lesson 3-5 Flashcards
is the process of deciding which objectives to pursue during a future time and how to achieve those objectives. It is the primary management function and is inherent in everything a manager does.
PLANNING
No plans
- It is futile for a manager to attempt to perform any other management functions without having a plan
- Managers who attempt to organize without a plan finds themselves reorganizing on a regular basis
- Manager who attempts to staff without a plan will constantly hiring and firing employees
- Motivation is almost impossible in an organization undergoing continuous reorganization and high employee turnover.
With plans
- Actively affect rather than passively affect the future
- By setting objectives and charting a course of action, the organization commits itself to “making it happen.”
- Planning provides a means for actively involving
personnel from all areas of the organization in the management of the organization.
BENEFITS OF INVOLVEMENT OF PERSONNEL
- Input from throughout the organization improves the quality of good plans; good suggestions can come from any level in the organization.
- Enhances the overall understanding of the organization’s direction. Knowing the big picture can minimize friction among departments, sections, and individuals.
- Fosters a greater personnel commitment to the plan; the plan becomes “our” plan rather than “their” plan.
- Positive attitudes created in involvement improve overall organizational morale and loyalty.
- Planning has a positive impact on the quality if work produced.
Precise statement of results sought, quantified in time and magnitude, where possible
Goal
PLANNING AT VARIOUS LEVEL OF MANAGEMENT
- Top management level – strategic planning
- Middle management level – intermediate planning
- Lower management level – operational planning
process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.
- Top management level – strategic planning
the process of determining the contribution that subunits can make with allocated resources. The goal of subunit is determined and a plan is prepared to provide a guide to the realization of goals. It is design to support the strategic plan.
- Middle management level – intermediate planning
- the process of determining how specific task can best be accomplished on time with available resources. It is design to support the strategic plan and intermediate plan.
- Lower management level – operational planning
THE PLANNING PROCESS
- Setting organizational, divisional or unit goals – provide a sense of direction. The setting of goals provide an answer. If everybody is aware of the goals, there is big chance that everybody contribute his share in the realization of such goals.
- Developing strategies or tactics to reach those goals
- Determining resources needed and
- Setting standards
STRATEGY VS. TACTICS
strategy
* Defined as a course of action aimed at ensuring that the organization will achieve its objectives.
tactics
* A short-term action taken by management to adjust to negative internal or external influences.
* Formulated and implement in support of the firm strategies. The decision about short term goals and the course of action are indicated in the tactical plan.
- This process involves determining the human and non human resource required by such strategies or tactics. Even if the resource requirements are currently available, they must be specified.
- The quality and quantity of resources needed resources will suffice. The specific requirements will be determined by the different units of the company.
DETERMINING RESOURCES NEEDED
- A quantitative or qualitative measuring device designed to help monitor the performance of people, capital goods or processes.
- An example of standard is the minimum number of units that must be produced by a worker per day in each work situation.
SETTING STANDARDS
- Written, documented plan developed through an identifiable process. The appropriate degree of sophistication depends on the needs of individual managers and organization itself. the environment, size and type of business are factors that typically affect the planning needs of an organization.
FORMAL PLANNING
Originate from the functional areas of an organization such as production, marketing, finance and personnel.
FUNCTIONAL PLANS
4 FUNCTIONAL PLANS
- Marketing plan
- Production plan
- Financial plan
- Human resource management plan
for implementing and controlling an organizations marketing activities related to a particular marketing strategy
- Marketing plan
states the quantity of output a company must produce in broad terms and by product family.
- Production plan
summarizes the current financial situation of the firm, analyzes financial needs and recommends a direction for financial activities.
- Financial plan
it indicates the human resource needs of a company detailed in terms of quantity and quality and based on the requirements of the company’s strategic plan.
- Human resource management plan
PLAN WITH TIME HORIZON
Short-range plans
Long-range plans
these are plans intended to cover a period less than one year. First-line supervisors are mostly concerned with these plans
Short-range plans
these are plans covering a time span of more than one year. These are mostly undertaken by middle and top management
Long-range plans
should be clear, concise and quantified when possible. Affected personnel should clearly understand what is expected.
Should be dynamic; that is, they should be reevaluated as the environment and opportunities change.
Objective
Objective should be
Profit oriented
Service to customers
Employee needs and well being
Social responsibility
AREAS FOR ESTABLISHING OBJECTIVES IN MOST ORGANIZATION
- Profitability. Measures the degree to which the firm is attaining an acceptable level of profits; usually expressed in terms of profits before or later taxes, return of investments, earnings per share or profit- to-sales ratios.
- Markets. Reflects the firms position in its marketplace, expressed in terms of share of the market, dollar or unit volume in sales, or niche in the industry.
