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Module 2 Planning

Understand planning and different types of planning Understand benefits and drawbacks of planning Differentiate different strategy types Understand SWOT, BCG, and Port’s Five Forces ModelUnderstand what is meant by Management by Objectives and Six Sigma

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What is planning?

Define Organizational objectives or goals Establish an overall strategy for achieving these goals Develop a hierarchy of plans to integrate and coordinate activities

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Why do we need planning

Provide direction Reduce uncertainty Coordinate activities Reduce wastes and redundancy Reduce the impact of change Set the standards to facilitate control

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Drawbacks of planning

May create rigidity May reduce flexibility Can’t replace intuition and creativity Managers may focus on today’s competition rather than tomorrow’s survival Focusing solely on today’s success may lead to tomorrow’s failure

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Do we need planning?

Focus on the quality of planning Seek opportunities Look for weakness Focus on customers Allow flexibility Encourage creativity

Implement planning

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Categories of planning

Breath Time Frame Specificity Frequency

of Use

strategic Long-term Directional Single

Tactical Short-term Specific Standing

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Types of plans

Mission or purpose – basic function or task

For example, mission of Markham Stouffville Hospital (MSH)

To achieve excellence in the provision of health carethat is compassionate, patient and family-centred, andconsistent with the needs of Markham, Stouffville andneighboring communities. 

Fundamental to our mission is a commitment that eachvisit to Markham Stouffville Hospital will be a greatexperience.

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Types of plans (Contd.)

Objectives or goals – ends toward which activity is aim (i.e., results to be achieved)

MSH example:It is our goal that the Hospital will continue

to operate below our Expected Cost per

Weighted Case while providing high quality care

to our community.

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Types of plans (Contd.)

Strategies – outline general action and deployment of resources to attain objectives

MSH example:Strategy priorities:1. Great care and customer service2. Great place to work3. Great partner

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Types of plans (Contd.)

Policies – general statements or understandings which are officially agreed on by authority and which is used as a basis for making decisions

For example, privacy policy, vacation policy

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Types of plans (Contd.)

Procedures – establish a required method of handling future activities

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Types of plans (Contd.)

Rules – spell out specific required actions or nonactions, allowing no discretion

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Types of plans (Contd.)

Programs – a complex of goals, policies, procedures, rules, task assignments to be taken, resources to be employed, and other elements necessary to carry out a given course of action

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Types of plans (Contd.)

Budget – a statement of expected results expressed in numerical terms

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Purpose

Objectives

Strategies

Policies

Procedures

Rules

Programs

budgets

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Management by Objectives (MBO)

MBO: a system in which specific performance objectives are jointly determined by subordinates and their superiors Four key elements: goal specificity, participative decision making, an explicit time period, and performance feedback

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Benefits of MBO

Align organizational goals with individual goals Make employees feel achievement Make realistic goals Help identify problems and opportunities Push forward

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Criticism about MBO

Focus on short-term goals rather than long-term goals Lack of team spirit Danger of inflexibility Fear of punishment Overuse quantitative goals

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How to overcome drawbacks

Set up multiple goals Reward for setting difficult goals Prioritize goals Continuous monitoring Fast feedback

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The Strategic Management Process

Set Mission,Objectives,

and Strategies

FormulateStrategies

Analyze theEnvironment

Identify Opportunitiesand Threats

Analyze Resources

IdentifyStrengths andWeaknesses

ReassessMission andObjectives

ImplementStrategies

EvaluateResults

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SWOTSWOTAnalysiAnalysi

ss

WeaknessesWeaknessesThreatsThreats

OpportunitiesOpportunities

StrengthsStrengths

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Porter’s five forces model

Competitive Battleground

New Entrants

Suppliers Buyers

Substitute products or services

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Boston Consulting Group (BCG) analysis

High

Low

Market Growth

Low High

Wild cat Star

Dog Case cow

Market Share

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RetrenchmentRetrenchmentCombinationCombinationCombinationCombination

The Grand StrategiesThe Grand StrategiesThe Grand StrategiesThe Grand Strategies

StabilityStabilityStabilityStabilityGrowthGrowthGrowthGrowth

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ImplementationImplementation

EvaluationEvaluation

What HappensAfter

StrategiesAre

Formulated?

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BenchmarkingBenchmarking

Quality As Quality As A StrategicA Strategic

WeaponWeaponISO 9000ISO 9000

Six Sigma (6Six Sigma (6))

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“[Six Sigma - The Breakthrough Strategy] is the most important initiative GE has ever taken…it is part of the genetic code of our future leadership.” – Jack Welch, CEO, GE