Chapter 5: Planning Flashcards
Planning
setting goals and deciding how to achieve them
Plan
Document that outlines how goals are going to be met
Business plan
Document that outlines a proposed forms goals, strategies for achieving them, and the standards for measuring success
Business model
Outline of need the firm will fill, the operations of busines, it’s conpnenets and functions, as well as the expected revenues and expenses
Strategy
Larry scale action plan that sets the direction for an organization
Strategic management
A process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals
3 reasons for strategic management
1) provide direction and momentum
2) encourage new ideas
3) develop a sustainable competitive advantage
Mission statement
What’s our reason for being
Vision statement
What do we want to become
Values statement
What values do we want to emphasize
Mission
Organizations purpose or reason for being
Vision
Long term goal describing ‘what’ an organization wants to become
Values statements
Expresses what the company stands for, it’s core priorities, the values it’s employees embody, and what it’s products contribute to the world
Strategic planning
Done by top managers
Determines what the organizations long term goals should be for the next 1-5 years
Tactical planning
Performed by middle management
Determining what contributions departments or similar work units can make with their given resources during the next 6 months to 2 years
Operational planning
Done my first-like management
Determining how to accomplish specific tasks with available resources within the next 1 week to 1 year
Goal
Aka a objective
Specific commitment to achieve a measurable result within a stated period of time
Long term goals
1-5 year span that focussed on achieving the strategies identified in a company’s strategic plan
Short term goals
Tend to span 12 months and are connected to strategic goals on a hierarchy known as a means end chain
Means end chain
Hierarchy of goals; in the chain of management the accomplishment of low level goals are the means leading to the accomplishments of high level goals or ends
In easy terms: shows how goals are connected across the organizations
Operating plan
Typically designed for a 1 year period, this plan defines how a manager will conduct his business based on the action plan
Action plans
Course of action needed to achieve a stated goal
SMART goal
Specific Measurable Attainable Results-orientated Target dates
Management by objectives
Four step process
4 steps of management by objectives
1) managers and employees jointly set objectives for the emplyee
2) managers develop action plans
3) managers and employees periodically review the employees performance
4) the manager makes a performance appraisal and rewards the employee according to results
Cascading goals
Objectives are structured in a unified hierarchy, becoming more specific at lower levels or the organization
Planning / control cycle
A cycle that has two planning steps and 2 control steps
2 planning steps
Part of planing / control cycle
Make the plan,
Carry out the plan
Control steps
Part of planning / control cycle
Control the direction by comparing results with the plan
Control the direction by taking corrective action in two ways :
A) correction diviations in the plan being carried out
B) by improving future plans
