Planning and Strategy

Chapter 5
Lecture Outlines
Planning and Strategy

Chapter Objectives
• Identify four organizational responses to uncertainty,

and distinguish the three types of planning.
• Write good objectives and discuss the role of
objectives in planning.
• Explain the concept of synergy and identify four kinds
of synergy.
• Describe Porter’s model of generic competitive
strategies.
• Identify and discuss at least three e-business
strategy lessons from the Internet revolution.
Copyright © Houghton Mifflin Company. All rights reserved. Lecture Outlines, 5–2
Chapter Objectives (cont’d)
• Identify and describe the four steps in the

strategic management process, and explain
the nature and purpose of a SWOT analysis.
Coping with Uncertainty
• Planning
– The process of coping with uncertainty by formulating
courses of action to achieve specified results.
• Three Types of Uncertainty
– State uncertainty: occurs when the environment, or
a portion of the environment, is considered unstable.
– Effect uncertainty: occurs when impacts of
environmental change are unpredictable.
– Response uncertainty: arises when the
consequences of decisions are unpredictable.
Figure 5.1
Planning: The Primary Management Function
Coping with Uncertainty (cont’d)
• Organizational Responses to Uncertainty

– Defenders: rely on a primary technology and/or a
narrow product line to remain competitive.
– Prospectors: seek first-mover advantage by
aggressively making things happen and not waiting
for them to happen.
– Analyzers: follow the market leader and imitate what
works; thereby, avoiding expensive R&D mistakes.
– Reactors: wait for adversity (e.g., declining sales) to
occur before taking corrective action.
Balancing Planned Action and
Spontaneity in the Twenty-First Century
• Command-and-Control Model
– Top-down tight control of operations through exacting
planning created organizational inflexibility to deal
with unanticipated events and limited success.
• Contingency Model
– Participative planning and control balance planned
action with creative flexibility to take advantage of
unexpected opportunities and to cope with the need
for change.
The Essentials of Planning
• A Plan:
– Is a specific documented intention consisting of an
objective (end) and an action statement (means).
– States what, when, and how something is to be done.
• Essentials of Sound Planning
– Organizational mission
– Types of planning
– Objectives
– Priorities
– The planning/control cycle
The Essentials of Planning (cont’d)
• Organizational Mission
– A clear, formally written, and publicized statement that guides
the organization by
1. defining the organization for key stakeholders.
2. creating an inspiring vision of the organization.
3. outlining how the vision will be accomplished.
4. establishing key priorities.
5. stating a common goal and foster togetherness.
6. creating a philosophical anchor for the organization.
7. generating enthusiasm and a “can do” attitude.
8. empowering organization members.
• Types of Planning
– Strategic planning: determining how to pursue long-
term goals with available resources.
– Intermediate planning: determining subunits’
contribution with allocated resources.
– Operational planning: determining how to
accomplish specific tasks with available resources.
Figure 5.2
Types of Planning
• Planning Horizon
– The elapsed time between the formulation and the
execution of a planned activity.
– Planning horizon length corresponds to the type of
plan with which it is associated, lengths shorten as
the planning process evolves from strategic to
intermediate to operational plans.
• Objectives
– An objective is a firm commitment to achieve a
measurable result within a specified period.
• Writing Good Objectives
– Objectives should be expressed in quantitative,
measurable, and concrete terms.
– What specific result is to be achieved?
– When is the result to be achieved?
– How the result is to be measured?
– Who will be responsible for achieving the result?
• The Importance of Objectives (Uses of)

– Targets: sets specific goals to achieve.
– Measuring sticks: gages how much was achieved.
– Commitment: encourages pursuit of the objective.
– Motivation: provides a challenge for achievement.
• Management by Objectives (MBO)
– A comprehensive management system based on
measurable participatively set objectives that
leverages the motivational power of objectives.
• The Means-Ends Chain of Objectives

– Achievement of lower-level objectives creates a
means for achieving higher-level objectives
• Priorities
– A ranking of goals, objectives, or activities in order of
importance that guide the order and timing of
decisions that management makes regarding the
allocation of resources.
• The A-B-C Priority System
– A: “Must do” objectives critical to successful
performance.
– B: “Should do” objectives necessary for improved
performance.
– C: “Nice to do” objectives are desirable for improved
performance but not critical to survival or improved
performance.
• The 80/20 Principle (Pareto Analysis)
– A majority of causes, inputs, or efforts tend to
produce a majority of results, outputs, or rewards.
• The Planning/Control Cycle

