ORGMAN: ORGANIZATION AND MANAGEMENT

WEEK 4: PLANNING

I.LEARNING OBJECTIVES:
After this module, you should be able to:
1. Define the nature and purpose of planning
2. Classify the types of goals organizations might have and the plans they
use
3. Compare and contrast approaches to goal-setting and planning
4. Discuss contemporary issues in planning
5. Define strategic management and explain why it’s important
6. Explain what managers do during the six steps of the strategic
management process
7. Describe the three types of corporate strategies
8. Describe competitive advantage and the competitive strategies
organizations use to get it
9. Discuss current strategic management issues

II. TOPIC OUTLINE:

• Planning Work Activities
• The What and Why of Planning
• Goals and Plans
• Setting Goals and Plans
• Contemporary Issues in Planning
• Managing Strategy
• The Strategic Management Process
• Corporate Strategies
• Competitive Strategies
• Current Strategic Management Issues

III. LESSON PROPER

PLANNING WORK ACTIVITIES

What Is Planning?
• Planning - a primary managerial activity that involves:
• Defining the organization’s goals
• Establishing an overall strategy for achieving those goals
• Developing plans for organizational work activities

• Formal Planning - Specific goals covering a specific time period; Written and shared
with organizational members

Why Do Managers Plan?

• Purposes of Planning
• Provides direction
• Reduces uncertainty
• Minimizes waste and redundancy
• Sets the standards for controlling

Planning and Performance

• Formal planning is associated with:
• Higher profits and returns on assets

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 • Positive financial results
• The quality of planning and implementation affects performance more than
the extent of planning
• The external environment can reduce the impact of planning on
performance

Goals and Plans

• Goals (also Objectives)
• Desired outcomes for individuals, groups, or entire organizations
• Provide direction and evaluation performance criteria
• Plans
• Documents that outline how goals are to be accomplished
• Describe how resources are to be allocated and establish activity schedules

Types of Goals
• Financial Goals - related to the expected internal financial performance of the
organization.
• Strategic Goals - related to the performance of the firm relative to factors in its
external environment (e.g., competitors).

Types of Plans
• Strategic Plans
• Establish the organization’s overall goals
• Seek to position the organization in terms of its environment
• Cover extended periods of time
• Operational Plans
• Specify the details of how the overall goals are to be achieved
• Cover a short time period
• Long-Term Plans
o Time frames extending beyond three years.
• Short-Term Plans
o Time frames of one year or less.
• Specific Plans
o Plans that are clearly defined and leave no room for interpretation.
• Directional Plans
o Flexible plans that set out general guidelines and provide focus, yet allow
discretion in implementation.
• Single-Use Plan
o A one-time plan specifically designed to meet the need of a unique situation.
• Standing Plans
o Ongoing plans that provide guidance for activities performed repeatedly.

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Setting Goals and Plans
• Broad goals are set at the top of the organization.
• Goals are then broken into sub-goals for each organizational level.
• Goals are intended to direct, guide, and constrain from above.
• Goals lose clarity and focus as lower-level managers attempt to interpret and
define the goals for their areas of responsibility.

Maintaining the Hierarchy of Goals

• Means-Ends Chain
o The integrated network of goals that results from establishing a clearly-
defined hierarchy of organizational goals.
o Achievement of lower-level goals is the means by which to reach higher-
level goals (ends).

Management By Objectives (MBO)

• Specific performance goals are jointly determined by employees and managers.
• Progress toward accomplishing goals is periodically reviewed.
• Rewards are allocated on the basis of progress towards the goals.
• Key elements of MBO:
• goal specificity
• participative decision making
• an explicit performance/evaluation period
• feedback
• Reason for MBO Success
o Top management commitment and involvement
• Potential Problems with MBO Programs
o Are less effective in dynamic environments that require constant resetting
of goals
o Overemphasis on individual accomplishment may create problems with
teamwork
o Allowing the MBO program to become an annual paperwork shuffle

Well Written Goals

Written in terms of outcomes rather than actions
Measurable and Quantifiable
Clear as to time frame
Challenging yet attainable
Written down

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 Communicated to all necessary organizational members

Steps in Goal Setting

1. Review the organization’s mission statement. Do goals reflect the mission?
2. Evaluate available resources. Are resources sufficient to accomplish the mission?
3. Determine goals individually or with others. Are goals specific, measurable, and
timely?
4. Write down the goals and communicate them. Is everybody on the same page?
5. Review results and whether goals are being met. What changes are needed in
mission, resources, or goals?

Contingency Factors in Planning

• Manager’s level in the organization

o Strategic plans at higher levels

o Operational plans at lower levels
• Degree of environmental uncertainty
o Stable environment: specific plans
o Dynamic environment: specific but flexible plans
• Length of future commitments
• Commitment Concept: Current plans affecting future commitments must
be sufficiently long-term in order to meet those commitments.

