ch6

• Planning


  The primary management function. Defining the organizations objectives or goals, establishing an overall strategy for achieving these goals and developing a comprehensive hierarchy of plans to integrate and coordinate activities

  
• Formal planning


  1. Defining specific goals covering a specific time period. 2. Writing down these goals and making them available. 3. Using these goals to develop specific plans that clearly define the path the organization will take.

  
• Reasons for planning


  • Provide direction
  • Reduce uncertainty
  • Minimize waste and redundancy
  • Set performance standards
  • Facilitate coordination
  • Promote forward thinking
• Criticisms of formal planning include: may create rigidity, can't replace intuition and creativity, focuses attention on today's success not tomorrow's survival, reinforces success which may lead to failure
• Formal planning is associated with higher profits, higher return on assets, improved quality of planning, and appropriate implementation
• Strategic management


  What managers do to develop an organization's strategies
• Strategies


  Plans for how the organization will do what it's in business to do, how it will compete successfully, and how it will attract its customers in order to achieve its goals
• Strategic management examples


  • Coca-Cola
  • Toyota
  • Spotify
• Toyota's strategic management


  • Founded in 1937 by Kiichiro Toyoda
  • GM, Ford, Chrysler accounted for 82% sales in 1955
  • Established first manufacturing plant in the US in 1974
  • NUMMI joint corporation with GM established in the US in 1984
  • Continuously improving functional level strategy, day to day operation
  • Becoming a cost leader in their category without compromising quality
• Strategic management has a positive impact on organizational performance, prepares managers to cope with changing situations, and is important for complex and diverse organizations
• Steps in the strategic management process

  1. Identify the organization's current mission, goals, and strategies

  2. External analysis

  3. Internal analysis

  4. Formulate strategies

  5. Implement strategies

  6. Evaluate results

  
• Mission statement


  A statement of an organization's purpose
• Mission statement examples


  • Starbucks
  • Nike
• Components of a mission statement

  • Products/services
  • Markets
  • Technologies
  • Concern for survival, growth, and profitability
  • Philosophy
  • Self-concept
  • Concern for public image
  • Concern for employees
• External analysis

  Analyzing the competition, components of the environment (economic, demographic, political, legal, socio-cultural, technological, global), identifying opportunities and threats