Chapter 5 Notes Flashcards
(19 cards)
Planning
Setting goals and deciding how to achieve them
What is a business plan?
A document that outlines a proposed firms goals, the strategy for achieving them and the standards for measuring success
Business model?
An outline of the need the firm will fill and its operations, functions and financials of the business.
Strategy
A large-scale action plan that sets the direction for an organization, basically a professional educated guess.
Strategic Management
A process that involves managers from all parts of the organization
Who does strategic planning?
Top Managers- they determine the orgs long term goals for the next 1-5 years
Who does Tactical Planning?
Middle Managers- determine what contributions their dept can make within the next 6-24 months
Who does operational planning?
First Line Managers-determine how to finish tasks within the next 1-52 weeks
Why is planning and strategic planning important?
To provide direction and momentum, to encourage new ideas and develop a sustainable competitive advantage.
Sustainable Competitive Advantage occurs when companies can get ahead in what 4 areas?
Being responsive to customers, innovation, quality and effectiveness.
What are missions?
An organizations purpose or reason for being
Mission statement?
The purpose of the organization, which must be clear and identifiable
Vision?
A long term goal that describes what an organization wants to become
The vision statement?
Expresses what the org should become and where it wants to go
What is a SMART goal?
A goal that is specific, measurable, attainable, results-oriented and has Target dates
What is management by objectives?
A four step process suggested by Peter Drucker where managers and employees jointly set objectives for the employee, managers develop action plans, managers and employees periodically review the employee’s performance, the manager makes a performance appraisal and rewards the employee according to results.
What are the three types of objectives used in MBO?
Improvement, Personal development, and Maintenance
In order for MBO to be successful, what three things have to happen?
Top management must be committed, applied organizationwide, and objectives must cascade, becoming more specific at lower levels of the organization.
What are the 4 steps of the planning/control cycle?
Make the plan, Carry out the plan, Control the direction by comparing results and control the direction by taking corrective action.
