Chapter 10 - Management activity 1 - PLANNING

• planning - occurs when management looks to the future and sets specific goals for the business
• benefits of planning - anticipates problems, identifies strengths, weaknesses, opportunities and threats
• strategic plan - 1-5 years - senior management - breaks down the mission statement into long-term business plans
• tactical plan - 1-2 years - middle management - breaks down strategic plans into short-term plans and helps the business to achieve the strategic plan
• operational plan - 0-1 years - all management levels - plans for the day-to-day running of the business
• contingency plan - 0-1 years - all management levels - back-up plan used to deal with unforseen events or emergencies
• human resource (manpower) plan - 0-1 years - human resource manager - ensures that the business has the correct number of employees, with the correct skills and qualifications to fill all roles in the firm
• financial plan - 0-1 years - finance manager - business prepare cash flow forecasts to predict the amount of income they will receive and spend in the particular period of time
• SMART plan - specific, measurable, achievable, relevant and timed
• SWOT analysis - strengths, weaknesses, opportunities and threats
• steps in the planning process - 1 assess current situation, 2 set a goal, 3 create a plan, 4 implement the plan, 5 review the plan
• investors - financial planning can show investors that the business is able to repay loans borrowed - it also shows projected sales and profits, which may lead to increased dividends for shareholders
• employees - human resource planning can indicate to employees if there will be future promotion opportunities in the business
• suppliers - strategic and tactical plans can indicate to suppliers that the business intends to expland