Mgmt Ch. 3

• Managerial function that involves
•  - define orgs goals
•  - establish strategy for acheiving goals
•  - develop plans to integrate and coordinate work
• Types of planning
•  - informal = not written down. short term focus, specific to an org unit
•  - formal = written, specific, long term, shared goals for org

• provides direction towards achieving goals
• reduces uncertainty
• minimizes waste and redundancy
• sets standard for controlling

• formal planning brings higher profits
• quality of planning and implementation affects performance more than the extent of planning
• external env can reduce impact of planning on performance
• formal planning must be used at least 4 years b/f planning begins to affect performance

• goals (objectives)
•  - desired outcomes for individuals, groups or orgs
•  - provide direction and performance evaluation criteria
• plans
•  - docs that outline how goals are to be accomplished
•  - describe how resources are to be allocated and establish activity schedules

• broad goals are set at top of org
• goals broken up into subgoals for each org level
• goals are intended to direct, guide, and constrain from above

• performance goals are jointly set by employees and managers
• progress toward accomplishing goals is periodically reviewed
• rewards are allocated on the basis of this progress
• KEY ELEMENTS = goal specificity, participative decision making, an explicit time period, performance feedback

• written in outcomes, not actions
• measurable, quantifiable 
• clear time frame
• challenging yet attainable
• written down
• communicated to all necessary org members

• STRATEGIC PLANS
•  - apply to entire org
•  - establish orgs overall goals
•  - position org in terms of its env
•  - cover extended periods of time
• OPERATIONAL PLANS
•  - specify the details of how overall goals are to be achieved
•  - cover short time period

• LONG TERM PLANS
•  - time frames extending beyond 3 years
• SHORT TERM PLANS
•  - time frames one year or less

• SPECIFIC PLANS
•  - clearly defined and leave no room for interpretaion
• DIRECTIONAL PLANS
•  - flexible plans that set out general guidelines, but do not set out specific goals or courses of action

• SINGLE USE PLAN
•  - one time plan specifically designed to meet needs of unique situation
• STANDING PLANS
•  - outgoing plans that provide guidance for activities performed repeatedly

• Forecasting
• Contingency planning
• Scenario planning
• benchmarking

predict the future and develop plans accordingly

• identify alternative plans for outcomes that are different than expected
• high uncertainty = plans that are specific and flexible

type of contingency planning but is more long term

Search for best practices among competitors and mimic them

what managers do to develop orgs strategies

• Plans for how org will do what it intends to do
• do job successfully
• satisfy consumers

• strategic design for how company will make profit of its strategies, work processes, and work activities 
• focuses on 2 things
• 1 will consumers value what company is doing
• 2 will company make money doing it

6 step process from planning to implementation, evaluation

vision and mission statements

• provides info on resources and capabilities
• RESOURCES
• CAPABILITIES
• CORE COMPETENCIES
• QUALITY MGMT
• STRENGTHS 
• WEAKNESSES

• assets - financial, human, physical, intangible
• used by org to develop manufacture and deliver products or services to consumer

skills and abilities in doing the work activities needed in business

orgs major value creating skills, capabilities and resources that determine its competitive weapons

philosophy of mgmt driven by continual improvement and responding to customer needs

• SWOT
• know what competition is doing
• analyze both general and specific env.
• PESTEL

• political, economic, socio-cultural, technological, environmental, legal
• shapes external env.

• develop and evaluate strategic alternatives
• select strategies that capitalize on environmental opportunities, or strengths of business
• complete when a strategy is developed that gives company an advantage over competition

• has to be implemented properly to be effective
• involve all members in this step

• how effective have strategies been?
• adjustments?

• Corporate
• Business
• Functional

• evaluates what business a company is in, should be in, or wants to be in and what it wants to do with these businesses
• Factors
•  - growth, growth strategy - org want to grow by expanding # of products offered or markets served
•  - concentration, org concentrates on primary line of business. no acquisitions or merges, increase existing business
•  - vertical integration, gain control of inputs or outputs eg. becoming own supplier
•  - horizontal integration, org grows by combining with other companies
•  - diversification, related - org acquires firms in similar, but different industries. Unrelated - org acquires firms in different unrelated industries
•  - Stability, stability strategy - strategy characterized by absence of significant change in what org is already doing
•  - renewal, when org is in trouble. Renewal strategies - 2 types 1. Retrenchment - reduces operations or activities. Helps to stabilize and revitalize. 2. Turnaround - org problems are more critical

growth strategy - org want to grow by expanding # of products offered or markets served

org concentrates on primary line of business. no acquisitions or merges, increase existing business

gain control of inputs or outputs eg. becoming own supplier

gain control of inputs or outputs eg. becoming own supplier

• related - org acquires firms in similar, but different industries.
• Unrelated - org acquires firms in different unrelated industries

stability strategy - strategy characterized by absence of significant change in what org is already doing

• when org is in trouble.
• Renewal strategies - 2 types
• 1. Retrenchment - reduces operations or activities. Helps to stabilize and revitalize.
• 2. Turnaround - org problems are more critical

Each unit w/i corp translates corporate strategy into a set of business strategies to give org a competitive advantage

what sets company apart, its distinct edge that comes from core competencies

• org sets out to be the lowest cost producer in its industry
• cut out overhead costs
• eg walmart

• company offers unique products that are widely valued by the customer
• set the firm apart from competition

• company pursues a cost or differentiation advantage in a narrow industry segment
• serve narrow segment

situation in which an org is unable to develop a competitive advantage through cost or differentiation

• used by a functional department to support the business strategy of the org
• eg. hr and accounting and employees all have same strategy in mind. Westjet