Business Management, 13e
CHAPTER
4
Planning and Organizing
4.1
4.2
4.3
4.4
The Planning Function
Using Planning Tools
The Organizing Function
Developing Effective Organizations
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4.1 The Planning Function
GOALS
● Recognize the importance of planning to
business success.
● Differentiate between strategic and
operational planning.
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Why Plan?
● The value of a business plan
● A written description of the nature of the
business, its goals objectives, and how they will be
achieved.
● Includes a detailed financial analysis showing
potential profitability that should result from the
planned operation
● The importance of planning
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Elements of a Business Plan
● Nature of the business
● Goals and objectives
● Marketing plan
● Financial plan
● Organizational plan
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Checkpoint
● How is planning in a large organization similar
to assembling a jigsaw puzzle?
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Checkpoint
● How is planning in a large organization similar
to assembling a jigsaw puzzle?
● Each piece must mesh with the others around it to
create the entire puzzle.
● One missing or broken piece affects the look of
the entire puzzle.
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Levels of Planning
● Strategic planning
● Long-term and provides broad goals and direction
for entire business
● SWOT
● External and Internal factors
● Operational planning
● Short- term and identifies specific goals and
activities for each part of the business
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Checkpoint
● What is the difference between strategic and
operational planning?
● Strategic planning is long-term and provides broad
goals and direction for the entire business.
● Operational planning is short-term and identifies
specific activities for each area of the business.
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4.2 Using Planning Tools
GOALS
● Identify the characteristics of effective goals.
● Describe several business planning tools and
how they are used.
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Establishing Direction
GOALS
● Characteristics of effective goals
● Specific and meaningful
● Achievable
● Clearly communicated
● Consistent with each other and with overall
company goals
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Checkpoint
● Identify the four characteristics of effective
goals?
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Checkpoint
● Identify the four characteristics of effective
goals?
● Goals should be specific and meaningful,
achievable, clearly communicated, and consistent
with each other and with overall company goals
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Planning Tools
● Budgets
● A written financial plan for business operations
developed for a specific period of time.
● Schedules
● A time plan for reaching objectives
● Standards
● A specific measure against which something is
judged
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Planning Tools
● Policies
● Guidelines used in making decisions regarding
specific, recurring situations
● Procedures
● Sequence of steps to be followed for performing a
specific task
● Research
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Procedure for Admitting Employees
and Visitors
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Checkpoint
● What is the difference between a policy and a
standard?
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Checkpoint
● What is the difference between a policy and a
standard?
● Policies are guidelines used in making decisions
regarding specific, recurring situations.
● Standard is a specific measure against which
something is judged.
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4.3 The Organizing Function
GOALS
● Describe factors that managers should
consider when organizing work.
● Discuss how the characteristics of good
organization contribute to a more effective
work environment.
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Organizing Work
● The role of organization charts
● An illustration of the structure of an organization ,
major job classifications, and the reporting
relationships among the organization’s personnel
● The purpose of an organization chart
● Show the major work units that make up the business
● Allow employees to identify which unit they are
affiliated with.
● Identify lines of authority and formal communication
within the organization
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Organizing Work
● The process of organizing work
1. Division of work
●
●
The total work to be done must be divided into units,
such as departments.
Grouping activities in broad, natural divisions.
2. Facilities and working conditions
● The business must provide the necessary equipment
and materials for employees to be able to complete
their work.
3. Employees
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Organization Chart For Part of a Retail
Business
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Organization Chart for Ingram
Company
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Organization Chart for Ingram & Kerr
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Organization Chart for Ingram Kerr, Inc.
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Checkpoint
● What are the three elements that should be
considered when organizing work?
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Checkpoint
● What are the three elements that should be
considered when organizing work?
● The division of work
● The facilities and working conditions
● The employees
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Characteristics of Good Organization
● Responsibility and authority
● The obligation to do an assigned task
● The right to make decisions about work assignments
and to require other employees to perform assigned
tasks
● Each employee and manager should know:
1.
2.
3.
4.
5.
The description and duties of each job
What authority accompanies the job
The manager in charge
Who reports to the manager
What is considered satisfactory performance
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Characteristics of Good Organization
● Accountability
● Obligation to accept responsibility for the
outcomes of assigned tasks
● Unity of command
● No employee reports to more than one supervisor
at a time or for a particular task
● Span of control
● The number of employees that any one manager
supervises directly
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Checkpoint
● What is most likely to happen if employees are
assigned responsibility for work tasks but are
not given the needed authority?
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Checkpoint
● What is most likely to happen if employees are
assigned responsibility for work tasks but are
not given the needed authority?
● If problems occur or the employees need help,
they will be unable to resolve the problem in a
timely fashion and do not have the authority to
get others to help them.
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4.4 Developing Effective
Organizations
GOALS
● Describe the strengths and weaknesses of four
types of organizational structures.
● Make recommendations for improving
business organization.
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Types of Organizational Structures
● Line organization
● All authority and responsibility can be traced in a
direct line from top executive down to the lowest
employee level in the organization.
● Line-and-staff organization
● Managers have direct control over the units and
employees they supervise but have access to staff
specialists for assistance.
● Matrix organization
● Team organization
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Types of Organizational Structures
● Matrix organization (Project Organization)
● Organizes employees into temporary work teams
to complete specific projects
● Used successfully in research firms, advertising
agencies, and construction companies.
● Provides flexibility and allows for rapid change.
● Team organization
● Divides employees into permanent work teams.
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Line Organization
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Line-and-Staff Organization
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Checkpoint
● Who is responsible for traditional
management functions in a team
organization?
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Checkpoint
● Who is responsible for traditional
management functions in a team
organization?
● Work teams have a team leader, self-directed
work teams work together to make decisions
● They can call on a manager for help
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Improving Business Organization
● Centralized organization
● A few top mangers do all major planning and decision
making.
● Decentralized organization
● A large business is divided into smaller operating
units, and managers who head the units have almost
total responsibility and authority for operations
● Flattened organization (Flattening)
● One with fewer levels of management than traditional
structures
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Checkpoint
● How can a business organization be made
more effective?
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Checkpoint
● How can a business organization be made
more effective?
● Organizations can be decentralized and flattened
to improve communication and collaboration
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