1. Chapter 7 What is planning?
20/09/2018
Chapter 7
What is planning?
Planning is all about establishing goals and then setting out policies or pathways to achieving them.
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2. The importance of planning
Take stock of all resources available.
Helps implement change in a business
By including staff in the plan they will feel more motivated and unified
A business plan will give the company and clear focus and direction which reduces uncertainty
Planning is necessary for bank loans, government grants, EU loans etc. 2

3. The importance of planning
20/09/2018
The importance of planning
Reduces uncertainty
Provides greater unity
Helps raise finance
Facilitates change
Improves control
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4. Effective plans - SMART
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Effective plans - SMART
Specific
Measurable
Agreed
Realistic
Timed
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5. 20/09/2018
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 available
Timed-there must be a timescale for achieving the objectives
SMART
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6. Types of plans Strategic plans Operational plans Tactical plans
20/09/2018
Types of plans
Strategic plans
Tactical plans
Operational plans
Contingency plans
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7. Strategic plans Also known as long term plans
20/09/2018
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.
Examples:
Achieving entrance into a new/foreign market
Achieving an increase in market share
Becoming a market leader.
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8. 20/09/2018
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.
It details it’s core values and commitments
The school has it’s own Mission Statement
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9. 20/09/2018
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
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10. 20/09/2018
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
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11. The steps in the planning process
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The steps in the planning process
Carry out a SWOT analysis to analyse the present situation.
Set objectives
Devise strategies
Implement plan
Review
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12. SWOT ANALYSIS Internal Strengths Internal Weaknesses
Location of business
Good product
Skills of employees
Technology
Internal Weaknesses
Not enough capital
Out of date machinery
Too much credit given
Lack of resources
Obsolete production methods
External Opportunities
Expansion
New countries to join EU
New product to meet customer demand
Diversification into new industry
External Threats
Competition from new EU countries
New consumer laws
New marketing inventions i.e. Social marketing 12

13. 20/09/2018
SWOT
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
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.
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14. 20/09/2018
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.
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.
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15. Group Exercise Strengths Weaknesses Internal Strengths
Company Name: _______________________________________
Mission Statement: _______________________________________
SWOT ANALYSIS
Strengths
Weaknesses
Internal Strengths
Internal Weaknesses
Opportunities
Threats
External Opportunities
External Threats 15

16. What are the stages in the planning process?
20/09/2018
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
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17. 20/09/2018
What is organising?
Organising is a management function which involves bringing people and capital resources together to achieve a common goal.
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18. Organisational structures
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Organisational structures
Organisational structures set out the ways in which these resources and tasks will be divided.
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19. Types of organisational structure
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Types of organisational structure
Functional structure
Product structure
Geographic structure
Matrix/team structure
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20. Functional structure © Edco 2012 It’s the Business 20/09/2018
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21. Functional Organisational Structure
ADVANTAGES
DISADVANTAGES
Specialisation – each department concentrates on the same job and becomes experts at that job.
Isolation – People on each dept. May know little or care about what’s going on in other depts.
Accountability - The director of each dept. Is responsible for everything in each dept.
Co-ordination – Can be difficult to get all depts to work together if required.
Clarity – Everyone knows who reports to whom and who is responsible for what task.

22. 20/09/2018
The functional structure is also called ‘line organisation’ because each person in the line is answerable to the person above. Responsibilities are well defined and so this type if structure is easy to understand
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23. 32. Product Structure
A product structure divides the organisation on the basis of products produced.
Each product line has its own production, marketing, finance and human resources manager.

24. S Product structure © Edco 2012 It’s the Business 20/09/2018
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25. Product Organisation Structure
Advantages
Disadvantages
Focus on customer – each dept. Makes sure that it delivers the best possible product to consumers.
Duplication – The business end up with a few of the same dept. i.e. Marketing, finance etc.
Competition – Healthy competition between depts.
Brand Cannibalisation – The product may steal customers from other company products.
Lower Costs – Each product is ran almost like a separate business and is judged on the profits.

26. 4. Geographical Structure
A geographic structure divided the organisation according to the geographical markets it serves.
This structure might be used if a company is selling in many different countries where customers needs and markets are different.
Marketing efforts are specialised and carried out by geographical area.

27. Geographic structure © Edco 2012 It’s the Business 20/09/2018
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28. Geographical Organisation Structure
Advantages
Disadvantages
Serves local needs better
Duplication – The business end up with a few of the same dept. i.e. Marketing, finance etc. This can lead to wasteful higher costs.
Competition – Healthy competition between regional depts.
Conflict – Conflict can occur between senior managers and local managers about who knows best for the company.
Lower Costs – Each product is ran almost like a separate business,

29. Matrix Organisational Structure
Combines two types of org structure:
Functional organisational structure
Project team structure
This is used when the business is involved in major temporary projects that require expertise from all depts of the business. Employees are temporarily taken out of their normal work and must report to the project team leader.

30. Matrix/team structure
20/09/2018
Matrix/team structure
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31. Matrix Organisational Structure
Advantages
Disadvantages
Motivation – employees chosen to join the project feel special. Satisfies esteem needs.
Two Bosses – employees report to two bosses – functional boss and their project boss.
Better relationships – interaction amongst team members from different dept.
Increased Cost – must pay to train managers.

32. 20/09/2018
The chain of command
The chain of command establishes the hierarchy in the business and shows how instructions flow through an organisation, from top to bottom.
It illustrates how many levels (layers) of management are involved.
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33. 20/09/2018
Span of control
This illustrates the number of workers reporting directly to each manager.
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34. Where a manager has responsibility for a large number of subordinates
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Wide span of control
Where a manager has responsibility for a large number of subordinates
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35. Where a manager has responsibility for a small group of employees.
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Narrow span of control
Where a manager has responsibility for a small group of employees.
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36. 20/09/2018
What is controlling?
This is about measuring performance and is carried out by comparing actual outcomes to plans, and taking corrective action if necessary.
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37. There are FOUR key areas which need to be controlled
20/09/2018
There are FOUR key areas which
need to be controlled
Stock control
Quality control
Credit control
Financial control
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