successful Management
GROUP EXERCISES
Objectives
Introduction
The overall purpose of this exercise is to enhance students’ understanding about the
value of creating mission and vision statements and the need to create organizational
goals in support of these statements. Students use the Internet in this exercise to focus
on Coca Cola’s mission, vision, and corporate goals.
Instructions
2. Give the students the assignment of referring to Coca Cola’s web page:
http://www.coca-colacompany.com/our-company. You may want to give students
the option of searching on any number of firms that may be interesting to you or
them. We recommend Coca Cola for this exercise because its website contains the
information needed to complete this exercise and it’s a well-known company.
3. Ask students to print Coca Cola’s mission statement, vision statement, and
corporate goals. If you use a company besides Coca Cola, tell your students that
many companies include their corporate goals in their annual reports.
2. Do the organizational goals clearly support these statements? Try to get your
students to explain “how” the goals support the mission and vision.
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Chapter 05 - Planning: The Foundation of Successful Management
Objectives
To engage in planning by writing SMART goals and action plans for a new student
organization.
Introduction
The overall purpose of this exercise is to give students an opportunity to experience two
key components of the planning process: creating operational goals and action plans.
This will be accomplished by asking students to create SMART goals and action plans
for a new student organization.
Instructions
1. Lecture on the planning process and the criteria for writing SMART goals. There
is a short exercise for teaching your students how to write SMART goals at the
end of this exercise.
2. Tell the students that the goal of this exercise is for them to experience two major
components of the planning process: creating operational goals and action
plans. Tell students they are to imagine that they are working to bring a new
student organization to their university with a mission to make the campus more
student-friendly.
3. Break the class into groups of 5-6 people. Each group is charged with creating
(1) two SMART goals that the organization will attempt to achieve over the next
12 months in pursuit of its mission (to make the campus more student-friendly)
and (2) an action plan summarizing how the group will accomplish its goals.
Consider giving the students a copy of the sample action planning form shown at
the end of this exercise for use during their planning. Encourage the groups to
make whatever assumptions are needed to complete this task and give them 30
minutes to complete their work. Tell each group to appoint a spokesperson who
will summarize the group’s work at the end of the exercise.
4. Reconvene the class after 30 minutes and ask for a volunteer to summarize the
group’s goals and action plan. Ask the remainder of the class to critique whether
or not the goals are SMART and whether the action plan is logical. Ask for as
many group volunteers to summarize their work as you see fit.
1. What has this exercise taught you about the planning process?
2. Did your team find any of the steps in the planning process difficult? Which one?
3. How can this process be used in your personal life?
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Chapter 05 - Planning: The Foundation of Successful Management
Restated:
Restated:
Restated:
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Chapter 05 - Planning: The Foundation of Successful Management
Action Plan
Goal:________________________________________________________________
1.
This exercise was created by A. Kinicki, “Performance Management Systems”, 2000
Superstition Mountain, AZ, pp. 2-9.
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Chapter 05 - Planning: The Foundation of Successful Management
Objectives
Introduction
Anyone can define goals. But, the five characteristics of a good goal are represented
by the acronym SMART.1 SMART stands for specific, measurable, attainable, results
oriented, and target dates. See the table below for guidelines on writing SMART goals.
Specific Goals should be stated in specific rather than vague terms. The
goal “As many planes as possible should arrive on time” is too
general. The goal that “Ninety percent of all planes should arrive
within 15 minutes of the scheduled arrival time” is specific.
Measurable Whenever possible, goals should be measurable, or quantifiable
(as in “90% of planes should arrive within 15 minutes . . .”). That
is, there should be some way to measure the degree to which a
goal has been reached.
Of course, some goals—such as those concerned with improving
quality—are not precisely quantifiable. In that case, something
on the order of “Improve the quality of customer relations by
instituting 10 follow-up telephone calls every week” will do. You
can certainly quantify how many follow-up phone calls were
made.
Attainable Goals should be challenging, of course, but above all they
should be realistic and attainable. It may be best to set goals that
are quite ambitious so as to challenge people to meet high
standards. Always, however, the goals should be achievable
within the scope of the time, equipment, and financial support
available. If too easy (as in “half the flights should arrive on
time”), goals won’t impel people to make much effort. If
impossible (“all flights must arrive on time, regardless of
weather”), employees won’t even bother trying. Or they will try
and continually fail, which will end up hurting morale. Or they will
cheat. (An example was the unrealistic goal of cutting wait times
for appointments by more than half at Veterans Affairs hospitals,
as revealed in 2014 scandals in which VA administrators were
found to have falsified figures.)
Results Oriented Only a few goals should be chosen—say, five for any work unit.
