U3 Ch.10-12 Activities

Question 1

SMART plans

Answer 1

All plans should be SMART:
-Specific
-Measurable
-Achievable [realistic]
-Relevant [to business goals]
-Timed [target date]

Question 2

Steps in planning

Answer 2

1. Assess the current situation (SWOT)
2. Set a goal (short/long term)
3. Create plan
4. Implement plan
5. Review plan

Question 3

mission statement

Answer 3

short written statement that sets out the firm’s overall goal for the lifetime of the business

Question 4

Types of plan

Answer 4

Strategic
Tactical
Operational
Contingency
Human Resource / Manpower
Financial
Mission statement
Marketing plan

Question 5

Strategic Plan

Answer 5

usually up to 5 years long term goals written by senior management. Breaks down mission statement into long-term plans. E.g. Increase market share by 25% in the next five years

Question 6

Tactical Plan

Answer 6

1-2 years short term goals written by middle management. Breaks strategic plan into short-term plans. Makes the strategic plan possible. E.g. Launch new advertising campaign in the next 12 months

Question 7

Operational Plan

Answer 7

Outline daily, weekly or monthly targets written by all management levels. Plans for daily running of a business. E.g. weekly and monthly objectives for marketing/production

Question 8

Contingency Plan

Answer 8

0-1 year written by all management levels. Back-up plans used to deal with unforeseen events or emergencies. E.g. if suppliers cannot provide raw materials, source materials from another supplier

Question 9

Human Resource (Manpower) Plan

Answer 9

0-1 year written by HR manager. Ensures business has correct no. of employees, with correct skills and qualifications to fill all roles

Question 10

Financial Plan

Answer 10

0-1 year written by Finance manager. Prepare cash flow forecasts to predict income received and spent in a period.

Question 11

Stakeholders and Planning

Answer 11

1. Investors (financial plan shows business can repay loans. It also shows projected profits which could lead to more dividends for shareholders)
2. Employees (HR planning can indicate promotion opportunities and encourage them to work harder)
3. Suppliers (Strategic+Tactical plans can indicate intention to expand allowing them to prepare more raw materials)

Question 12

Benefits of planning

Answer 12

1. Create Awareness & Give Direction. (All staff aware of targets)
2. Helps decision making (long term objectives help make the most effective decisions)
3. HR planning (avoids shortages and identifies when staff recruitment is needed)
4. Benchmarking (monitor progress by comparing target with results)
5. Obtain Finance