The Foundations
of Planning
©Prentice Hall, 2001
Chapter 3
1
Learning Objectives
• Define planning
• Explain the potential benefits of planning
• Identify the potential drawbacks of planning
• Compare strategic and tactical plans
• Compare directional and specific plans
©Prentice Hall, 2001
Chapter 3
2
Learning Objectives
• Discuss Management by Objectives
• Outline the strategic management process
• Describe the four grand strategies
• Explain SWOT analysis
• Learn how entrepreneurs and bureaucratic
managers approach strategy
©Prentice Hall, 2001
Chapter 3
3
Set Control
Standards
Provide
Direction
Reasons
for Planning
Minimize Waste
or Redundancy
©Prentice Hall, 2001
Reduce the
Impact of Change
Chapter 3
4
Rigid Assumptions
of Stability
Environmental
Turbulence
Arguments
Against
Strategic
Planning
Intuition
and Creativity
Focus on Today’s
Competition
Preoccupation with
Current Success
©Prentice Hall, 2001
Chapter 3
5
Does Planning Improve
Performance?
• Financial results
• Environmental concerns
• Quality and implementation
©Prentice Hall, 2001
Chapter 3
6
How Do Strategic and
Tactical Plans Differ?
Time Frame
©Prentice Hall, 2001
Scope
Chapter 3
Objectives
7
The Time Frame
of Planning
Short-Term
Plans
©Prentice Hall, 2001
Long-Term
Plans
Chapter 3
8
Specific Plans
Low
General
Directional Plans
High
Flexibility
Objectives
Clear
©Prentice Hall, 2001
Chapter 3
9
Single-Use
and Standing Plans
Unique
Situations
©Prentice Hall, 2001
Ongoing
Operations
Chapter 3
10
What Is Management by Objectives?
Organizational
Objectives
Divisional
Objectives
Departmental
Objectives
Individual
Objectives
©Prentice Hall, 2001
Chapter 3
11
Common MBO Elements
Goal
Specificity
Participative
Decision Making
Explicit
Time Period
Performance
Feedback
©Prentice Hall, 2001
Chapter 3
12
Goal
Difficulty
Goal
Specificity
Does MBO
Work?
Top
Management
©Prentice Hall, 2001
Participation
Chapter 3
13
Setting Employee Objectives
• Identify key job tasks
• Set specific hard goals
• Let employees participate
• Prioritize goals
• Build in feedback
• Reward goal attainment
©Prentice Hall, 2001
Chapter 3
14
The Downside of Objectives
Quality of
Products
Quantity of
Products
Individual
Effort
Team Focus
Potential
Improvement
Continuous
Improvement
©Prentice Hall, 2001
Chapter 3
15
The Strategic Management Process
Set Mission,
Objectives,
and Strategies
Analyze the
Environment
Identify
Opportunities
and Threats
Analyze
Resources
Identify
Strengths and
Weaknesses
Reassess
Mission and
Objectives
Formulate
Strategies
Implement
Strategies
Evaluate
Results
©Prentice Hall, 2001
Chapter 3
16
Starting the Strategic
Management Process
Mission
©Prentice Hall, 2001
Objectives Strategies
Chapter 3
17
Analyzing the
Environment
Environmental
Scanning
Competitive
Intelligence
©Prentice Hall, 2001
Chapter 3
18
Strengths
Threats
SWOT
Analysis
Weaknesses
Opportunities
©Prentice Hall, 2001
Chapter 3
19
Identifying Opportunities
Organization’s
Resources
Opportunities in
the Environment
Organization’s
Opportunities
©Prentice Hall, 2001
Chapter 3
20
Growth
Stability
The Grand Strategies
Combination
©Prentice Hall, 2001
Retrenchment
Chapter 3
21
Determining A
Competitive Strategy
Cost
Leadership
Differentiation
Focus
©Prentice Hall, 2001
Chapter 3
22
What Happens
After Strategies
Are Formulated?
Implementation
Evaluation
©Prentice Hall, 2001
Chapter 3
23
Benchmarking
Quality As
A Strategic
Weapon
ISO 9000
Six Sigma
©Prentice Hall, 2001
Chapter 3
24
The Entrepreneurial
Personality
Common
Personality
Traits
©Prentice Hall, 2001
Three
Critical
Factors
Chapter 3
Other
Important
Factors
25
Comparing Entrepreneurs and
Traditional Managers
Characteristics
Managers
Entrepreneurs
• Primary Motivation
• Traditional Rewards
• Personal Rewards
• Time Orientation
• Short-Term Goals
• Long-Term Goals
• Activity
• Delegate/Supervise
• Direct Involvement
• Risk Propensity
• Low
• Moderate
• View of Failure/Errors
• Avoidance
• Acceptance
©Prentice Hall, 2001
Chapter 3
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