And they should be results-oriented—they should support the
organization’s vision. In writing out the goals, start with the word
“To” and follow it with action-oriented verbs—“complete,”
“acquire,” “increase” (“to decrease by 10% the time to get
passengers settled in their seats before departure”). Some
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Chapter 05 - Planning: The Foundation of Successful Management
Instructions
2. Students should pick 3 of these 7 categories and write a personal SMART goal
relevant to each category.
3. Break students into groups of 3 or 4 after they complete step 2.
4. Each student should share their first goal with the group. Others in the group then
provide feedback on whether it is a SMART goal or provide feedback to make it a
SMART goal.
5. Each student will share their goals one at a time, until every group member has
shared his or her 3 goals.
6. Students then revise their goals based on feedback.
Questions for Discussion
1
Based on R. Kreitner and A. Kinicki, Organizational Behavior 6e, 2004, McGraw-Hill,
Burr Ridge, IL, p. 305.
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Chapter 05 - Planning: The Foundation of Successful Management
VIDEO CASES
Summary: Innovation can change industries and bring big pay-offs to companies who
fully commit to it and support it. Apple Computer, Nintendo, Google, General Electric,
Toyota, and Tata Motor are foremost among companies recognized for innovative
products and strategies.
Questions:
Answer: Innovative companies are prospectors that follow the motto, “Let’s
create our own opportunities, not wait for them to happen.” Prospectors focus on
developing new products and finding new markets. Continual product and market
innovation requires constant investment of resources and may occasional cause
a company to suffer a loss of efficiency when some new projects or products do
not succeed.
Answer: A vision statement expresses what the organization should become and
where it wants to go strategically. Stating that the company wants to pursue
innovation expresses the long-term goal and the commitment needed to achieve
it, from the CEO on down throughout the organization.
3. With Nintendo’s Wii gaming system as an example, briefly describe the three
types of planning required to launch an innovative new product.
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Chapter 05 - Planning: The Foundation of Successful Management
Summary: Panera is part of a trend toward healthier eating and more balanced living.
Its menu includes homemade artisan breads, soups, salads, bagels, specialty
sandwiches, and a host of hot, frozen, or iced beverages, from coffee and tea to
specialty drinks. While Panera may be growing at a terrific rate, the company is
committed to smart growth. Its CEO and others are wary of growth that happens too
fast, in the wrong geographic regions, or on the wrong pieces of real estate.
Questions:
1. During the 1980s, Shaich and his colleagues began developing a strategy for
changing the way America eats. How did they decide on the bakery café
strategy? Did Panera’s leaders seem to follow the six steps of strategic
planning?
Answer: The owners did some forecasts of how to change the business in the
mid 1990s, after some growth and success with what they started out as. At this
point, the original company had acquired the St. Louis Bread Company, and 19
stores were in operation. The strategy first involved planning and analyzing what
they had to work with and what customers wanted or what the company
forecasted they would be receptive to. After some scenario plans, the company
settled on the café strategy. In 1996 the company added bagels, and unit
volume grew 25 percent. In 1997, it added the sit-down component and sales
increased about 30 percent in one year. Multiple strategic groups were involved
in the growth and operation of Panera and other stores at this time. Ron and the
others decided to focus on just one cohesive strategy. Panera sold its other
businesses, including its namesake, in order to focus all energies on Panera.
The store has seen growth from 199 cafés in 1999 to over 700 today.
Shaich and the others do appear to have followed all the steps to strategic
planning. They established a mission, vision, and goals for the firm. They
included an analysis of external opportunities and threats, and decided to pursue
a healthy eating kind of fast-food restaurant. They analyzed their internal
strengths and weaknesses, and performed a SWOT analysis. They formulated a
strategy for Panera, and have since implemented the strategy. The leaders have
exercised control over the growth and the company has retained its integrity
throughout the last several very successful years.
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Chapter 05 - Planning: The Foundation of Successful Management
2. A mission describes the company in its current state. Strategic vision, on the
other hand, looks to the future of the business and where it wants to be.
Describe what you think is Panera’s strategic vision. What do you think is the
most important component to that vision?
Answer: Student responses will vary some with this question. Panera’s vision
can be described by considering Ron Shaich’s testimony about the company.
The vision really seems to be to sustain the mission—to offer quality foods,
quality breads, great people, and the best atmosphere in which to eat those
foods. Another component of the vision is to bring great bread and
complimentary foods to every community where it can be self-sustaining.
Shaich’s vision for the company appears to be to achieve growth without
“choking on it” – to pace its growth so that it can always stay true to its goals and
values and be successful.
3. Stakeholders are those groups and individuals who affect and are affected by the
achievement of the organization’s mission, goals, and strategy. Identify the
stakeholders in Panera’s success. How can collaborating with key stakeholders
help Panera execute its strategic plan?
Additional videos directly related to the textbook can be found in the Connect
Instructor’s Manual.
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Chapter 05 - Planning: The Foundation of Successful Management
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