Download Mgmt 500 Module 3 summary

Module summary:
Planning is the process of determining how the organization can get where it wants to
go. The fundamental purpose of planning is to help the organization reach its objectives.
Advantages of planning include: (1) an emphasis on the future, (2) coordination of
decisions, and (3) a clear focus on the objectives. If done incorrectly or excessively,
planning can be disadvantageous, but its benefits outweigh its disadvantages. The six
steps of the planning process are: (1) stating objectives, (2) listing alternatives, (3)
developing premises, (4) choosing alternatives, (5) developing plans to pursue the
chosen objective, and (6) putting the plan into action.
A decision is a choice made between two or more available alternatives. There are two
basic types of decisions which are at the opposite ends of a continuum: (1) programmed
decisions are routine and repetitive, and (2) nonprogrammed decisions are one-shot
occurrences and are usually less structured than programmed ones. The scope of the
decision is the proportion of the total management system that a particular decision will
affect. The broader the scope of a decision, the higher the level of the manager
responsible for making that decision. With decisions through consensus, everyone
agrees.
Strategic planning is long-term planning that focuses on the organization as a whole. To
determine how far into the future they should plan, managers should use the
commitment principle. Strategy is the end result of strategic planning. Strategic
management is the process of ensuring that an organization possesses and benefits
from the use of an appropriate organizational strategy. It consists of five sequential and
continuing steps: (1) environmental analysis, (2) the establishment of organizational
direction, (3) strategy formulation, (4) strategy implementation, and (5) strategic control.
The successful implementation of strategy requires four skills: (1) interacting skills, (2)
allocating skills, (3) monitoring skills, and (4) organizing skills. The last step, strategic
control, focuses on ensuring that all steps of the strategic management process are
appropriate, compatible, and functioning properly. Tactical planning should reflect
strategic planning. Tactical planning focuses on what to do in the short-term to help the
organization achieve the long-term objectives determined by strategic planning. As
managers move from lower to upper management, they spend more time on strategic
planning and less time on tactical planning.
A plan is a specific action proposed to help the organization achieve its objectives. A
plan has four dimensions: (1) repetitiveness, (2) time, (3) scope, and (4) level. Using the
repetitiveness dimension as a guide, organizational plans are usually either standing
plans or single-use plans. Three specific types of standing plans are policies,
procedures, and rules. Single-use plans, on the other hand, are exemplified by
programs designed to carry out a special project and budgets.
Managers should know what causes plans to fail and should take appropriate steps to
prevent plan failure. A comprehensive organizational plan includes plant facilities
planning and human resource planning. Both are types of input planning.
Planning tools are techniques that managers can use to help develop plans.
Forecasting involves predicting the future organizational environment. Sales forecasting
is the most important form of organizational forecasting. Methods of sales forecasting
include: (1) the jury of executive opinion method, (2) the sales force estimation method,
and (3) the time series analysis method. Scheduling is another commonly used planning
tool. It involves the listing of activities for reaching an objective. Two frequently used
scheduling methods are Gantt charts and the program evaluation review technique
(PERT).