1. The Manager as a Planner and Strategist
chapter eight
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives
Identify the three main steps of the planning process and the relationship between planning and strategy.
Describe some techniques managers can use to improve the planning process so they can better predict the future and mobilize organizational resources to meet future contingencies.

3. Learning Objectives (cont.)
Differentiate between the main types of business-level strategy and explain how they give an organization a competitive advantage lead to superior performance.
Differentiate between the main types of corporate-level strategies and explain how they are used to strengthen a company’s business-level strategy and competitive advantage
Describe the vital role managers play in implementing strategies to achieve an organization’s mission and goals

4. Planning and Strategy Planning
Identifying and selecting appropriate goals and courses of action for an organization.
The organizational plan that results from the planning process details the goals and specifies how managers will attain those goals. 4

5. Planning and Strategy Strategy
A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.

6. Planning and Strategy Mission Statement
A broad declaration of an organization’s purpose that identifies the organization’s products and customers and distinguishes the organization from its competitors. 6

7. Example – Facebook Mission Statement
Facebook's mission is to give people the power to share and make the world more open and connected. 7

8. Three Steps in Planning
Determining the Organization’s Mission and Goals
Defining the organization’s overriding purpose and its goals.
Formulating strategy
Managers analyze current situation and develop the strategies needed to achieve the mission.
Implementing strategy
Managers must decide how to allocate resources between groups to ensure the strategy is achieved.
Figure 8.1 page 297 8

9. The Nature of the Planning Process
To perform the planning task, managers:
Establish where an organization is at the present time
Determine its desired future state
Decide how to move it forward to reach that future state

10. Why Planning is Important
Necessary to give the organization a sense of direction and purpose
Useful way of getting managers to participate in decision making about the appropriate goals and strategies for an organization
Helps coordinate managers of the different functions and divisions of an organization
Can be used as a device for controlling managers
Planning is the activity of determining where an organization is at the present time and deciding where it should be in the future.
Managers must consider the future and forecast what may happen in order to deal with future opportunities and threats. Planning is often difficult because managers must often deal with a complex and uncertain external environment, incomplete information, and bounded rationality.
 Planning is important for four main reasons

11. Why Planning is Important
Unity
at any one time only one central, guiding plan is put into operation
Continuity
planning is an ongoing process in which managers build and refine previous plans and continually modify plans at all levels
Henri Fayol, the originator of the model of management discussed in Chapter One, said that effective plans should have four qualities: unity, continuity, accuracy, and flexibility.

12. Why Planning is Important
Accuracy
managers need to make every attempt to collect and utilize all available information at their disposal
Flexibility
plans can be altered and changed if the situation changes

13. Levels of Planning at General Electric
Division – business unit that has its own set of managers and departments and competes in a distinct industry
Divisional managers – Managers who control the various divisions of an organization
In large organizations, planning usually takes place at three levels of management: corporate, business or division, and department or functional. At the corporate level are the CEO, other top managers, and their support staff.
 At the business level are the different divisions or business units that compete in distinct industries of the company, usually led by a divisional manager.
Each division or business unit has its own set of divisional managers who control planning strategy for their particular division of unit. Each division has its own set of functions or departments, such as manufacturing, marketing, R&D, human resources, etc
Figure 8.2
Page 300 13

14. Levels and Types of Planning
Figure 8.3
Page 301

15. Levels of Planning Corporate-Level Plan Corporate-Level Strategy
Top management’s decisions pertaining to the organization’s mission, overall strategy, and structure.
Provides a framework for all other planning.
Corporate-Level Strategy
A plan that indicates in which industries and national markets an organization intends to compete. 15

16. Levels of Planning Business-Level Plan Business-Level Strategy
Long-term divisional goals that will allow the division to meet corporate goals
Division’s business-level and structure to achieve divisional goals
Business-Level Strategy
Outlines the specific methods a division, business unit, or organization will use to compete effectively against its rivals in an industry 16

17. Levels of Planning Functional-Level Plan Functional Strategy
Goals that the managers of each function will pursue to help their division attain its business-level goals
Functional Strategy
A plan of action that managers of individual functions can take to add value to an organization’s goods and services 17

18. Time Horizons of Plans Time Horizon
Period of time over which they are intended to apply or endure.
Long-term plans are usually 5 years or more.
Intermediate-term plans are 1 to 5 years.
Short-term plans are less than 1 year.
Corporate and business-level goals and strategies require long- and intermediate-term plans.
Functional plans focus on short-to intermediate-term plans
Most organizations have a rolling planning cycle to amend plans constantly. 18

19. Types of Plans Standing Plans used in programmed decision situations
Policies - general guides to action
Rules - formal written specific guides to action
Standard operating procedures (SOP) - specify an exact series of actions to follow 19

20. Types of Plans Single-Use Plans
Developed to handle non-programmed decision-making in one-of-a-kind situations
Programs: integrated plans achieving certain goals.
Project: specific action plans to complete programs.

21. Scenario Planning Scenario Planning (Contingency Planning)
The generation of multiple forecasts of future conditions followed by an analysis of how to effectively respond to those conditions.
Planning seeks predict the future, but the future is unpredictable.
By generating multiple possible “futures,” a firm can see how its plans might work in each and prepare for the possible outcomes.
Scenario planning is a learning tool to improve strategic planning results. 21

22. Determining the Organization’s Mission and Goals
Defining the Business
Who are our customers?
What customer needs are being satisfied?
How are we satisfying customer needs?
Establishing Major Goals
Provides the organization with a sense of direction
Establishing Major Goals
Provides the organization with a sense of direction
Stretches the organization to higher levels of performance.
Goals must be challenging but realistic with a definite period in which they are to be achieved. 22

23. Three Mission Statements
Figure 8.4
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