Chap 3

• Planning


  A process that involves the setting of the organization's goals, developing plans of action and establishing strategies to achieve these goals
• Goals


  The targets or desired ends that management wants to reach
• Plans


  The actions or means that managers intend to use to achieve organizational goals
• Strategies


  A set of competitive moves and actions that a business uses to attract customers, compete successfully and strengthen performance to achieve organizational goals
• Organizational Goals


  • Mission
  • Vision
  • Objectives
• Mission


  Defines the purpose of an organization. It describes the reason for its existence and what it aims to achieve in the long term
• Vision


  A mental image of what the organization will be in the future as desired by the company management and employees
• Objectives


  Specific, measurable targets that support the mission and vision of an organization. They are the actionable steps or milestones that need to be accomplished to achieve the broader goals
• Mission


  • "To serve great tasting food, bringing the joy of eating to everyone."
  • "To refresh the world, to inspire moments of optimism and happiness, to create value and make a difference."
  • "To organize the world's information and make it universally accessible and useful."
  • "To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time."
• Vision


  • "To become the world's leading consumer company for automotive products and services."
  • L
• Objective


  • "To increase sales by 30% at the end of the second quarter using the newly acquired machines."
• Steps in Planning


  1. Define your goals

  2. Determine where you stand in relation to set goals

  3. Develop premises regarding future scenarios

  4. List possible plans of actions, carefully evaluate each and choose the best alternative

  5. Implement the plan and evaluate the result

  6. Take corrective actions or revise plans as needed
• Planning at the Different Levels of the Firm

  • Strategic Plans (Top-Level)
  • Tactical Plans (Middle-Level)
  • Operational Plans (Lower-Level)
• Strategic Plans


  Plans that establish the organization's overall goals and apply to the entire firm. They are broad in scope and are the responsibility of the organization's top level managers.
• Tactical Plans


  A set of procedures for changing or transforming broad strategic plans into specific plans that are applicable and needed in one department of the organization. They are prepared by middle level managers.
• Operational Plans


  Plans that apply to a particular unit area only. Their scope is narrow and they are prepared by lower level managers.
• Other Types of Plans

  • Long-term plans (beyond 3 years)
  • Short-term plans (1-3 years or less)
  • Directional plans (general guidelines only)
  • Specific plans (clearly stated)
  • Standing plans (on-going)
• Planning Techniques and Tools

  • Forecasting
  • Contingency plans (with trigger points)
  • Scenario planning
  • Benchmarking
  • Participatory planning
• Forecasting


  An attempt to predict what may happen in the future
• Contingency plans


  Alternative courses of action when the unexpected happens or when things go wrong. Trigger points indicate when the prepared alternative plan should be implemented.
• Scenario planning


  Planning for future states of affairs, a long term version of contingency planning
• Benchmarking


  Searching for best practices used by other organizations that enabled them to achieve superior performance, and incorporate these practices into the company's operations
• Participatory planning


  Including the people who will be affected by the plans and those who will implement these plans