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LOGO
PLANNING
A particular kind of
decision making that
addresses the specific
future that managers
desire for the
organizations.

By failing to prepare, you are
prepring to fail
- Benjamin Franklin
WHY ARE GOALS IMPORTANT?
1
Goals provide a sense of direction
2
Goals focus our efforts..
3
Goals guide our plans and decision.
4
Goals help us evaluate our progress

PLANNING: AN OVERVIEW
THE HIERARCHY OF ORGANIZATION PLANS
IMPORTANCE OF PLANNING AT ORGANIZATIONS

A BROAD GOAL ON MANAGERS
ASSUMPTIONS ABOUT THE ORGS
PURPOSE, COMPETENCIES, AND
PLACE IN THE WORLD

CONTAIN DETAILS FOR CARRYING
OUT, OR IMPLEMENTING, THOSE
STRATEGIC PLANS IN DAY-TO-DAY
ACTIVITIES.

DESIGNED BY HIGH-RANKING
MANAGERS AND DEFINE THE
BROAD GOALS FOR THE ORG.




MISSION
STATEMENT
STRATEGIC
PLANS
OPERATIONAL PLANS
HOW STRATEGIC AND OPERATIONAL
PLANS DIFFER?

WAYS


STRATEGIC
PLANS

OPERATIONAL
PLANS
TIME HORIZONS Tend to look ahead
several years or
even decades
A year is often a
relevant period
SCOPE Affects a wide range
of organizational
activities
Narrow and more
limited scope

DEGREE OF DETAIL Simplistic and
generic
Finer detail.
3 MAJOR WAYS
EVOLUTION OF THE CONCEPT OF STRATEGY

GREEK
Strategia- art or science of being a general
BASIS FOR THE GRAND STRATEGY PLAN was
taken together from the concept of strategy had
both planning component and a decision making/
action component.


STRATEGY AS THE GRAND PLAN


STRATEGIC MANAGEMENT-
Management process that involves, an
organizations engaging in strategic planning and
then acting on those plans.

1962- ALFRED CHANDLER
Defined strategy as the determination of the basic
long term goals and objectives of an enterprise, and
the adoption of courses of action and the allocation
of resources necessary for carrying out these goals.

THE RISE OF STRATEGIC MANAGEMENT


4 KEY ASPECTS( HOFER & SCHENDEL)
1. GOAL SETTING
2. STRATEGY FORMULATION
3. ADMINISTRATION
STRATEGIC CONTROL
STRATEGIC MANAGEMENT APPROACH


2 PHASES
1. STRATEGIC PLANNING
-is the name we customarily give to the
sense making activity
2. STRATEGY IMPLEMENTATION
- is the name we customarily give to
actions based on the kind of planning.
STRATEGIC MANAGEMENT PROCESS
LEVELS OF STRATEGY: SOME
KEY DISTINCTIONS
CORPORATE- LEVEL STRATEGY


Strategy formulated by top
management to oversee the interests
and operations of more than one line
business
BUSINESS- UNIT STATEGY


Strategy formulated to meet the goals
of a particular business, also called
line-of-business strategy.
FUNCTIONAL-LEVEL
STRATEGY

Strategies create framework for
managers in each function such as
marketing or production to carry out
business-units strategy and corporate
strategies.
The content of Corporate Strategy


Corporate Strategy- the idea about
how people at an organization will
interact with people at other
organization over time.
The Corporate Portfolio Approach
In this approach, top management
evaluates each of the corporations
various business units with respect to
the market place and the
corporations internal make-up.
One of the best-known examples of
the corporate portfolio approach is
the Portfolio framework advocated by
the Boston Consulting group is also
known as BCG Matrix
STAR
Modest
+ or
Cash flow
QUESTION MARK
Large
Negative cash flow
CASH COW
Large
Positive cash flow
DOG
Modest
+ or
Cash flow

HIGH

LOW

HIGH

LOW
MARKET
GROWTH
RATE
RELATIVE MARKET
SHARE
FIVE FORCES CORPORATE STRATEGY
Another approach to corporate
strategy is Michael Porters five
forces model.
In Porters view an organizations
ability to compete in a given market is
determined by the organizations
technical and economic resources, as
well as by five environmental forces
each of which threatens the
organizations venture into market.

Threat of New Entrants
Bargaining power of buyers
(customers)
Bargaining power of suppliers
Threat of Substitute Products
Rivalry among competitors

CORPORATE ENTERPRISE
STRATEGY


Enterprise strategy ( E- Strategy) a
statement of values and principles
that explains why an organization
does what it does.
7 Different Enterprise Strategy
Stockholder E-Strategy the
corporation should maximize the
interests of stockholder
Managerial Prerogative E-Strategy
the corporation should maximize the
interest of management.
Restricted Stakeholder E- Strategy-
the corporation should maximize the
interest of a narrow set of
stakeholders, such as customers,
employees, and stockholders.

