《Contemporary Management》chpt 7 The Manager as a Planner and Strategist

TThe Manager as a MA A Planner and Strategist OThe McGraw-Hill Companies. Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-1 The Manager as a Planner and Strategist 7

7-2 The Planning Process Planning is the process used by managers to identify and select goals and courses of action for the organization oThe organizational plan that results from the planning process details the goals to be attained .The pattern of decisions managers take to reach these goals is the organizations strategy " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-2 The Planning Process Planning is the process used by managers to identify and select goals and courses of action for the organization. ⚫The organizational plan that results from the planning process details the goals to be attained. ⚫The pattern of decisions managers take to reach these goals is the organization’s strategy

7-3 Three Stages of the Planning Process gure Determining the Organizations mission and goals (Define the business trategy formulation (Analyze current situation develop strategies) Strategy Implementation (Allocate resources responsibilities to achieve strategies) " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-3 Three Stages of the Planning Process Determining the Organization’s mission and goals (Define the business) Strategy formulation (Analyze current situation & develop strategies) Strategy Implementation (Allocate resources & responsibilities to achieve strategies) Figure 7.1

7-4 Planning Process Stages oOrganizational mission: defined in the mission statement which is a broad declaration of the overriding purpose. The mission statement identifies product, customers and how the firm differs from competitors o Formulating strategy managers analyze current situation and develop strategies needed to achieve the mission Implementing strategy: managers must decide how to allocate resources between groups to ensure the strategy is achieved " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-4 Planning Process Stages ⚫Organizational mission: defined in the mission statement which is a broad declaration of the overriding purpose. ◼ The mission statement identifies product, customers and how the firm differs from competitors. ⚫Formulating strategy: managers analyze current situation and develop strategies needed to achieve the mission. ⚫Implementing strategy: managers must decide how to allocate resources between groups to ensure the strategy is achieved

7-5 Levels of Planning Figure 7.2 Corporate Business Functional level plan level plan level plan Corporate 0a Divisional Functional mission goals goals 0a Setting Strategy Corporate- Business Functional- level strategy level strategy level strategy Formulation Design of Design of Design of Strategy Corporate Business-unit Functional Implementation Structure Structure Structure Control Control Control " win/MeGraw-HHill OThe McGraw-Hill Companies. Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-5 Levels of Planning Strategy Implementation Corporate mission & goals Divisional goals Functional goals Corporate￾level strategy Business￾level strategy Functional￾level strategy Design of Corporate Structure Control Design of Business-unit Structure Control Design of Functional Structure Control Goal Setting Strategy Formulation Corporate￾level Plan Business￾level Plan Functional level Plan Figure 7.2

7-6 Planning at General electric Figure 7.3 CEO C orporate Level COrporate Office Business Level GE GE GE GE NBC Aircraft Lighting Motors Plastics Functional Level Manufacturing Accounting Marketing r& D " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-6 Planning at General Electric Corporate Level CEO Corporate Office Business Level GE Aircraft GE Lighting GE Motors GE Plastics NBC Functional Level Manufacturing Marketing Accounting R & D Figure 7.3

7-7 Planning levels o Corporate-level decisions by top managers. Considers on which businesses or markets to be in Provides a framework for all other planning o Business-level: details divisional long-term goals and structure. Identifies how this business meets corporate goals Shows how the business will compete in market .Functional-level actions taken by managers in departments of manufacturing, marketing, etc These plans state exactly how business-level strategies are accomplished " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-7 Planning Levels ⚫Corporate-level: decisions by top managers. ◼ Considers on which businesses or markets to be in. ◼ Provides a framework for all other planning. ⚫Business-level: details divisional long-term goals and structure. ◼ Identifies how this business meets corporate goals. ◼ Shows how the business will compete in market. ⚫Functional-level: actions taken by managers in departments of manufacturing, marketing, etc. ◼ These plans state exactly how business-level strategies are accomplished

7-8 Characteristics of plans o Time horizon: refers to how far in the future the plan applies. Long-term plans are usually 5 years or more Intermediate-term plans are 1 to 5 years Corporate and business level plans specify long and intermediate term Short-term plans are less than I year Functional plans focus on short to intermediate term o Most firms have a rolling planning cycle to amend plans constantly. win/MeGraw-Hill CThe McGraw-Hill Companies, Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-8 Characteristics of Plans ⚫Time horizon: refers to how far in the future the plan applies. ◼ Long-term plans are usually 5 years or more. ◼ Intermediate-term plans are 1 to 5 years. ◆ Corporate and business level plans specify long and intermediate term. ◼ Short-term plans are less than 1 year. ◆ Functional plans focus on short to intermediate term. ⚫Most firms have a rolling planning cycle to amend plans constantly

7-9 Types of Plans sTanding plans: for programmed decisions. Managers develop policies, rules, and standard operating procedures(SOP) e Policies are general guides to action o Rules are a specific guide to action o Single-use plans: developed for a one-time nonprogrammed issue. Usually consist of programs and projects Programs: integrated plans achieving specific goals Project: specific action plans to complete programs Irwin/McGraw-Hill CThe McGraw-Hill Companies, Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-9 Types of Plans ⚫Standing plans: for programmed decisions. ◼ Managers develop policies, rules, and standard operating procedures (SOP). ◆ Policies are general guides to action. ◆ Rules are a specific guide to action. ⚫Single-use plans: developed for a one-time, nonprogrammed issue. Usually consist of programs and projects. ◼ Programs: integrated plans achieving specific goals. ◼ Project:specific action plans to complete programs

7-10 Who plans? o Corporate level planning is done by top anagers Also approve business and functional level plans a Top managers should seek input on corporate level issues from all management levels o Business and functional planning is done by divisional and functional managers Both management levels should also seek information from other levels Responsibility for specific planning may lie at a given level, but all managers should be involved " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 7-10 Who Plans? ⚫Corporate level planning is done by top managers. ◼ Also approve business and functional level plans. ◼ Top managers should seek input on corporate level issues from all management levels. ⚫Business and functional planning is done by divisional and functional managers. ◼ Both management levels should also seek information from other levels. ◼ Responsibility for specific planning may lie at a given level, but all managers should be involved