1. Fundamentals of Management: 3-1Gao Junshan, UST Beijing The Foundations of Planning

2. Fundamentals of Management: 3-2Gao Junshan, UST Beijing Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Chapter 3 Foundations of Planning Chapter 3 Foundations of Planning Chapter 4 Foundations of Decision Making Chapter 4 Foundations of Decision Making Part 2 Planning Chapter 3 Foundations of Planning Chapter 3 Foundations of Planning

3. Fundamentals of Management: 3-3Gao Junshan, UST Beijing Chapter Guide Planning and plans –Importance of Planning –Types and classification of plans Management by Objective Strategic management process Quality as strategic weapons –Total Quality Management –Benchmarking –ISO 9000 –Six Sigma

4. Fundamentals of Management: 3-4Gao Junshan, UST Beijing Planning is to Define an organization’s goals Establish an overall strategy Develop a comprehensive hierarchy of plan Planning is to Define an organization’s goals Establish an overall strategy Develop a comprehensive hierarchy of plan Requirements for organizational structure and employees Objectives for leading and directing Standards for controlling organization’s activities Planning and plans: Importance

5. Fundamentals of Management: 3-5Gao Junshan, UST Beijing Set Control Standards Standards Reduce the Impact of Change Reduce the Impact of Change Minimize Waste or Redundancy Minimize Waste or Redundancy Provide Direction Reasons for Planning Reasons Planning and plans: Importance

6. Fundamentals of Management: 3-6Gao Junshan, UST Beijing ArgumentsAgainstFormalPlanning Rigid Assumptions of Stability Intuition and Creativity EnvironmentalTurbulence Focus on Today’s Competition Preoccupation with Current Success Planning and plans: Importance

7. Fundamentals of Management: 3-7Gao Junshan, UST Beijing Does Planning Improve Performance? Positive financial results Process of making and implementing means more Poor performance due to environmental factors Planning and plans: Importance

8. Fundamentals of Management: 3-8Gao Junshan, UST Beijing Time Specificity Breadth Frequency Type of plans Criteria of Classification Classification Planning and plans: Types and classification

9. Fundamentals of Management: 3-9Gao Junshan, UST Beijing Objectives Time Frame Scope How Do Strategic and Tactical Plans Differ? Planning and plans: Types and classification

10. Fundamentals of Management: 3-10Gao Junshan, UST Beijing The Time Frame of Planning Short-TermPlansLong-TermPlans Planning and plans: Types and classification

11. Fundamentals of Management: 3-11Gao Junshan, UST Beijing Specific Plans Directional Plans Clear General Low High Flexibility Objectives Planning and plans: Types and classification

12. Fundamentals of Management: 3-12Gao Junshan, UST Beijing Single-Use and Standing Plans UniqueSituationsOngoingOperations Planning and plans: Types and classification

13. Fundamentals of Management: 3-13Gao Junshan, UST Beijing A system in which specific performance objectives are jointly determined by subordinates and their supervisors, progress towards objectives is periodically reviewed and rewards are allocated on the basis of that progress. Management by Objectives

14. Fundamentals of Management: 3-14Gao Junshan, UST Beijing OrganizationalObjectives DivisionalObjectives DepartmentalObjectives IndividualObjectives Cascading of Objectives MBO: Hierarchy of objective

15. Fundamentals of Management: 3-15Gao Junshan, UST Beijing Common MBO Elements GoalSpecificity Explicit Time Period Participative Decision Making PerformanceFeedback MBO: Basic ingredients

16. Fundamentals of Management: 3-16Gao Junshan, UST Beijing GoalDifficulty Does MBO Work? Does MBO Work? GoalSpecificity TopManagement?Participation MBO: Succeed factors

17. Fundamentals of Management: 3-17Gao Junshan, UST Beijing Setting Employee Objectives Identify key job tasks Set specific hard goals Let employees participate Prioritize goals Build in feedback Reward goal attainment Management skills: Setting objectives

18. Fundamentals of Management: 3-18Gao Junshan, UST Beijing The Downside of Objectives Quality of Products Quantity of Products IndividualEffort Team Focus PotentialImprovementContinuousImprovement MBO: Its downside

19. Fundamentals of Management: 3-19Gao Junshan, UST Beijing The Strategic Management Process Identify the organization‘s current mission, objectives, and strategies Analyze the organization‘s resources Analyze the environment Identify opportunities and threats Identify strengths and weaknesses Formulate strategies Reassess the organization’s mission and objectives Implement strategies Evaluate results 1 2 4 3 5 6789 Strategic management process: Primary steps

20. Fundamentals of Management: 3-20Gao Junshan, UST Beijing Defining the Organization’s reason for existence Important for profit and non-profit organizations Bases for development of all subsequent Plans Answering what businesses the organization are in Organizational Mission Strategic management process: Starting point

21. Fundamentals of Management: 3-21Gao Junshan, UST Beijing CompetitiveIntelligenceCompetitiveIntelligence EnvironmentalScanningEnvironmentalScanning Analyzing the Environment Analyzing the Environment Strategic management process: Environment analysis

22. Fundamentals of Management: 3-22Gao Junshan, UST Beijing Screening large amount of information to detect emerging trends and create a set of scenarios. Information can be collected through newspapers, magazines, books, trade journals, advertisements, press releases, promotional materials, trade shows, sales personals, competitor’s products, industry studies, government papers and from WWW. Environmental Scanning Strategic management process: Environment analysis

23. Fundamentals of Management: 3-23Gao Junshan, UST Beijing To seek basic information about competitors: –Who are they? –What are they doing? –How will they affect us? Most of the competitor-related information can be obtained from public accessible channel ----Competitive Intelligence is not organizational espionage Competitive Intelligence Strategic management process: Environment analysis