Unrestricted Stakeholder E-Strategy
the corporation should maximize the
interest of all stakeholders.
Social Harmony E-Strategy the
corporation should maximize social
harmony

Rawlsian E-Strategy the corporation
should promote inequality among
stakeholders only if inequality results
in raising the level of the worst-off
stakeholder.
Personal Project E- Strategy the
corporation should maximize its
ability to enable corporate members
to carry out their personal projects.
Collective Strategy


Occurs when people at different
organizations with common concerns
collaborate to determine how they will
approach certain issues.
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LOGO
Operat i onal i zi ng St rat egy
O p e r a t i o n a l S t r a t e g y
Plan of action implemented by a firm that describes how they will employ their
resources in the production of a product or service.
T h e c o n v e r s i o n o f s t r a t e g i c g o a l s
i n t o e x e c u t i o n
T w o G e n e r a l C l a s s e s :
S i n g l e - U s e P l a n s
S t a n d i n g P l a n s
PROGRAM
Si ngl e- Use Pl ans
PROJ ECT
BUDGET
A s i n g l e - u s e p l a n t h a t c o v e r s a
r e l a t i v e l y l a r g e s e t o f a c t i v i t i e s .
S m a l l e r a n d s e p a r a t e p o r t i o n s o f
p r o g r a m s ; t h e y a r e l i m i t e d i n s c o p e
a n d c o n t a i n d i s t i n c t d i r e c t i v e
c o n c e r n i n g a s s i g n m e n t s a n d t i m e .
S t a t e m e n t s o f f i n a n c i a l r e s o u r c e s
s e t a s i d e f o r s p e c i f i c a c t i v i t i e s i n a
g i v e n p e r i o d o f t i m e .
A d e t a i l e d c o u r s e s o f a c t i o n t h a t p r o b a b l y w i l l n o t b e r e p e a t e d i n
t h e s a m e f o r m i n t h e f u t u r e .
St andi ng Pl ans
A pre-established single decision or set of decisions. It consist of policies, rules and more detailed procedures.
Po l i c i e s
Ru l e s
Pr o c e dur e s
A g e n e r a l g u i d e l i n e f o r d e c i s i o n m a k i n g , I t s e t s
u p b o u n d a r i e s a r o u n d d e c i s i o n s , t e l l i n g m a n a g e r s
w h i c h d e c i s i o n s c a n b e m a d e a n d w h i c h c a n n o t .
S t a t e m e n t s o f s p e c i f i c a c t i o n s t o b e
t a k e n i n a g i v e n s i t u a t i o n .
D e t a i l e d s e t o f i n s t r u c t i o n s f o r
p e r f o r m i n g a s e q u e n c e o f a c t i o n s
t h a t o c c u r s o f t e n o r r e g u l a r l y .
Us i n g P r o c e d u r e s t o F a c i l i t a t e I mp l e me n t a t i o n
T h e y i d e n t i f y p r e c i s e l y w h a t m u s t b e
a c c o m p l i s h e d e a c h y e a r t o a c h i e v e a n
o r g a n i z a t i o n s s t r a t e g i c g o a l s .
A f o r m a l s e t o f p r o c e d u r e s t h a t b e g i n s w i t h g o a l
s e t t i n g a n d c o n t i n u e s t h r o u g h p e r f o r m a n c e r e v i e w .
C o n t r i b u t e s t o s t r a t e g y i m p l e m e n t a t i o n b y s h a p i n g
i n d i v i d u a l a n d g r o u p b e h a v i o r . I t m o t i v a t e s e m p l o y e e s t o
d i r e c t t h e i r p e r f o r m a n c e t o w a r d s t h e o r g a n i z a t i o n a l g o a l s .
ANNUAL OB J E CTI VE S
MANAGE ME NT B Y
OB J E CTI VE S
RE WARD
S Y S TE MS
An n u a l Ob j e c t i v e s
E x a mp l e s :
T o e n h a n c e o r i mp r o v e t h e t r a i n i n g e f f o r t .
T o i mp r o v e t h e b u s i n e s s s i ma g e .
D e f i c i e n t A n n u a l O b j e c t i v e s
A n n u a l O b j e c t i v e s w i t h m e a s u r a b l e c r i t e r i a f o r p e r f o r m a n c e
T o i n c r e a s e t h e n u mb e r o f i n d i v i d u a l s c a p a b l e o f
p e r f o r mi n g X o p e r a t i o n i n ma n u f a c t u r i n g b y 2 0 % b y A p r i l
1 5 , 2 0 X X
T o p r o v i d e s a l e s t r a i n i n g t o X n u mb e r o f i n d i v i d u a l s ,
r e s u l t i n g i n a n a v e r a g e i n c r e a s e i n s a l e s o f 4 % w i t h i n s i x
mo n t h s a f t e r t h e t r a i n i n g s e s s i o n .
Ma n a g e me n t b y Ob j e c t i v e s
E l e me n t s o f t h e MB O S y s t e m
C o mmi t me n t t o t h e p r o g r a m.
T o p - l e v e l g o a l s e t t i n g .
I n d i v i d u a l g o a l s .
P a r t i c i p a t i o n .
A u t o n o my i n i mp l e me n t a t i o n o f p l a n s .
P e r f o r ma n c e r e v i e w .
Re wa r d S y s t e ms
E l e me n t s o f R e w a r d S y s t e m
F i n a n c i a l R e w a r d s
B a s e S a l a r y
P a y I n c e n t i v e s
E mp l o y e e B e n e f i t s
N o n - F i n a n c i a l R e w a r d s
I n t r i n s i c r e w a r d s
P r a i s e , R e c o g n i t i o n
P o l i c y I s s u e s i n R e w a r d S y s t e m
J o b - b a s e d v s . I n d i v i d u a l - b a s e d P a y D e s i g n
S e n i o r i t y
F i x e d v s . V a r i a b l e P a y
P e r f o r ma n c e v s . Me mb e r s h i p a s B a s i s F o r R e w a r d s
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LOGO