© SOUTH-WESTERN EDUCATIONAL PUBLISHING Business Principles and Management Planning and Organizing Chapter 13 Mr. Kretschmer

CHAPTER OBJECTIVES © SOUTH-WESTERN EDUCATIONAL PUBLISHING PLANNING AND ORGANIZING nJustify the value of planning for a business. nDifferentiate between the two levels of planning. nProvide examples of seven planning tools used by managers. nIdentify four characteristics of a good organization. nDefine two traditional types and two newer types of organization structure. 1313

© SOUTH-WESTERN EDUCATIONAL PUBLISHING PLANNING FUNCTION nHow important is planning? What type of plans do you make? nMost business failures are a result of poor planning. nPlanning is the most important management activity. nLevels of planning = 2 Levels nStrategic planning nOperational planning nPlanning tools = What type of tools help managers plan?

© SOUTH-WESTERN EDUCATIONAL PUBLISHING PLANNING TOOLS nGoals nBudgets nSchedules nStandards nPolicies nProcedures nResearch

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Strategic Planning nWhat is strategic planning? nHHS Administration Goals and Objectives nList some business activities that would require strategic planning nStarting a new business nMoving to another location nExpanding nNew Factory nAny others?

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Step 5: Strategies Step 4: Goals Step 3: Mission Step 2: Internal Analysis Step 1: External Analysis STRATEGIC PLANNING STEPS

© SOUTH-WESTERN EDUCATIONAL PUBLISHING SWOT ANAYLSIS S = STRENGTHS W = WEAKNESSES O = OPPORTUNITIES T = THREATS Examples: Changes in the economy, new laws or regulations that would affect your business. nA short, specific statement of the purpose and direction of a business is a Mission Statement

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Operational Planning nExamples of Operational Planning: nDepartment Budgets nInventory Levels nPurchasing of raw materials nGoals keep a business focused on where it wants to be in the future and the results it expects to accomplish.

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Effective Goals Key Characteristics of Effective Goals: 1.Goals must be specific/meaningful 2.Goals must be achievable 3.Goals should be clearly communicated 4.Goals should be consistent with each other and with overall company goals Managers must work together so that their goals will complement each other and support the overall company goals

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Operational Planning nMost widely planning tool is a budget nSchedules are used in planning the most effective time use nBusinesses set quality standards for the goods and services they produce. nA policy is often a general rule to be followed by the entire business or by specific departments. (HHS Student Handbook)

© SOUTH-WESTERN EDUCATIONAL PUBLISHING ORGANIZING FUNCTION nFigure 13-3 in your textbook = Page 330 nWhat departments are involved in developing a new product? nResearch, manufacturing, human resources, sales, advertising, finance. nPurposes of organization charts 1.Show the departments that make up a business 2.Indicate each employees department and whom they report 3.Identify lines of authority and formal communications within the organization nElements of organization nDivisions of work: Production, marketing, and finance divisions

© SOUTH-WESTERN EDUCATIONAL PUBLISHING ORGANIZATIONAL CHARTS PAGE 334 Delivery Service and Repairs Advertising and Promotion Mgr. Customer Service Manager Sales Manager VP Purchasing VP Merchandising VP Finance General Manager

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Organization Structure nA small retailer may divide its work into the following departments: nPurchasing, merchandising, operations nHow would you redesign Honesdale High School to make the educational process more efficient? Explain.

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Responsibility Vs. Authority What is the difference between responsibility and authority? One of the greatest mistakes that a company can make is to assign responsibilities to employees without giving them sufficient authority.

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Empowerment Three traits of an empowered employee: 1.Accountability – Accept responsibility 2.Unity of Command – No employee reports to more than one supervisor at a time 3.Span of Control – Number of employees that a supervisor manages directly

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Organizational Structure Line Organization Advantages Vs. Disadvantages Line and Staff Organization Advantages Vs. Disadvantages Matrix Organization Advantages Vs. Disadvantages Team Organization Advantages Vs. Disadvantages

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Team Ingredients nWhat three ingredients must team members be competent in for a team be successful? nDo you think that a centralized, decentralized or flattened organizational structure is best for an organization and why? Explain.

© SOUTH-WESTERN EDUCATIONAL PUBLISHING Any Questions?