Formal Planning Flashcards
1
Q
Potential dangers of formal planning
A
formal planning is rigid. as nothing is fixed in the environment this may be a problem
short term planning:
- done through budget control
- compare performance to a plan
- does not identify flaws in plan
future planning:
- provides method for assessment of new product strategies and new market strategies
5 year plan:
- cant be fixed
- budgetart process associated with their construction prevents over confidence
2
Q
short term planning
A
- congruent with contingency, co operation
- overplanning will drive the firm to a mechanistic system of management
- planning should illuminate rather than obscure
3
Q
Formal planning approach
A
- analysis of internal activity (SWOT)
- projecting current product line - profit, sales, investment
- external environment analysis (SWOT/ PEST)
- establish broad goals
- establish gap between expected and desired results
- communicate ideas
- more specific targets, plan
- contingencies
- long term budgets
- implement
- monitor and evaluate
- review and approval
4
Q
Brain Quinn’s studies
A
looked at companies to find the dynamics of strategic management
- power: behavioural relationships of formal systems planning, modelled adequately the successful companies formulation process
- effective strategies emerge from subsystems, each looking at different aspects
- logic behind each subsystem is very important and powerful
- subsystems and strategy are linked by logical incrementalism
5
Q
logical incrementalism
A
- incremental approach is favoured, early commitments under stress are normally formative, tentative and subject to later revision
- incrementalism helps because: can cope with cognitive and process limits, build a logoical, analytical framework and create personnel and organisatoinal awareness and understanding
6
Q
incrementalism in diversification
A
- diversification and acquisition leads to final outcome being different to initial plant
diverstiture: difficult area as companies don’t like o admit failure
reorganising: conflict potential so incremental approach helpful
external forces: forces uncontrollable - react in incremental manner
