Planning and Organizing Chapter 4

The Planning Function Business Plan – a written description of the nature of the business, its goals, and objectives, and how they will be achieved. Includes: ◦Analyzing the opportunities and risks ◦Potential profitability resulting from planned operations.

Strategic Planning – planning over a long period of time. Ex)new product line, new factory. Provides the needed information and procedures for making effective decisions about the direction and goals of a business. The Planning Function

Internal and External Analysis – often referred to as S.W.O.T. ANALYSIS (strengths, weaknesses, opportunities, and threats). ◦External analysis - factors outside the firm that can affect effective operations: customers, competitors, the economy, and government. ◦Internal analysis - factors inside the firm that can affect success: operations, finances, personnel, and other resources. ◦Step 1 – External Analysis  managers identify any opportunities for expanding and improving the business, as well as any threats from competition, government changes etc. ◦Step 2 – Internal Analysis  managers evaluate the organizations own capabilities and determine strengths, and weaknesses. ◦Step 3 – Mission - m The Planning Function

Internal and External Analysis – often referred to as S.W.O.T. ANALYSIS (strengths, weaknesses, opportunities, and threats). ◦Step 3 – Mission  Managers agree on the most important purpose or direction for the firm based on the information collected. ◦Step 4 – Goals  Managers develop outcomes for the business to achieve that fit within the mission. ◦Step 5 – Strategies  Managers identify the efforts expected from each area of the firm if goals are to be achieved. The Planning Function

Strategic Planning ◦Mission statement - a short specific statement about the businesses purpose and direction. It usually flows out of a broad, long term, inspirational vision. THE COMPANY’S REASON FOR EXISTING. ◦EXAMPLE – “ To Conveniently provide memorable meals from unique recipes to satisfy the tastes of our customers no matter where or when they want them.” The Planning Function

Operational Planning – determines how work will be done., who will do it, and what resources will be needed to get the work done in each area.

The Organizing Function The Role of an Organizational Chart - an illustration of the structure of an organization, major job classifications, and the reporting relationships among the organization’s personnel. Organizational Chart Purpose - 1. Show major work units 2. Allow employees to identify which unit they are affiliated with and how it relates to other units, and to whom they are accountable 3. Identify lines of authority and formal communication

The Organizing Function The Role of an Organizational Chart - an illustration of the structure of an organization, major job classifications, and the reporting relationships among the organization’s personnel. Organizational Chart Purpose - 1. Show major work units 2. Allow employees to identify which unit they are affiliated with and how it relates to other units, and to whom they are accountable 3. Identify lines of authority and formal communication

Using Planning Tools 4.2

Goal – is a specific statement of a result the business expects to achieve. They keep the business focused on where it wants to be in the future and the results it expects to accomplish. Characteristics of effective Goals ◦Goals must be meaningful ◦Step 4 – Goals  Managers develop outcomes for the business to achieve that fit within the mission. ◦Step 5 – Strategies  Managers identify the efforts expected from each area of the firm if goals are to be achieved. The Planning Function