Planning Tools and Techniques Appendix B B–1

Assessing the Environment  Environmental Scanning  The screening of large amounts of information to anticipate and interpret change in the environment.  Competitor Intelligence  The process of gathering information about competitors—who they are; what they are doing  Is not spying but rather careful attention to readily accessible information from employees, customers, suppliers, the Internet, and competitors themselves.  May involve reverse engineering of competing products to discover technical innovations. B–2

Assessing the Environment (cont’d)  Forecasting  The part of organizational planning that involves creating predictions of outcomes based on information gathered by environmental scanning.  Facilitates managerial decision making.  Is most accurate in stable environments. B–3

Assessing the Environment (cont’d)  Forecasting Techniques  Quantitative forecasting  Applying a set of mathematical rules to a series of hard data to predict outcomes (e.g., units to be produced).  Qualitative forecasting  Using expert judgments and opinions to predict less than precise outcomes (e.g., direction of the economy).  Collaborative Planning, Forecasting, and Replenishment (CPFR) Software  A standardized way for organizations to use the Internet to exchange data. B–4

Exhibit B–1Forecasting Techniques B–5 Quantitative Time series analysis Regression models Econometric models Economic indicators Substitution effect Qualitative Jury of opinion Sales force composition Customer evaluation

Benchmarking  The search for the best practices among competitors and noncompetitors that lead to their superior performance.  By analyzing and copying these practices, firms can improve their performance. B–6

Allocating Resources  Types of Resources  The assets of the organization  Financial:  Physical  Human:  Intangible: B–7

Allocating Resources: Budgeting  Budgets  Are numerical plans for allocating resources (e.g., revenues, expenses, and capital expenditures).  Are used to improve time, space, and use of material resources.  Are the most commonly used and most widely applicable planning technique for organizations. B–8

Allocating Resources: Scheduling  Schedules  Plans that allocate resources by detailing what activities have to be done, the order in which they are to be completed, who is to do each, and when they are to be completed.  Represent the coordination of various activities. B–9

Allocating Resources: Charting  Gantt Chart  A bar graph with time on the horizontal axis and activities to be accomplished on the vertical axis.  Shows the expected and actual progress of various tasks.  Example: Training Design B–10

Exhibit B–5A Gantt Chart B–11

Allocating Resources: Analysis  Program Evaluation and Review Technique (PERT)  A flow chart diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity.  Events: endpoints for completion.  Activities: time required for each activity.  Slack time: the time that a completed activity waits for another activity to finish so that the next activity, which depends on the completion of both activities, can start.  Critical path: the path (ordering) of activities that allows all tasks to be completed with the least slack time. B–12

Baking a Cake – 2 persons B–13 1.Gather all ingredients (eggs,sugar, flour, oil)(1 minutes) 2.beat oil and sugar with eggs for 5 minutes 3. Mix sugar, oil and egg mixture with flour 1 minute 4.Clean the pan 1 minutes 5.Pre heat the oven for 10 minutes 6.Bake it for 30 minutes 7.Prepare the frosting (20 Minutes) 8.Waiting for cake to cool down (10 minutes) 9.Put frosting in nozzle (2 minutes) 10.Apply frosting (5) minutes 11.Clean (20 minutes) 12.Beat three eggs for 3 minutes

Allocating Resources: Analysis (cont’d)  Breakeven Analysis  Is used to determine the point at which all fixed costs have been recovered and profitability begins.  Fixed cost (FC)  Variable costs (VC)  Total Fixed Costs (TFC)  Price (P)  The Break-even Formula: B–14

Exhibit B–10Breakeven Analysis B–15

Linear Programming (for your interest only) B–16

Contemporary Planning Techniques  Project  A one-time-only set of activities that has a definite beginning and ending point time.  Project Management  The task of getting a project’s activities done on time, within budget, and according to specifications.  Define project goals  Identify all required activities, materials, and labor  Determine the sequence of completion B–17

CSR and Managerial Ethics B–18

From Obligation to Responsiveness to Responsibility  Social Obligation  The obligation of a business to meet its economic and legal responsibilities and nothing more.  Social Responsiveness  When a firm engages in social actions in response to some popular social need.  Social Responsibility  A business’s intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society. 5–19

B–20

Exhibit 5–2 Arguments For and Against Social Responsibility 5–21 ForFor  Public expectations  Long-run profits  Ethical obligation  Public image  Better environment  Discouragement of further governmental regulation  Balance of responsibility and power  Stockholder interests  Possession of resources  Superiority of prevention over cures AgainstAgainst  Violation of profit maximization  Dilution of purpose  Costs  Too much power  Lack of skills  Lack of accountability

How Organizations Go Green  Legal (or Light Green) Approach  Firms simply do what is legally required by obeying laws, rules, and regulations willingly and without legal challenge.  Market Approach  Firms respond to the preferences of their customers for environmentally friendly products.  Stakeholder Approach  Firms work to meet the environmental demands of multiple stakeholders—employees, suppliers, and the community.  Activist Approach  Firms look for ways to respect and preserve environment and be actively socially responsible. 5–22

Exhibit 5–4 Green Approaches 5–23