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 All of the other management functions stem from planning  How do you plan for an undefined future?  No plan is perfect  Without plans and goals, organizations flounder 2

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 A goal is a desired future state that the organization attempts to realize A plan is a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions PLANNING

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 Organizational mission – the organization’s reason for existence  Strategic goals – official goals, broad statements describing the organization’s future  Strategic plans – define the action steps the company will take  Goals should be aligned using a strategy map 5

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Source: Holstee Website, copyright 2011

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Direct employees and resources  Guide toward efficient and effective performance  Includes planning approaches:  Management-by-Objectives (MBO)  Single-Use Plans  Standing Plans 7

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8

 Defined in 1954 by Peter Drucker  Method for defining goals and monitoring performance 9

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Single-Use Plans  Achieve one-time goals  Programs and projects Standing Plans  Ongoing plans  Policies, rules, procedures 11

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Single-Use Plans  Program: building new headquarters, converting paper files to digital  Project: renovating the office, setting up a new company intranet 12

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Standing Plans  Policy: Sexual harassment policies, Internet and social media policies  Rule: No eating rule in areas of company where employees are visible to public  Procedure: Procedures for issuing refunds, Procedures for handling employee grievances 13

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Goals and plans provide a source of motivation and commitment Goals and plans guide resource allocation Goals and plans are a guide to action Goals and plans set a standard of performance Goals and plans can create a false sense of certainty Goals and plans may cause rigidity in a turbulent environment Goals and plans can get in the way of intuition and creativity 14

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Contingency Planning  Planning for emergencies, setbacks, or unexpected conditions  Building Scenarios  A forecasting technique to look at current trends and discontinuities and visualize future possibilities  Crisis Planning  Unexpected events that are sudden and devastating 15

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Stretch goals are highly ambitious  Clear, compelling, and imaginative  Require innovation  Goals must be seen as achievable  Like Big Hairy Audacious Goal (BHAG) from 1996 article on “Building Your Company’s Vision”  As times move faster and become more turbulent, these are important 17

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Every company is concerned with strategy  It determines which organizations succeed and which ones struggle  Strategic blunders can hurt a company  Strategic management is a specific type of planning

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  The long-term view of the organization and competition  Thinking strategically impacts performance and financial success  Today’s environment requires everyone to think strategically

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Decisions and actions used to formulate and execute strategies that will provide competitively superior fit between the organization and its environment to achieve organizational goals

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Explicit strategy is the plan of action  Competitive advantage is the organization’s distinctive edge for meeting customer needs Strategies should :  Exploit Core Competencies  Build Synergy  Deliver Value  Target Customers

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 Formulating strategy often begins with an audit of internal and external factors  Internal S trengths and W eaknesses  External O pportunities and T hreats  Information is acquired from reports, surveys, discussions, and meetings

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 Organizes business along two dimensions  Business growth rate  Market share  Four categories for corporate portfolio  The combination of high/low market share and high/low business growth

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 Strategy within the business units: How do we compete?  Business-level strategies are developed by Porter’s Five Forces  Web technology is impacting all industries in positive and negative ways

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