Approaches to Planning
• Establishing a formal planning department
o Create a group of planning specialists that help managers write
organizational plans.
o Planning is a function of management; it should never become the sole
responsibility of planners
• Involving organizational members in the process
o Plans are developed by members of organizational units at various levels
and then coordinated with other units across the organization.

Criticisms of Planning
• Planning may create rigidity.
• Plans cannot be developed for dynamic environments.
• Formal plans cannot replace intuition and creativity.
• Planning focuses managers’ attention on today’s competition—not tomorrow’s
survival.
• Formal planning reinforces today’s success, which may lead to tomorrow’s failure.
• Planning isn’t enough.

Contemporary Issues in Planning

• How can managers plan effectively in dynamic environments?
• Develop plans that are specific but flexible.

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 • Understand that planning is an ongoing process.
• Change plans when conditions warrant alterations.
• Persistence in planning eventually pays off.
• Flatten the organizational hierarchy to foster the development of planning skills at
all organizational levels.
• How can managers use environmental scanning?
• Environmental Scanning - screening information to detect emerging trends
• Competitor Intelligence - gathering information about competitors that
allows managers to anticipate competitors’ actions rather than merely react
to them

MANAGING STRATEGY

What Is Strategic Management?

• Strategic management - what managers do to develop the organization’s strategies.
• Strategies - the plans for how the organization will do what it’s in business to do,
how it will compete successfully, and how it will attract and satisfy its customers in
order to achieve its goals.
• Business model - how a company is going to make money.

Why Is Strategic Management Important?

1. It results in higher organizational performance.
2. It requires that managers examine and adapt to business environment changes.
3. It coordinates diverse organizational units, helping them focus on organizational
goals.

What is the Strategic Management Process?

• Strategic management process - a six-step process that encompasses strategic
planning, implementation, and evaluation.

• Step 1: Identifying the organization’s current mission, goals, and strategies

o Mission: a statement of the purpose of an organization
▪ The scope of its products and services
• Goals: the foundation for further planning
▪ Measurable performance targets
• Step 2: Doing an external analysis
• The environmental scanning of specific and general environments
▪ Focuses on identifying opportunities and threats
• Step 3: Doing an internal analysis
• Assessing organizational resources, capabilities, and activities:
▪ Strengths create value for the customer and strengthen the
competitive position of the firm.
▪ Weaknesses can place the firm at a competitive disadvantage.

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 • Analyzing financial and physical assets is fairly easy, but assessing
intangible assets (employee skills, culture, corporate reputation, etc.) isn’t
as simple.

Steps 2 and 3 combined are called a SWOT analysis. (Strengths, Weaknesses,

Opportunities, and Threats)

SWOT Analysis
• SWOT analysis - an analysis of the organization’s strengths, weaknesses,
opportunities, and threats.
• Resources - an organization’s assets that are used to develop, manufacture, and
deliver a product to its customers.
• Capabilities - an organization’s skills and abilities in doing the work activities
needed in its business.
• Strengths - any activities the organization does well or any unique resources that
it has.
• Weaknesses - activities the organization does not execute well or needed
resources it does not possess.
• Core competencies - the organization’s major value-creating capabilities that
determine its competitive weapons.

• Step 4: Formulating strategies

o Develop and evaluate strategic alternatives.
o Select appropriate strategies for all levels in the organization that provide
relative advantage over competitors.
o Match organizational strengths to environmental opportunities.
o Correct weaknesses and guard against threats.
• Step 5: Implementing strategies
o Implementation - effectively fitting organizational structure and activities to
the environment.
o The environment dictates the chosen strategy; effective strategy
implementation requires an organizational structure matched to its
requirements.
• Step 6: Evaluating results
o How effective have strategies been?
o What adjustments, if any, are necessary?

Corporate Strategies
• Corporate strategy - an organizational strategy that determines what businesses a
company is in or wants to be in, and what it wants to do with those businesses.
o Types of Corporate Strategies
▪ Growth strategy - a corporate strategy that’s used when an organization
wants to expand the number of markets served or products offered, through
either its current business(es) or new business(es).
Growth: expansion into new products and markets.

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 • Stability strategy - a corporate strategy in which an organization continues
to do what it is currently doing.
Stability: maintenance of the status quo.
• Renewal strategy - a corporate strategy designed to address declining
performance.
Renewal: examination of organizational weaknesses that are
leading to performance declines.

• How Are Corporate Strategies Managed?

o Strategic Business Unit (SBU) - the single independent businesses of an
organization that formulate their own competitive strategies.
o BCG matrix - a strategy tool that guides resource allocation decisions on
the basis of market share and growth rate of SBUs.