– Planning sets in motion activities to accomplish the
planned objectives.
– Control functions to direct and monitor activities for
deviations from plans (i.e., attainment of objectives).
– Planning uses feedback from controls to improve/alter
plans and implement corrective actions where
necessary.
Figure 5.4
The Basic Planning/Control Cycle
Thinking Strategically
(Including E-Business Strategies)
• Synergy
– The concept that the whole is greater than the sum of
the parts.
• Types of synergy
– Market synergy: extending products to new markets.
– Cost synergy: savings from combinations of
common-base operations, resources, and facilities.
– Technological synergy: the transfer and application
of technologies to new markets.
– Management synergy: complementary skills that
make for more effective overall management.
Porter’s Generic
Competitive Strategies
• Model’s Competitive Variables

– Competitive advantage: how to compete in a market.
– Competitive scope: how broad of a market to target.
• Cost Leadership Strategy
– Having the lowest overall cost in a market provides a
competitive advantage in pricing over competitors.
• Differentiation Strategy
– Providing unique and superior value for the customer
that builds brand loyalty.
Porter’s Generic
Competitive Strategies (cont’d)
• Cost Focus Strategy

– Attempting to gain a competitive edge in a narrow (or
regional) market segment by controlling (competitively
dominating) the segment.
• Focused Differentiation
– Involves achieving a competitive edge by delivering a
superior product and/or service to a limited audience.
Thinking Strategically (cont’d)
• E-Business Strategies for the Internet

– The Internet changes everything–but it doesn’t
change everything overnight.
– Some of the old rules still apply–an investment should
still either save you money or make you money.
– First, we overestimated the Internet; don’t
underestimate it now–its long-term impact will likely
exceed expectations.
Thinking Strategically (cont’d)
• Lessons from the Dot-com World

– Evolving Internet technologies are still emerging.
– There is no one-size-fits-all Internet strategy.
– There are still a lot of ways to make money on the
Internet.
– Customer loyalty is built with reliable brand names
and “sticky” web sites.
The Strategic
Management Process
• Four Steps in the Strategic Management

Process
1. Formulation of a grand strategy.
2. Formulation of strategic plans.
3. Implementation of strategic plans.
4. Strategic control.
• Corrective action based on evaluation and
feedback is takes place throughout the entire
strategic management process.
Formulation of a Grand Strategy
• Grand Strategy
– A general explanation of how the organization’s
mission is to be accomplished.
• Situational Analysis
– Finding the organization’s niche by performing a
SWOT (Strengths, Weaknesses, Opportunities, and
Threats) analysis to match unfolding opportunities
with resources being acquired.
• Capability profile
– Identifying the organization’s strengths and
weaknesses.
Formulation of a Grand Strategy (cont’d)
• Situational Analysis (cont’d)
– Key capabilities for today’s companies
– Quick response to market trends.
– Rapid product development.
– Rapid production and delivery.
– Continuous cost reduction.
– Continuous improvement of processes, human
resources, and products.
– Greater flexibility of operations.
Formulation of Strategic Plans
• Criteria for Formulating Strategic Plans
– Develop clear results-oriented objectives stated in measurable
terms.
– Identify activities required to accomplish the objectives.
– Assign specific responsibilities to the appropriate personnel.
– Estimate times to accomplish activities and their appropriate
sequencing.
– Determine resources required to accomplish the activities.
– Communicate and coordinate the above elements and complete
the action plan.
Strategic Implementation
and Control
• Implementation of Strategic Plans
– Execution is fundamental to strategy and has to
shape it.
– Developing a systematic filtering down process
(“selling the strategy”) that facilitates the translation
of strategic plans into lower-level plans requires
considering:
1. Organizational structure.
2. People.
3. Culture.
4. Control systems.
and Control (cont’d)
• Strategic Control
– A formal control system should be developed that
helps keep strategic plans on track by
– setting up and testing channels for information on
progress, problems, and the fit of strategic
assumptions to the environment.
– using software programs for real-time tracking of
production, financial, and marketing reports.
and Control (cont’d)
• Corrective Action Based on Evaluation and

Feedback
– Negative feedback should prompt corrective action at
the step immediately before the problem occurs.
– Possible corrective actions include:
– updating strategic assumptions.
– reformulating strategic plans.
– rewriting policies.
– making personnel changes.
– modifying budget allocations.

Planning and Strategy

Caricato da

Informazioni sul documento

Descrizione originale:

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Planning and Strategy

Caricato da

Copyright:

Formati disponibili

Chapter 5

Planning and Strategy

• Identify four organizational responses to uncertainty,

• Identify and describe the four steps in the

• Organizational Responses to Uncertainty

• The Importance of Objectives (Uses of)

• The Means-Ends Chain of Objectives

• The Planning/Control Cycle

• Model’s Competitive Variables

• Cost Focus Strategy

• E-Business Strategies for the Internet

• Lessons from the Dot-com World

• Four Steps in the Strategic Management

• Corrective Action Based on Evaluation and

Potrebbero piacerti anche