1. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Planning and Organizing 4.1 4.1 The Planning Function 4.2 4.2 Using Planning Tools 4.3 4.3 The Organizing Function 4.4 4.4 Developing Effective Organizations CHAPTER 4

2. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e 4.1 4.1 The Planning Function GOALS ● Recognize the importance of planning to business success. ● Differentiate between strategic and operational planning. 2 CHAPTER 4

3. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Why Plan? ● The value of a business plan (a written description of the nature of the business, its goals and objectives, and how they will be achieved) ● Poor planning ● Huge losses, failure of existing and/or successful business ● Correct planning ● Larger business, higher profits, personal satisfaction 3 CHAPTER 4

4. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Why Plan? ● The value of a business plan ● Analyzes the opportunities and risks business face ● Brief and simple for new small businesses ● Large and complex, existing business ● Multinational businesses have more than one plan ● Plans will work toward same overall objective ● Specific plans are for Internet business, operations, marketing, financial management, and human resource decisions ● Bankers look at for loan consideration 4 CHAPTER 4

5. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Why Plan? ● Elements of a Business Plan (page 82) ● Nature of the Business ● Goals and Objectives ● Marketing Plan ● Financial Plan ● Organizational Plan 5 CHAPTER 4

6. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Why Plan? ● The importance of planning ● Most important management activity ● Sets direction for the business and specific goals ● Guide for making decisions ● Encourages managers to be more precise and objective 6 CHAPTER 4

7. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Levels of Planning ● Strategic planning ● Long-term broad goals and direction for the business ● Developing new products ● Building a new factory ● SWOT analysis ● Strength ● Weaknesses ● Opportunities ● Threats 7 CHAPTER 4

8. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Levels of Planning ● Strategic planning ● Internal factors-with in a business that control and influence plans ● External factors-operating outside of the business, but managers cannot control but may influence the plan 8 CHAPTER 4

9. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Levels of Planning ● Steps in Strategic Planning (page 83) ● Step 1-EXTERNAL ANALYSIS ● Step 2-INTERNAL ANALYSIS ● Step 3-MISSION ● Step 4-GOALS ● Step 5-STRATEGIES 9 CHAPTER 4

10. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Levels of Planning ● Strategic planning ● Step 1-managers ● Identify opportunity to expand ● Improve the business and any threats the company faces from competition ● Changes in economy ● New laws and regulations ● Technology improvements 10 CHAPTER 4

11. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Levels of Planning ● Strategic planning ● Step 2-managers ● Evaluate organizations capabilities to determine strengths and weaknesses 11 CHAPTER 4

12. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Levels of Planning ● Strategic planning ● Step 3-managers ● Agree on a mission statement (a short, specific statement for the business’s purpose and direction) ● Look at the vision (the company’s reason for existing) 12 CHAPTER 4

13. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Levels of Planning ● Strategic planning ● Top-executives responsible for strategic planning ● Collect info. From lower-level managers, employees, and other sources ● Small Business Administration (SBA) provide assistance to new and small businesses 13 CHAPTER 4

14. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Levels of Planning ● Operational planning ● How work will be done ● Who will do it ● Resources needed 14 CHAPTER 4

15. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e 4.2 4.2 Using Planning Tools GOALS ● Identify the characteristics of effective goals. ● Describe several business planning tools and how they are used. 15 CHAPTER 4

16. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Establishing Direction GOALS ● Characteristics of effective goals ● Specific and meaningful ● Achievable ● Clearly communicated ● Consistent with each other and with overall company goals 16 CHAPTER 4

17. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Planning Tools ● Budgets-written financial plan for operations developed for a specific time period ● Schedules-a time plan for reaching objectives ● Standards-a specific measure against which something is judged 17 CHAPTER 4

18. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Planning Tools ● Policies-guidelines used in making decisions regarding specific, recurring situations ● Procedures-a sequence of steps to be followed for performing a specific task ● Research-collect data for managers and to provide information needed to improve planning decisions 18 CHAPTER 4

19. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Procedure for Admitting Employees and Visitors 19 CHAPTER 4

20. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e 4.3 4.3 The Organizing Function GOALS ● Describe factors that managers should consider when organizing work. ● Discuss how the characteristics of good organization contribute to a more effective work environment. 20 CHAPTER 4

21. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Organizing Work ● The role of organization charts (an illustration of the structure of an organization, major job classifications, and reporting relationships among the organization) ● Large organizations provide new employees information though handbook or website to show the organization chart ● Employees know how they fit into the company and how the organization works 21 CHAPTER 4

22. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Organization Chart For Part of a Retail Business 22 CHAPTER 4

23. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Organizing Work ● The process of organizing work ● Division of work ● Work divided into units, such as departments ● Varies with size of business, and type of industry and business ● Facilities and working conditions ● Necessary equipment and material must be provided ● Facility layout-arranged to have a smooth flow with little waste and safe working conditions 23 CHAPTER 4

24. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Organizing Work ● Employees ● Divide work into manageable units providing adequate equipment and facilities ● Establish good relationship among employees so productivity is high 24 CHAPTER 4

25. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Organization Chart for Ingram Company 25 CHAPTER 4

26. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Organization Chart for Ingram & Kerr 26 CHAPTER 4

27. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Organization Chart for Ingram Kerr, Inc. 27 CHAPTER 4

28. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Characteristics of Good Organization ● Responsibility (obligation to do a task) and authority (the right to make decision about work assignments and to require other employees to perform assigned tasks) ● Must assign responsibility to employees who can do the job ● Empowerment (authority given to individual employees to make decisions and solve problems) 28 CHAPTER 4

29. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Characteristics of Good Organization ● Accountability (the obligation to accept responsibility for outcomes of assigned tasks) ● Each employee is accountable for achieving the quality and quantity defined by goals and standards ● Unity of command (no employee reports to more than one supervisor at a time or for a particular task) ● Without unity of command, confusion and poor work relations is the result 29 CHAPTER 4

30. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Characteristics of Good Organization ● Span of control (the number of employees any manager can supervise directly) ● Managers who supervise too many people is overworked and unable to perform duties effectively ● Is larger at lower levels of operation than at higher levels 30 CHAPTER 4

31. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e 4.4 4.4Developing Effective Organizations GOALS ● Describe the strengths and weaknesses of four types of organizational structures. ● Make recommendations for improving business organization. 31 CHAPTER 4

32. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Types of Organizational Structures ● Line organization ● Business structure in which all authority and responsibility can be traced in a direct line from the top executive down to the lowest employee level. ● Lines connect individual boxed that indicate the lines of authority 32 CHAPTER 4

33. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Line Organization 33 CHAPTER 4

34. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Types of Organizational Structures ● Line-and-staff organization ● Managers have direct control over the units and employees they supervise ● The addition of staff specialists to a line organization. 34 CHAPTER 4

35. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Line-and-Staff Organization 35 CHAPTER 4

36. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Types of Organizational Structures ● Matrix organization ● Organizes employees into temporary work teams to complete specific projects ● When assigned to a new project will have a new project manager ● No permanent organizational structure ● Successful for research firms, advertising agencies, and construction companies 36 CHAPTER 4

37. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Types of Organizational Structures ● Team organization ● Business structure that divides employees into permanent work teams. ● Teams responsible for business activities ● Team leader replaces manager ● Self-directed work team ● A team in which members together are responsible for the work assigned to the team. 37 CHAPTER 4

38. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Improving Business Organization ● Decentralized organization ● A business which is divided into smaller operating units, and managers who head the units have almost total responsibility and authority for operations. ● Flattened organization ● An organization with fewer levels of management than traditional structures. ● Improved communication, because information flow through fewer levels 38 CHAPTER 4