The Role of Competitive Advantage

• Competitive strategy - an organizational strategy for how an organization will
compete in its business(es).
Competitive advantage - what sets an organization apart; its distinctive edge.
• Types of Competitive Strategies
o Cost Leadership Strategy - seeking to attain the lowest total overall costs
relative to other industry competitors
o Differentiation Strategy - attempting to create a unique and distinctive product
or service for which customers will pay a premium
o Focus Strategy - using a cost or differentiation advantage to exploit a
particular market segment as opposed to a larger market
• Five Competitive Forces (Porters)
• Threat of New Entrants - the ease or difficulty with which new competitors can
enter an industry
• Threat of Substitutes - the extent to which switching costs and brand loyalty
affect the likelihood of customers adopting substitute products and services
• Bargaining Power of Buyers - the degree to which buyers have the market
strength to hold sway over and influence competitors in an industry
• Bargaining Power of Suppliers - the relative number of buyers to suppliers
and threats from substitutes and new entrants affect the buyer-supplier
relationship.
o Current Rivalry – intensity among rivals increases when industry growth rates
slow, demand falls, and product prices descend. intensity

What is a Functional Strategy?

• Functional strategy - the strategies used by an organization’s various functional
departments to support the competitive strategy.

Current Strategic Management Issues

• The Need for Strategic Leadership
Strategic leadership - the ability to anticipate, envision, maintain flexibility,
think strategically, and work with others in the organization to initiate
changes that will create a viable and valuable future for the organization.

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 • The Need for Strategic Flexibility
Strategic flexibility - the ability to recognize major external changes, to
quickly commit resources, and to recognize when a strategic decision was
a mistake.

Important Organizational Strategies for Today’s Environment

• Strategies for Applying e-Business Techniques
o Cost Leadership - On-line activities: bidding, order processing, inventory
control, recruitment and hiring
o Differentiation - Internet-based knowledge systems, online ordering and
customer support
o Focus - Chat rooms and discussion boards, targeted Web sites
• Customer Service Strategies
o Giving the customers what they want
o Communicating effectively with them
o Providing employees with customer service training
• Innovation Strategies
o Possible Events - Radical breakthroughs in products; Application of existing
technology to new uses
o Strategic Decisions about Innovation - basic research, product
development, process innovation
o First Mover - an organization that brings a product innovation to the market
or uses new process innovations.

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 IV. REFERENCES

Books:
Robbins, S. and Coulter, M. (2016). Management, 13th Edition/Global Edition (pp.246-282).
Prentice Hall
Rice University: OpenStax. (2019). Principles of Management. (ch.8-9) Retrieved from
https://openstax.org/details/books/principles-management

Online Videos:
SME Strategic Consulting. (2017). Strategic Plan Examples- Overview of Several Strategic
Plans. https://youtu.be/qzwDRM8sHdI

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Name: ____________________________________
Year Level, & Section: ________________________ Date: ___________________
Instructor: Joven G. Ocampo
Learners Check: Kindly answer the following questions given below in an essay form, clearly and
concisely. Strictly no PLAGIARISM. Use proper citation of your references and factual information if
necessary.

I. Should Organizational Goals be always planed? If yes, why? if no, why not?

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II. In a Restaurant Business, how do you turn the threat of COVID-19, into opportunities? Site
examples.
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 III. In the Five Competitive Forces (Porters), which of these directly affect the following
statement: “With the impact brought about by COVID-19 pandemic, the Healthy Food Options
(Fruits and Vegetables) industry was positively affected due to greater demand” Expound your
answer

•
Threat of New Entrants - the ease or difficulty with which new competitors can enter
an industry
• Threat of Substitutes - the extent to which switching costs and brand loyalty affect the
likelihood of customers adopting substitute products and services
• Bargaining Power of Buyers - the degree to which buyers have the market strength to
hold sway over and influence competitors in an industry
• Bargaining Power of Suppliers - the relative number of buyers to suppliers and threats
from substitutes and new entrants affect the buyer-supplier relationship.
o Current Rivalry – intensity among rivals increases when industry growth rates slow,
demand falls, and product prices descend. intensity
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III. As a Hospitality Management Student, Studying through Flexible Learning Method like
Modular Type Learning Style, What would be your SWOT? Compare to the Online type of
Learning

Strength ____________________________________________________________________

Weakness ____________________________________________________________________

Opportunities _________________________________________________________________

Threats _______________________________________________________________________

(Leave Blank: For Faculty Use)

RUBRICS FOR ESSAY
2 1.5 1 .5 Score
1. Organization
2. Quality of Information
3. Interest Level
4. Neatness
5. Timeliness
TOTAL

Note:
Use additional paper if needed. Kindly detach the Learning check pages upon returning (if printed)
For clarification or question you can message me at
Email: joven_ocampo@spcf.edu.ph
Phone: 09675127819

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