24. Fundamentals of Management: 3-24Gao Junshan, UST Beijing SWOTAnalysis OpportunitiesWeakness Threats Strengths Strategic management process: Identify SWOT

25. Fundamentals of Management: 3-25Gao Junshan, UST Beijing Identifying Opportunities Opportunities in the Environment Opportunities in the Environment Organization’s Resources Organization’s Resources Organization’s Opportunities Strategic management process: Matching SWOT

26. Fundamentals of Management: 3-26Gao Junshan, UST Beijing Retrenchment CombinationCombination The Grand Strategies StabilityStabilityGrowthGrowth Strategic management process: Strategies for whole

27. Fundamentals of Management: 3-27Gao Junshan, UST Beijing Determining A Competitive Strategy DifferentiationDifferentiation CostLeadershipCostLeadership FocusFocus Strategic management process: Strategies for businesses

28. Fundamentals of Management: 3-28Gao Junshan, UST Beijing Strategic management process:Implementation and evaluation Implementation Evaluation What Happens After Strategies Are Formulated?

29. Fundamentals of Management: 3-29Gao Junshan, UST Beijing Quality As A Strategic Weapon Benchmarking ISO 9000 Six Sigma TQM Quality weapons

30. Fundamentals of Management: 3-30Gao Junshan, UST Beijing Stew Leonard’s 2 Business Rules Rule 1 The customer is always right Rule 2 If customer ever wrong, reread Rule 1 Quality weapons: TQM (see Chap 2 p63)

31. Fundamentals of Management: 3-31Gao Junshan, UST Beijing Advocated by Deming and his followers Now a philosophy of management driven by customer needs and expectations The term customer has expends beyond the traditional definition To create an organization committed to continuous improvement (kaizen ) Quality weapons: TQM (see Chap 2) Total Quality Management

32. Fundamentals of Management: 3-32Gao Junshan, UST Beijing Continuous improvement Employee empowerment Accurate measurement Customer focus Overall quality Quality weapons: TQM (see Chap 2) Components of TQM

33. Fundamentals of Management: 3-33Gao Junshan, UST Beijing P D C A A P C D P D C A A P C D A P C D The PDCA Cycle and Continuous Improvement Quality weapons: TQM (see Chap 14 p452)

34. Fundamentals of Management: 3-34Gao Junshan, UST Beijing Steps of Benchmarking Form a team Identify gaps Collect data Plan and act Quality weapons: Benchmarking

35. Fundamentals of Management: 3-35Gao Junshan, UST Beijing Honestly analyze a company’s current procedures and determine the areas to improve Carefully select competitors worthy of copying Design practical implementation measures and keep continuous improvements Quality weapons: Benchmarking Keys to Successful Benchmarking

36. Fundamentals of Management: 3-36Gao Junshan, UST Beijing It is a series of standards designed by the International Standard Organization based in Geneva, Switzerland It assures the customers that a company –Uses specific steps to test the product it sells –Continuously trains its employees –Maintains satisfactory records of its operations –Corrects problems when they occur Its certification shows an organization has met stringent international quality of standards and is becoming a dominant customer need in the global village What is ISO 9000 Series Quality weapons: ISO 9000

37. Fundamentals of Management: 3-37Gao Junshan, UST Beijing Statistical target of Six Sigma Statistical target of Six Sigma Fewer than 4 defects per million item produced Six Sigma as a philosophy Six Sigma as a philosophy Design, measure, analyze and control the input side of a production process Quality weapons: Six sigma

38. Fundamentals of Management: 3-38Gao Junshan, UST Beijing 12 Steps to 6 Sigma Select the critical-to-quality characteristics Define the required performance standards Validate measurement system, methods and procedures Define up and lower performance limits Identify Sources of variation Screen potential courses of variation to identify the vital few variables needing control Quality weapons: Six sigma

39. Fundamentals of Management: 3-39Gao Junshan, UST Beijing 12 Steps of 6 Sigma Find variation relationship for the vital variables Establish operating tolerances on each of the vital variables Validate measurement system’s ability to produce repeatable data Determine the capability of the process to control the vital variables Implement statistical process control on the vital variables Quality weapons: Six sigma

40. Fundamentals of Management: 3-40Gao Junshan, UST Beijing Chapter Summary Meaning of planning Potential benefits of planning Potential drawbacks of planning Strategic vs. tactical plans Directional vs. specific plans

41. Fundamentals of Management: 3-41Gao Junshan, UST Beijing Chapter Summary Management by Objectives Strategic management process Four grand strategies SWOT analysis Explain why organizations focus on quality and continuous improvement

42. Fundamentals of Management: 3-42Gao Junshan, UST Beijing The Entrepreneurial Personality OtherImportantFactorsThreeCriticalFactorsCommonPersonalityTraits

43. Fundamentals of Management: 3-43Gao Junshan, UST Beijing Comparing Entrepreneurs and Traditional Managers Traditional Rewards Short-Term Goals Delegate/Supervise Low Avoidance Primary Motivation Time Orientation Activity Risk Propensity View of Failure/Errors Personal Rewards Long-Term Goals Direct Involvement Moderate Acceptance EntrepreneursManagersCharacteristics

44. Fundamentals of Management: 3-44Gao Junshan, UST Beijing Writing a Business Plan Describe your company’s background and purpose Identify your short and long term objectives Provide a thorough market analysis Describe your development and production emphasis Describe how you’ll market your product or service Establish your financial statements Provide an overview of the organization and its management Describe the legal form of the business Identify the critical risks and contingencies facing the organization Put the business plan together