Topic 2A Planning (chapter 5) Flashcards
Action plan
Course of action needed to achieve a stated goal
Business model
Describes how its strategy will create value for the customer and at the same time generate revenues sufficient to cover costs and realize a profit
Business plan
A document that outlines a proposed firm’s goals, the strategy for achieving them, and the standards for measuring success
Describes the company’s “business model”
Cascading goals
is the process of ensuring that strategic goals set at the top level align, or “cascade” downward with more specific short-term goals at lower levels within an organization, including employees’ objectives
Customer value proposition goal
Describes
(1) company’s approach to satisfying buyer needs or wants
(2) at a price the customer will consider a good value
Long-term goals (2 things)
- Generally referred to as strategic goals
- Tend to span 1 to 5 years and focus on achieving the strategies identified in a company’s strategic plan
Management by objectives (MBO)
(4 steps)
(1) managers and employees jointly set objectives for the employee
(2) managers develop action plans
(3) managers and employees periodically review the employee’s performance
(4) the manager makes a performance appraisal and rewards the employee according to results
Mission statement (3 things)
Statement that expresses the purpose of the organization
- Express the purpose of the organization.
- What is our reason for being?
- Why are we here?
Objective
Also known as goal; a specific commitment to achieve a measurable result within a stated period of time
Operating plan
Typically designed for a 1-year period, this plan defines how a manager will conduct his or her business based on the action plan; the operating plan identifies clear targets such as revenues, cash flow, and market share
Operational goals
Goals that are set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals
Operational planning
Planning/ control cycles
1- 52 weeks
Determining how to accomplish specific tasks with available resources within the next 1-week to 1-year period; done by first-line managers
Short-term goals (2 things)
- Sometimes referred to as tactical or operational goals, or just plain goals
- Generally span 12 months and connected to strategic goals in a hierarchy known as a means-end chain
SMART goals, what are the 5 keys terms
Specific:
Measurable
Attainable
Results-oriented
Target dates
Strategic goals
Goals that are set by and for top management and focus on objectives for the organization as a whole
Strategic management
A process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals
Strategic planning
1- 5 years
Determines what the organization’s long-term goals should be for the next one to five years with the resources they expect to have available
A Strategy
or strategic plan, sets the long term goals and direction for the organization.
Tactical goals
Goals that are set by and for middle managers and focus on the actions needed to achieve strategic goals
Tactical planning
6 - 24 months
Determining what contributions departments or similar work units can make with their given resources during the next 6 months to 2 years; done by middle management
Value statement (2 things)
- What the company stands for: its core priorities, the values its employees embody, and what its products contribute to the world
- What values do we want to emphasize?
Vision
A long-term goal describing “what” an organization wants to become; it is a clear sense of the future and the actions needed to get there
Vision statement (3 things)
Statement that expresses what the organization should become and where it wants to go strategically
- A clear sense of the future and the actions needed to get there
- What do we want to become?
- Where do we want to go
A business model contains what 2 things:
- Customer value proposition
- Profit formula
Without a viable (successful) business model, the firm may fail to what?
- Attract customers
- Withstand or beat competition
- Survive due to lack of profitability
Typically, strategy consists of a company’s action plan for outperforming its what?
its competitors and achieving superior profitability
Why are Planning and Strategic Planning Important? (3 things)
- Provide direction and momentum
•Encourage new ideas
•Develop a sustainable competitive advantage
Planning and strategic management consists of what?
- Establish the mission and vision and values
- Assess the current reality
- Formulate the grand strategy and strategic, tactical, and operational plans
- Implement the strategy
- Maintain strategic control
The Specific in SMART Goals means what
Goals should be stated in specific rather than vague terms.
Measurable in SMART Goals means what?
Whenever possible, goals should be measurable, or quantifiable
Attainable in SMART Goals means what?
Goals should be challenging, of course, but above all they should be realistic and attainable
Results- oriented in SMART Goals means what?
Only a few goals should be chosen for any work unit. And they should be results-oriented—they should support the organization’s vision
Target dates in SMART Goals means what?
Goals should specify the target dates or deadline dates when they are to be to be obtained
Management by objectives (4 steps)
1.Managers and employees jointly set objectives for the employee
2.Managers develop action plans
3.Managers and employees periodically review the employee’s performance
4.Managers make a performance appraisal and reward the employee according to the result
What are the 3 objectives used in MBO
Performance
Behavioral
Learning
Performance objectives
Focus: Express the objective as an outcome or end-result
Examples: “Increase sport utility sales by 10%.” “Reduce food spoilage by 15%.”
Behavioral objectives
Focus: Express the objective as the behaviors needed to achieve an outcome
Examples “Greet all potential automobile customers with a smile and offer to assist.” “Ensure food is stored in seal-proof containers.
Learning objectives
Focus: Express the objective in terms of acquiring knowledge or competencies
Examples “Attend sales training class.” “Learn how the features in our sports utility vehicles compare to competitors.”
For MBO goal- setting to succeed, the following 3 things that need to happen are…
1.Top management must be committed to it
2.Goals must be applied consistently throughout the organization
3.Goals must “cascade” down through the organization
What are the 4 -parts of the planning and control cycle
- Make the plan
- Carry out the plan
- Control the direction by comparing the results with the plan
- Control the direction in 2 ways:
(1) correcting deviations in the plan being carried out (return to step 2) OR
(2) improving future plans (go to plan 1 to start over)
