Sixth Edition
CHAPTER
3
2008 Prentice Hall, Inc. All rights reserved.
Foundations of Planning
PowerPoint Presentation by Charlie Cook The University of West Alabama
LEARNING OUTCOMES After reading this chapter, you will be able to:
1. Define planning. 2. Explain the potential benefits of planning. 3. Identify potential drawbacks to planning. 4. Distinguish between strategic and tactical plans.
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Planning Defined
Defining the organizations objectives or goals Establishing an overall strategy for achieving those goals Developing a comprehensive hierarchy of plans to integrate and coordinate activities
Planning is concerned with ends (what is to be done) as well as with means (how it is to be done).
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EXHIBIT 31
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EXHIBIT 32
Types of Plans
BREADTH OF USE
TIME FRAME
SPECIFICITY
FREQUENCY OF USE
Strategic
Long term
Directional
Single use
Tactical
Short term
Specific
Standing
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Tactical Plans
Specify the details of how an organizations overall
Short-term Plans
Cover less than one year.
Long-term Plans
Extend beyond five years.
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Strategic Planning
Strategic Plans
Apply broadly to the entire organization. Establish the organizations overall objectives.
environment. Provide direction to drive an organizations efforts to achieve its goals. Serve as the basis for the tactical plans. Cover extended periods of time. Are less specific in their details.
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Tactical Planning
Tactical Plans (Operational Plans)
Apply to specific parts of the organization. Are derived from strategic objectives. Specify the details of how the overall objectives are
to be achieved.
Cover shorter periods of time. Must be updated continuously to meet current
challenges.
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EXHIBIT 33
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misinterpretation.
Directional Plans
Are flexible plans that set out general guidelines.
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situation.
Standing Plan
Is ongoing and provides guidance for repeatedly
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Management by Objectives
Management by Objectives (MBO)
A system in which specific performance objectives
are jointly determined by subordinates and their supervisors, progress toward objectives is periodically reviewed, and rewards are allocated on the basis of that progress.
Links individual and unit performance objectives at
important results.
Motivates rather than controls.
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EXHIBIT 34
Cascading of Objectives
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Goal Specificity
Performance Feedback
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Goal Difficulty
Goal Specificity
Top Management
Participation
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EXHIBIT 35
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1. Describe your companys background and purpose. 2. Identify your short- and long-term objectives. 3. Provide a thorough market analysis. 4. Describe your development and production emphasis. 5. Describe how youll market your product or service.
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Objectives
Are specific measures (milestones) for achievement,
Strategic Plan
Explains the business founders vision and describes
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Competitive Intelligence
Information about competitors that allows managers
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EXHIBIT 36
SWOT analysis
Analysis of an organizations strengths, weaknesses, opportunities, and threats in order to identify a strategic niche that the organization can exploit
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SWOT Analysis
Strengths (Strategic)
Internal resources that are available or things that an
Weaknesses
Resources that an organization lacks or activities that it does
not do well.
Opportunities (Strategic)
Positive external environmental factors.
Threats
Negative external environmental factors.
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Growth
Stability
Retrenchment
Combination
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Growth Strategies
Strategies for Growth
Direct Expansion
Merger
Acquisition
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Competitive Strategies
Strategies for Competitive Advantage
Cost Leadership
Differentiation
Focus
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Strategy Formulation
Evaluation
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ISO 14000
Companies achieving this certification will have
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To design, measure, analyze, and control the input side of a production process to achieve the goal of no more than 3.4 defects per million parts or procedures.
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EXHIBIT 37
Select the critical-to-quality characteristics. Define the required performance standards. Validate measurement system, methods, and procedures. Establish the current processes capability.
Define upper and lower performance limits. Identify sources of variation. Screen potential causes of variation to identify the vital few variables needing control. Discover variation relationship for the vital variables. Establish operating tolerances on each of the vital variables. Validate the measurement systems ability to produce repeatable data. Determine the capability of the process to control the vital variables. Implement statistical process control on the vital variables.
Source: Cited in D. Harold and F. J. Bartos, Optimize Existing Processes to Achieve Six Sigma Capability, reprinted from Control Engineering Practice, 1998, p. 87, with permission from Elsevier Science. 2008 Prentice Hall, Inc. All rights reserved. 333
New Knowledge
The Incongruous
Changes in Perception
Demographics
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