Sei sulla pagina 1di 17

Essentials of Management

Session 2

Planning , Decision Making and strategy

dilip@bmaindia.com

Planning and Decision making

Planning is “Setting organisational goals and

deciding how best to achieve them.”

Decision making is “part of the planning process that involves selecting a course of

action from a set of alternatives.”

(Griffin, 2005, p10)

Procter and Gamble (P&G) case

Identify plans and DM activity.

Double the revenue in 10 years

Increase revenues by 25 percent or increase revenues by 3 times

Diversification into new markets, cost cutting or buying competing businesses.

Organisational goals

Mission statement

Strategic goals Goals set by and for the top

management of the organisation.

Tactical goals Operationalize actions?

Operational goals Optimize operations.

Organisational plans - Nature

Strategic plans general plan outlining decisions

on resource allocation, priorities and action steps necessary to facilitate long term strategic goals.

Tactical plans implementing specific parts of

strategic plans with specific focus. Effective

tactical plan involves both development and

execution

Operational plans aims at achieving operational

goals. Focussed on functional effeciency.

Organisational plans - Timeframe

Long range plans

Intermediate plans

Short range plans

Contingency plans

Operational plans

Single use plans

1.

Program large set of activities. Complex steps

2.

Project less scope and more focus

Standing plans

1.

Policies Framework or a guide for action

2.

Standard operating procedure (SOP) Steps to

be followed

3.

Rules and regulations specific on how to carry

out a particular activity

Management by objectives (MBO)

A formal goal-setting process involving

collaboration between managers and subordinates; the extent to which goals are accomplished is a major factor in evaluating and rewarding subordinates’ performance

MBO Process

Starting formal goal setting program

Establishment of organisational goals Collaborating goal setting and planning Communicating organisational goals and
Establishment of
organisational goals
Collaborating goal
setting and planning
Communicating
organisational goals
and plans, meeting,
verifying goals,
counselling, resources
Periodic review
and plans

evaluation

Decision making

“Act of choosing one alternative from among a

set of alternatives” (Griffin, 2005, p276)

Types of decisions in organisations

1. Programmed decisions structured and recurs with some frequency

2. Non-programmed decisions unstructured

and ocurs less often

Rational decision making process

Recognising and

defining decision

situation

Identifying

alternatives

Evaluating

alternatives

Selecting the best alternative

Implementing

Follow up and evaluation

Stimulus positive or negative

Ex employee turnover has increased by 5%

Generating obvious and creative alternatives

Ex Increase wages, benefits, change hiring standards

Feasibility, satisfaction, consequences

Increased benefits may not be feasible. Increasing wages or Changing hiring standards may benefit the organisation

Choose the alternative that best fits the situation

Changing hiring standards is time consuming so increase wages

Implemented into the organisational system

Approval from top mgmt. establishing new wage system by HR

Periodically Ascertain the alternative chosen and implemented against results

Six months later, drop in the turnover

Strategy

“Strategy is the direction and scope of an organisation

over the long term, which achieves advantage in a changing environment through its configuration of

resources and competences with the aim of fulfilling

stakeholder expectations” Johnson et al (2005) Exploring Corporate Strategy p.9

Strategic management is a “comprehensive and ongoing management process aimed and formulating and implementing effective strategies.”

Strategic management

Types of strategies

1.

Corporate level strategies

2.

Business level strategies

Steps in strategic management

1.

Strategy formulation

2.

Strategy implementation

3.

Strategy evaluation

Swot analysis for strategy formulation

Strengths

weaknesses

Opportunities

Threats

Corporate level strategies

1.

Single product strategy

2.

Related diversification

3.

Unrelated diversification

Business level strategies – Porter’s

generic strategies

1.

Differentiation strategy organisation seeks

to differentiate itself from competitors through quality of its products and services

2.

Cost-leadership strategy organisation aims to gain competitive advantage by reducing

its cost below cost of competitors

3.

Focus strategy organisation concentrates

on specific regional market or product line

Summary

Thank you