Week 3 – Introduction to Management
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Topics
 Planning Process
 Planning Steps
 Levels of Planning
 Strategic Planning
 Strategic Planning Process
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Plans
 The actions or means managers intend to use to achieve organizational goals.
 Single-use plans: designed to achieve a set of goals that are not likely to be
repeated in the future.
 Standing plans: focus on ongoing activities designed to achieve an enduring
set of goals.
 Contingency plans: specify actions to take when a company’s initial plans
have not worked well or events in the external environment require a
sudden change.
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SMART Goals
 Specific: Goals are precise, describing particular behaviors and
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outcomes.
Measurable: Desired results can be quantified.
Attainable (but challenging): Goals can be achieved, but
challenging.
Relevant: Contribute to the organization’s overall mission and be
consistent with its values, including ethical standards.
Time-bound: Specify a target date for completion.
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Levels of Planning
 Top-level managers: Strategic planning
 Middle-level managers: Tactical planning
 Lower-level managers: Operational planning
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Strategic Planning
 Strategic Planning: A set of procedures for making decisions about the
organization’s long-term goals and strategies.
 Strategic goal: major targets or end results relating to the organization’s longterm survival, value and growth.
 Strategy: A pattern of actions and resource allocations designed to achieve the
organization’s goals.
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Step 1- Analyze the Situation
Situational analysis: a process planners use, within time and
resources constraints, to gather, interpret, and summarize all
information relevant to the planning issue under
consideration.
Formal Planning
Steps
Situational Analysis
Alternative Goals and Plans
Focuses on the internal forces at work in the organization and
the influences from the external environment.
Goal and Plan Evaluation
Step 2: Generate alternative goals and plans
Goal and Plan Selection
Goals: Target or end that management desires to reach.
•Stresses creativity
•Encourages managers and employees to think broadly
Implementation
Monitor and Control
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Step 3- Evaluate Goals and Plans
•Evaluate advantages, disadvantages, and potential effects of each
alternative goal and plan.
•Prioritize the goals
•Consider the costs of each initiative and the likely investment return.
Step 4: Select goals and plans
•Select the most appropriate and feasible alternative.
•Identifies the priorities and trade-offs among the goals and plans.
Step 5: Implement the goals and plans
•Key to achieving goals
•Managers and employees must understand the plan, have the
resources to implement it, and be motivated to do so.
•Linking the plan to other systems in the organization, such as
rewards, helps ensure successful implementation.
Formal Planning Steps
Situational Analysis
Alternative Goals and Plans
Goal and Plan Evaluation
Goal and Plan Selection
Implementation
Monitor and Control
Step 6: Monitor and control performance
Monitor actual performance of employees against the goals and
plans.
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Strategic Planning Process
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Step 1: Establish a mission, vision, and goals
 Mission:
 An organization’s basic purpose and scope of operations.
 Clear and concise expression of the organization’s basic purpose.
 Strategic vision:
 The long-term direction and strategic intent of a company.
 Points to the future
 Provides perspective on where the organization is headed and what it can
become
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Step 2: Analyze External opportunities and threats
 Industry profile
 Political activity
 Industry growth
 Social issues
 Industry forces
 Social interest groups
 Competitor profile
 Labor issues
 Competitor analysis
 Macroeconomic conditions
 Competitor advantages
 Technological factors
 Legislation and regulatory activities
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Step 3: Analyze Internal Strengths and Weaknesses
 Internal resource analysis
 Financial analysis
 Human resources assessment
 Marketing audit
 Operations analysis
 Other internal resource analyses
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Step 4- SWOT Analysis
Strengths
Skilled management
Positive cash flow
Well-known brands
Weakness
Lack of spare production capacity
Absence of reliable suppliers
Opportunities
New technology
Underserved market niche
Threats
Possibility of competitors entering underserved niche
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Step 5: Implement the Strategy
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Define strategic tasks.
Assess organization capabilities.
Develop an implementation agenda.
Create an implementation plan.
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Step 6: Control Your Progress
Strategic control system:
-Designed to support managers in evaluating the organization’s progress with
its strategy and, when discrepancies exist, taking corrective action.
-Encourage efficient operations that are consistent with the plan while allowing
flexibility to adapt to changing conditions.
-Includes a budget to monitor and control major financial expenditures.
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Vision Statements
 Inspire organization members
 Offer a worthwhile target for the entire organization to work together
to achieve.
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Microsoft’s Mission Statement
“We work to help people and businesses throughout the
world to realize their full potential.”
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DuPont’s Vision Statement
“To be the world’s most dynamic science company, creating sustainable
solutions essential to a better, safer and healthier life for people
everywhere.”
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Strategic goals
 Evolve from the organization’s mission and vision.
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Stakeholders
 Groups and individuals who affect and are affected by the achievement of the
organization’s mission, goals, and strategies.
 Buyers, suppliers, competitors, government and regulatory agencies, unions
and employee groups, financial community, owners and shareholders, and
trade associations.
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Resources and Capabilities
 Resources: inputs to production that can be accumulated over time to
enhance the performance of a firm.
 Tangible assets – real estate, production of facilities, raw materials
 Intangible assets- company reputation, culture, technical
knowledge, and patents, accumulated learning and experience
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Resources as a Source of Competitive Advantage
 Valuable: instrumental for creating customer benefits
 Rare: not equally available to all competitors
 Inimitable: interdependent variables and no obvious links between behaviors
and desire outcomes
 Organized: efficient organization of resources
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Core Competence
 A unique skill and/or knowledge an organization possesses that gives it
an edge over competitors
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Benchmarking
 Assess and improve performance by assessing how well one company’s
basic functions and skills compare with those of another company or
set of companies.
 Thoroughly understand the “best practices” of other firms
 To undertake actions to achieve better performance and lower costs
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Business Strategy
The major actions by which an organization competes in a particular
industry or market.
-Low-cost strategy: a strategy an organization uses to build competitive
advantage by being efficient and offering a standard, no-frills product.
-Differentiation: a strategy an organization uses to build competitive
advantage by being unique in its industry or market segment along one
or more dimensions.
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