1. 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

2. © SOUTH-WESTERN EDUCATIONAL PUBLISHING PLANNING FUNCTION nImportance of planning nAll managers are involved in planning some way. nThe most important management activity. nPlans serves as guides for making decisions. nDetermines whether the business is making progress. nLevels of planning nStrategic planning- long term and provides broad goals and direction for the entire business. (Ex: Developing new product line; building a new factory) nStrategic planning provides needed information and procedures for making effective decisions. SEE NEXT SLIDE FOR STEPS nSWOT Analysis- is the examination of the organizations internal Strengths and Weaknesses as well as the Opportunities and Threats from its external environment. nMission Statement- is a short specific statement of the business’s purpose and direction. nExample of a mission statement “to provide high quality meals at reasonable prices to satisfy the tastes of our customers when and where they want them.” nTop executives are responsible for strategic planning nInformation is gathered through lower-level managers, employees, special departments, research firms, consultants, state and federal government agencies (SBA)

3. © SOUTH-WESTERN EDUCATIONAL PUBLISHING Levels of Planning (cont.) nOperational Planning – how work will be done, who will do it, and what resources will be needed to get the work done. (Short term) nExamples: developing department budgets, planning inventory levels, purchasing raw materials, preparing employee work schedules, development of promotional plans, training for salespeople, select pricing methods. nA great deal of operational planning is the responsibility of the mid-level managers, supervisors, and experienced employees.

4. © SOUTH-WESTERN EDUCATIONAL PUBLISHING Step 5: Strategies -managers identify The efforts expected from each area of the firm if Goals are to be achieved. Step 4: Goals -managers develop outcomes For the firm to achieve that fit within the mission. Step 3: Mission -managers agree on the most Important purposes or directions for the firm based on the Information collected. Step 2: Internal Analysis -factors inside the Firm that can affect success: operations, finances, personnel, Other resources. Step 1: External Analysis -factors outside the firm That can affect effective operations: customers, competitors, economy Government. STRATEGIC PLANNING STEPS

5. © SOUTH-WESTERN EDUCATIONAL PUBLISHING PLANNING TOOLS nGoals - Characteristics of effective goals nMust be specific and meaningful (make a profit) nMust be achievable and realistic nShould be clearly communicated nShould be consistent with each other and with overall company goals nBudgets - specific financial plan. Most widely used planning tool. nSchedules - identify tasks to be completed by a department or individual and the approximate time required to complete each task. nStandards - specific measure against which something is judged. (EX: 3 minutes or less fast food restaurant; number of defective products allowed on assembly line; number of calls salespeople must make during a day) nPolicies - a general rule followed by the entire business. (EX: work rules; bi- annually evaluations) nProcedures - improve business efficiency and are of special help to employees who are learning a new job. nResearch - used to collect data for managers and to provide the information needed to improve their planning decisions.

6. © SOUTH-WESTERN EDUCATIONAL PUBLISHING ORGANIZING FUNCTION - involves arranging resources and relationships between departments and employees and defining the responsibility each has for accomplishing work. nRole of organization charts -purpose of organization charts are to1) show the departments that make up the business; 2) indicate each employee’s dept. and to whom each person reports; and 3) identify lines of authority and formal communication within the organization. nElements of organization - process of organizing involves three elements: 1) division of work; 2) facilities and working conditions, and 3) employees. nDivision of work- dividing work into departments. Based on the type of work and the amount of work to be done. Work should flow between departments and not be delayed for the next department. nFacilities and Working Conditions - Physical aspects including providing necessary equipment and materials must be supplied to employees to complete their work. (Computer ordering systems, tools, etc.). Ergonomics (lighting, temperature, ventilation, cafeterias, break rooms) nEmployees- successful matching of the employee and the work they are prepared to do most efficiently. Also, consider work that is enjoyable and less desirable and rotate those less desired jobs and tasks.

7. © SOUTH-WESTERN EDUCATIONAL PUBLISHING CHARACTERISTICS OF GOOD ORGANIZATION nResponsibility and Authority- one of the biggest mistakes is to assign responsibilities to employees without giving them sufficient authority to carry out those responsibilities. nEach employee and each manager should know specifically: 1.The description and duties of each job 2.What authority accompanies the job 3.The manager in charge 4.Who reports to the manager 5.What is considered satisfactory performance A growing practice in many organizations is employee empowerment. Empowered employees need to be well trained and be effective problem solvers. They need to have confidence that their managers will support their decisions. Some companies are reluctant to buy into this because they think that managers will lose control of the organization. Experience has shown that empowerment increases employee morale, produces more satisfied customers and fewer reported problems, and increases work efficiency.

8. © SOUTH-WESTERN EDUCATIONAL PUBLISHING Accountability nWhile the manager is ultimately responsible for the work, the employee is accountable to the manager for performing the assigned work properly, including the quality, quantity, and completion time. nManagers evaluate employees’ work by comparing it to the established goals and work standards. nEach employee is accountable for achieving the quality and quantity defined by the goals and standards. nManagers need to communicate those goals and standards to the employee when assigning the work and then use those same goals and standards when evaluating the employees’ work. Unity Of Command nNo employee reports to more than one supervisor at a time nConfusion and poor work relations result when a person has work assigned by and is accountable to more than one supervisor nWork teams face this problem and need to be aware of who is in charge Span of Control nThe number of employees that any manager supervises directly nThe manager who supervises too many people is overworked and unable to perform all duties effectively. nSpan of control is larger at lower levels than at the higher levels. nEX: Head nurse in charge of a floor unit in a hospital may supervise 15 or more employees, while only 3 vice-presidents report to the chief executive of the hospital. nWell trained and motivated employees do not require as much direct supervision thus they can reduce the number of managers due to the fact that the employees were involved in planning and decision making processes.

9. © SOUTH-WESTERN EDUCATIONAL PUBLISHING ORGANIZATION CHART Delivery Service and Repairs Advertising and Promotion Mgr. Customer Service Manager Sales Manager VP Purchasing VP Merchandising VP Finance General Manager