1. Organizational Planning Tools
Unit 1.6
Organizational Planning Tools

2. Decision making The core role of management Four key questions:
Where are we now?
Where do we want to be?
How do we get there?
How do we know we’re there?
Answer- Setting goals (objectives)

3. Goals/Objectives What the business hopes and plans to achieve
Decisions cannot be made on a problem-by-problem basis OR merely to meet needs as they arise!
“If you do not know where you are going, any path will get you there.”

4. Purposes of Goal Setting
Provide direction and guidance for managers at all levels
Helps firms allocate resources
Helps managers assess performance
Allows the business to function systematically and commit its resources (on all levels) to achieving its goals

5. A Hierarchy of Goals and Plans
Goals and plans are established on three levels: Strategic, Tactical and Operational
It is a hierarchy because there is a logical flow from one level to the next.

6. Strategic Tactical Operational
Overall direction, long-term, Sr. management
(resource allocation, co. priorities)
Tactical
Implementation plans, Short-range, middle management
(HOW)
Operational
Performance targets, daily/weekly/monthly, supervisors

7. Planning Levels
Strategic
Tactical
Operational

8. Strategy Formulation

9. Formulating Strategy Define Organizational Goals-Mission Statement
Set Strategic Goals
Environmental Analysis
PEST Analysis
Organizational Analysis
SWOT

10. Environmental Analysis Organizational Analysis

11. SWOT Analysis A decision making tool
Used to assess the current and future situation of:
A product
A brand
A proposal
A company

12. Strengths and Weaknesses
Internal factors an organization currently faces.
Within the firm’s own control.

13. STRENGTHS
Factors that are positive compared to competitors (competitive advantages)
Examples: strong brand, good corporate image (MARKETING), highly skilled workers (HUMAN RESOURCES), technology, inventory systems (PRODUCTION) cash reserves (FINANCE)
Help a business achieve org. objectives
Strategy – develop & protect strengths

14. WEAKNESSES
Internal factors that are negative compared to competitors (competitive disadvantages)
Examples: poor product quality, unskilled workforce, management incompetence, poor cash flow position, poor co. image
Prevent a business from achieving objectives
Strategy – prevent or remove in order to compete with rivals

15. Opportunities & Threats
External factors the organization is likely to face in the near future
Beyond the control of any organization

16. OPPORTUNITIES
External possibilities and prospects for future development
Examples: lower labor costs overseas, changing demographics, new technologies, cultural changes, govt. laws favorable to business
Help a firm formulate corporate strategy

17. THREATS External factors that cause problems for business
Examples: SARS, Mad Cow, 9-11, terrorism, political unrest, recession
Help a firm formulate corporate strategy

18. Opportunities & Threats
Identified in PEST Analysis
The business environment is dynamic
“nothing remains unchanged for very long.”
Forcasting and environmental scanning are critical to make appropriate decisions. (STRATEGY)

19. PEST v SWOT Broad focus All factors in external environment
Assesses larger issues
Narrow focus
Assess a specific business proposition
Used to produce a SWOT
NOT used to produce a PEST
Does not consider internal factors
CONSIDERS BOTH INTERNAL AND EXTERNAL FACTORS

20. See example SWOT on Page 100 in Hoang text.
Review the advantages/disadvantages of SWOT

21. Business Plan A decision making tool
A report outlining how a business will achieve its objectives
Purpose: to gain financial backing from lenders
Lenders use the plan to judge likely success and the ability to re-pay the loan.
See Page 97 in Hoang text