- Productivity. Measures the efficiency of internal operations expressed as ratio of inputs to outputs, such as number of items or services produced per unit of time.
- Product. Describes the introduction or elimination of products or services; expressed in terms of when a product or service will be introduced or dropped.
- Financial resources. Reflects goals relating to the fundings needs of the firm; expressed in terms of capital structure, new issues of common stock, cash flow, working capital, dividend payments and collection periods.
- Physical facilities. Describe the physical facilities of the firm; expressed in terms of capital structure, new issues of common stock, cash flow, working capital, dividend payments and collection periods.
- Research and innovation. Reflects the research development, or innovation aspirations of the firm; usually expressed in terms of dollars to be expended.
- Organization structure. Describes objectives relating to changes in the organizational structure and related activities; expressed in terms of a desired future structure or network of relationship.
- Human resources. Describes the human resource assets of the organization; expressed in terms of absenteeism, tardiness, number of grievances and training.
- Social responsibility. Refers to the commitments of the firms regarding society and the environment; expressed in terms of types of activities, number of days of service, or financial contributions.
PLANS ACCORDING TO FREQUENCY OF USE
- Standing plans
- Single-use plans
plans that used again and again and they focus on managerial situations that recur repeatedly.
Standing plans
specifically develop to implement courses of action that are relatively unique and are unlikely to be repeated.
Single-use plans
Standing plans 3 sub
- Policies – broad guidelines to aid managers at every level in making decisions about recurring situations or functions.
- Procedures – describe the exact series of action to be taken in a given situation.
- Rules – statements that either require or forbid a certain action.
Single-use plans 3 subs
- Budget – projected expenditure for a certain activity and explains where the required funds will come from.
- Programs – designed to coordinate a large set of activities
- Project – more limited in scope and is sometimes prepared to support a program.
CONTENTS OF MARKETING PLAN
- The executive summary – presents an overall view of the marketing project and its potential
- Table of contents
- Situational analysis and target markets
- Marketing goals and objectives
- Marketing strategies
- Marketing tactics
- Schedules and budgets
- Financial data and control
CONTENTS OF THE PRODUCTION PLAN
The amount of capacity and company must have
How many employee are required
How much material must be purchased
FINANCIAL PLAN
- An analysis of the firms current financial condition as indicated by an analysis of the most recent statement
- Sales forecast
- Capital budget
- Cash budget
- A set of proforma (or projected) financial statements
- The external financing plans
CONTENTS OF HUMAN RESOURCE PLANS
- Personnel requirements of the company
- Plans for recruitment and selection
- Training plan
- Retirement plan
PARTS OF STRATEGIC PLAN
- Company or corporate mission
- Objectives or goals
- Strategies
- Is the application of basic planning process at the highest levels of organization. Top management determines the long run direction and performance of the organization by ensuring the careful formulation, proper implementation and continuous evaluation of plans and strategies.
- Strategic management includes setting the organization’s mission; defining what business or businesses the organization will be in; setting objectives; developing, implementing, and evaluating strategies and adjusting these components as necessary.
STRATEGIC MANAGEMENT
3 MAJOR PHASE of Strategic management
Formulation phase – initial strategic plan is developed
Implementation phase – strategic plan is put into
action
Evaluation phase – implemented plan is monitored, evaluated and updated.
is a management function which refers to the structuring of resources and activities to accomplish objectives in an efficient and effective manner.
* The arrangement or relationship of positions within an organization is called structure. The result of the organizing process is the structure.
ORGANIZING
THE PURPOSE OF THE STRUCTURE
- It defines the relationship between tasks and authority for individuals and departments.
- It defines formal reporting relationships, the number of levels in the hierarchy of the organization and span of control.
- It defines the grouping of individuals into departments and departments into organization.
- It defines the systems to effect coordination of effort in both vertical (authority) and horizontal (tasks) directions.
ENGINEERING MANAGER MUST BE CONCERNED WITH THE FF:
- Division of labor
- Delegation of Authority
- Departmentation
- Span of control
- Coordination
determining the scope of work and how it is combined in a job.
- Division of labor
- the process of assigning various degrees of decision- making authority to subordinate
- Delegation of Authority
- the grouping of related jobs, activities, or processes into major organizational subunits
Departmentation
- the number of people who report directly to a given manager
- Span of control
the linking of activities in the organization that serves to achieve a common goal or objective.
Coordination
- Is the structure that details lines or responsibilities, authority and position.
- It is the planned structure and it represents the deliberate attempt to establish patterned relationship among components that will meet the objectives effectively.
THE FORMAL ORGANIZATION