CHAPTER 5: PLANS AND PLANNING TECHNIQUES

How and Why do managers use the planning process?

 Planning is one of the four functions of management
 Planning is the process of setting objectives and identifying how to
achieve them.
 Planning improves focus and action orientation
 Planning improves coordination and control
 Planning improves time management.
What types of plans do managers use?
 Managers use short-range and long-range plans.
 Managers use strategic and operational plans.
 Organizational policies and procedures are plans.
 Budgets are plans that commit resources to activities.
What are some useful planning tools and techniques?
 Forecasting tries to predict the future.
 Contingency planning creates back-up plans for when things go
wrong.
 Scenario planning crafts plans for alternative future conditions.
 Benchmarking identifies best practices.
 Staff planners provide special expertise.
 Participatory planning improves implementation.
 Goal setting helps align plans and activities.
What are functions of manager plan?
How many planning steps and what is it? _ 5 steps
1. Define objectives
Stretch goals – performance targets that require hard work
2. Determine current status compared to objectives
3. Develop premises regarding future conditions and generate
alternative scenarios for what may happen
4. Analyze alternatives and make a plan
5. Implement and evaluate the plan
Why we need to planning ?
Good planning makes us:
 Action oriented—keeping a results-driven sense of direction
 Priority oriented—making sure the most important things get first
attention
 Advantage oriented—ensuring that all re-sources are used to best
advantage
 Change oriented—anticipating problems and opportunities so they
can be best dealt with
Planning improves focus and action orientation
 Action orientation
 Clear priorities
 Avoid complacency trap
Improved coordination and control
 Planning links with control so success can be measured
 Hierarchy of objectives – lower level objectives help accomplish
higher ones
What are Time Frames, Strategy, policies, procedures and budgets,
forecasting, contingency and scenario planning, benchmarking?
Quizlet !!!!
 CHAPTER 6: CONTROLS AND CONTROL SYSTEMS
How and why do managers use the control process?
 Managers use feedforward, concurrent and feedback controls
 Managers use both internal and external controls
 Management by objectives is a way of integrating planning and
controlling
How many steps to control process?
There are 4 steps:

Step 1:
Control starts with objectives and standards
 Output standards measure results in terms of quantity, quality, cost or
time
 Input standards measure the work efforts that go into the
performance task
Step 2:
Control measures actual performance
 Agreed-upon standards
 Accurate and timely measurement
Step 3:
Control compares results with objectives and standards

Desired Performance
- Actual Performance Need for action
Step 4:
Control takes corrective action as needed
 Management by exception is the practice of giving attention to
situations that show the greatest need
What types of controls are used by managers?
Organizations are open systems that interact with environment with input,
throughput and output controls

What are some useful organizational control tools and techniques?

Project Management Tools
 Gantt Charts
 CPM/PERT Charts
- Critical Path
Control systems and techniques
 Quality control is a foundation of modern management
 Gantt charts and CPM/PERT are used in project management and
control
 Inventory controls help save costs
 Breakeven analysis shows where revenues will equal costs
 Financial ratios and balanced scorecards strengthen organizational
controls
What types of objectives?
 Improvement objectives state goals for improvement in measurable
terms
“increase sales by 5%”
 Personal development objectives focus on personal growth
“learn a second language”
What is breakeven analysis ?
 Breakeven Point
- is the point at which revenues equal costs
 Breakeven Analysis
- calculates the point at which sales revenues cover costs.

How to Calculate a Breakeven Point

Breakeven Point = Fixed Costs / (Price - Variable Costs)
 CHAPTER 7 : STRATEGY AND STRATEGIC MANAGEMENT
What types of strategies are used by organizations?
 Strategy is a comprehensive plan for achieving competitive
advantage
 Organizations use corporate, business, and functional strategies
 Growth strategies focus on expansion
 Restructuring and divestiture focus on consolidation
 Global strategies focus on international business initiatives
 Cooperative strategies focus on alliances and partnerships
 E-business strategies focus on using the Internet for business
success
How do managers formulate and implement strategies?
Strategy formulation:
 Mission Statement
- The reason for the organizations’ existence in society
 Operating Objectives
- Specific results that organizations attempt to achieve
Common Operating Objectives of Organizations
- Profitability
- Market share
- High-quality workforce
- Cost efficiency
- Product and service quality
- Innovativeness
- Social responsibility