The Manager as a Planner

and Strategist

chapter eight

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives

1. Identify the three main steps of the planning process and the relationship between planning and strategy.

2. Describe some techniques managers can use to improve the planning process so they can better predict the future and mobilize organizational resources to meet future contingencies.

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Learning Objectives (cont.)3. Differentiate between the main types of business-

level strategy and explain how they give an organization a competitive advantage lead to superior performance.

4. Differentiate between the main types of corporate-level strategies and explain how they are used to strengthen a company’s business-level strategy and competitive advantage

5. Describe the vital role managers play in implementing strategies to achieve an organization’s mission and goals

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Planning and Strategy

• Planning– Identifying and selecting appropriate goals and

courses of action for an organization.• The organizational plan that results from the planning

process details the goals and specifies how managers will attain those goals.

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Planning and Strategy

• Strategy– A cluster of decisions

about what goals to pursue, what actions to take, and how to use resources to achieve goals.

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Planning and Strategy

• Mission Statement– A broad declaration of an organization’s purpose

that identifies the organization’s products and customers and distinguishes the organization from its competitors.

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Example – Facebook Mission Statement

Facebook's mission is to give people the power to share and make the world

more open and connected.

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Three Steps in Planning

8-8Figure 8.1 page 297

The Nature of the Planning Process

To perform the planning task, managers:1. Establish where an organization is at the

present time2. Determine its desired future state3. Decide how to move it forward to reach that

future state

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Why Planning is Important

1. Necessary to give the organization a sense of direction and purpose

2. Useful way of getting managers to participate in decision making about the appropriate goals and strategies for an organization

3. Helps coordinate managers of the different functions and divisions of an organization

4. Can be used as a device for controlling managers

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Why Planning is Important

• Unity – at any one time only one

central, guiding plan is put into operation

• Continuity – planning is an ongoing

process in which managers build and refine previous plans and continually modify plans at all levels

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Why Planning is Important

• Accuracy – managers need to make

every attempt to collect and utilize all available information at their disposal

• Flexibility – plans can be altered and

changed if the situation changes

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Levels of Planning at General Electric

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Figure 8.2

Page 300

Levels and Types of Planning

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Figure 8.3

Page 301

Levels of Planning

• Corporate-Level Plan– Top management’s decisions pertaining to the

organization’s mission, overall strategy, and structure.

– Provides a framework for all other planning.• Corporate-Level Strategy– A plan that indicates in which industries and

national markets an organization intends to compete.

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Levels of Planning

• Business-Level Plan– Long-term divisional goals that will allow the

division to meet corporate goals– Division’s business-level and structure to achieve

divisional goals• Business-Level Strategy– Outlines the specific methods a division, business

unit, or organization will use to compete effectively against its rivals in an industry

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Levels of Planning

• Functional-Level Plan– Goals that the managers of each function will

pursue to help their division attain its business-level goals

• Functional Strategy– A plan of action that managers of individual

functions can take to add value to an organization’s goods and services

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Time Horizons of Plans

• Time Horizon– Period of time over which they are intended to

apply or endure.• Long-term plans are usually 5 years or more.• Intermediate-term plans are 1 to 5 years.• Short-term plans are less than 1 year.

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Types of Plans

• Standing Plans– used in programmed decision situations

• Policies - general guides to action• Rules - formal written specific guides to action• Standard operating procedures (SOP) - specify an

exact series of actions to follow

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Types of Plans

• Single-Use Plans– Developed to handle non-programmed decision-

making in one-of-a-kind situations• Programs: integrated plans achieving certain goals.• Project: specific action plans to complete programs.

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Scenario Planning

• Scenario Planning (Contingency Planning)– The generation of multiple forecasts of future

conditions followed by an analysis of how to effectively respond to those conditions.

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Determining the Organization’s Mission and Goals

• Defining the Business– Who are our customers?– What customer needs are being satisfied?– How are we satisfying customer needs?

• Establishing Major Goals– Provides the organization with a sense of direction

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Three Mission Statements

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Figure 8.4Page 305