Management Activities Planning Organising Controlling

Planning This is the process of setting goals and objectives and deciding how to achieve them. Examples of plans include strategic (long term), tactical (short term) and contingency plans (emergency plans). Planning is vital in business. Failing to plan is like planning to fail.

Mission statement A mission statement is the overall fundamental objectives and purpose of the business, the reasons for its existence and what it sees for itself in the future. The purpose of a mission statement is to help each member of staff to stay focused on the organisations main aim. It is prepared by the board of directors. It is a short and precise statement explaining who we the business are and what they do.

Types of plans 1. Strategic plans Also known as long term plans They are developed over the long term and normally cover five years or more They are drawn up by senior management and focus on the organisations mission or purpose. They provide a guide for where the business is going in the long term and how it’s going to get there.

1. Strategic Plan contd Strategic planning requires an examination of the organisations strengths, weaknesses, opportunities and threats so that the objectives can be achieved. Examples: Achieving entrance into a new/foreign market Achieving an increase in market share Becoming a market leader

2. Tactical plans The long term plan is broken down into more manageable short term plans. Short term plans relate to a particular function of the organisation ie)advertising. They cover a period of about 1-2 years and are developed by a management team which deals with getting the work done to carry out the strategic plan. Examples Launch a new advertising campaign aiming to increase sales by 10% Open a new branch of the business Reduce employee turnover Launch a new product

Airline Example Mission : To become the biggest airline in the world. Strategic Plan : To operate 20% of all flights from Europe to the US within the next five years. Tactical Plan: To launch flights from Dublin to New York in the next 6 months

3. Contingency Plan These are special plans prepared to deal with unexpected circumstances or emergencies. Most well managed firms have contingency plans ready to deal with unexpected situations such as: A breakdown in production A disruption in supply of essential raw materials. Bankruptcy or bad debt of a large customer Quality control errors requiring the recall of faulty goods already sold

4. Operational Plan This is a short-term plan for a specific event. To organise an event like a concert. To recruit more staff within one month for Christmas

The steps in the planning process Carry out a SWOT analysis to analyse the present situation. Set objectives Devise strategies Implement plan Review

What are the stages in the planning process? Step 1 Analyse the situation-where are we now Step 2 Identify the goal-where do we want to be Step 3 Draft a plan-how will we get there? Step 4 Implement it-Do it. Step 5 Review it- Are we there yet 1.Decreasing sales 2.Increase by 10% 3.Improve product Quality, launch advertising campaign 4.Design add for TV,radio 5.Monitor any changes in sales to see if plan worked

What are the stages in the planning process? Step 1 Analyse the situation-where am I now Step 2 Identify the goal-where do I want to be Step 3 Draft a plan-how will I get there Step 4 Implement it-Do it Step 5 Review it-Am I there yet Sitting in Ballinasloe@7am Arrive in Passport Office in Dublin @12pm Take the 8.30 am train to Dublin Buy ticket & board train Passport Office in sight???

Step 1-Ananlyse the situation The first step in planning is to analyse the situation facing the business. This done by carrying out a SWOT analysis. This involves identifying the strengths, weaknesses, opportunities and threats. The aim of a swot analysis is to maximise the potential strengths and opportunities while minimising the impact of threats.

Strengths Strengths – the things the company are good at or important assets that give the company a competitive advantage. A firm should take advantage of these Examples: Location experienced/skilled staff experienced management loyal customers brand name Quality product Adequate cash flow

Weaknesses Theses are the things that the business lacks or things that make it difficult for the business to achieve its objectives or puts it at a competitive disadvantage to other firms. Weaknesses should be tried to be fixed/remedied as quickly as possible. Examples poorly trained staff poor public image industrial relation issues Weak credit control Lack of capital Costs too high Lack of experience

Opportunities These are the things the business can take advantage of in the future. They offer the possibility of assisting or expanding the business and should be exploited as soon as possible. Examples To export To enter new markets to expand To reorganise the factory To introduce new uses for product

Threats These could undermine the well being and profitability of the firm. They prevent the firm achieving its objectives and may pose problems in the future. The business should be defended against as soon as possible. Examples include New competitors Rules and regulations Bankruptcy Takeovers Rising wage/insurance costs

Step 2: Set Objectives The business should use the results of the SWOT analyses to help set its objectives. (i.e. they will try to strengthen/remedy their weakness and exploit their opportunities and defend against their threats.) Objectives are goals the business wants to achieve. i.e. An Aer Lingus SWOT analysis revealed a major weakness that its costs were too high and it was losing money. A major threat was competition from Ryanair. It then set itself the objectives of cutting costs and becoming a low fare airline.

Step 3: Devise Strategies Once the objectives are set the business now must come up with strategies to achieve the goals. E.g.) Aer Lingus came up with the strategy of making 2000 employees redundant in order to achieve its goal of cutting costs. Three Basic Strategies Low Cost Leadership Ryanair, Lidl Differentiation ….. Use branding Niche strategy…luxury niche, Ferrari.

Step 4: Implement the Plan The plan must be put into action. The manager must break down the plan into manageable jobs and give each person in the business a job to do. It is important to communicate the plan to all employees in the organisation. This ensures that the employees back the plan and try and make it work. HW Page 127 No 4 (blue section/top of page)

The Qualities of a Good Plan “S M A R T” Specific Measurable Agreed Realistic Timed

SMART Specific- they must be clear and precisely expressed/quantifiable Measurable-the success of the plan should be easily measured Agreed the plan must be agreed by all the management team Realistic- the plan must be capable of being achieved with the resources (human, financial and physical) available Timed-there must be a timescale for achieving the objectives

Advantages of Planning 1.Future focused When planning managers try to anticipate problems hat may arise or are facing the business in the future. This enables them to take necessary steps now to deal with those future problems. Eg. A man power plan 2. Planning identifies the business’s weaknesses. A SWOT analysis is conducted and this identifies the weaknesses, which helps a business to see what it does badly or things that it is lacking and then can take steps to eliminate these.

Advantages 3. Raise finance A good Business Plan will convince investors that the Business is a sound one and is likely to be successful. Good planning persuades investors to provide the business with capital. 4.Motivates staff. Plans set out objectives for the employees and managers to achieve within a given timeframe. Everyone on the business has a target and when it is reached they will be rewarded, therefore they are motivated to work hard.