Unit 16 Flashcards
Planning, strategy and strategic management
Planning: Coping with Uncertainty
Setting goals and deciding how to achieve them; coping also with uncertainty by formulating future courses of action to achieve specified results.
Strategy: Setting Long-Term Direction
A large-scale action plan that sets the direction for an organization.
What long-term goals to set for the prosperity of the organization.
Strategic Management: is a process that involves managers from all parts of the organization—top managers, middle managers, first-line managers, and team leaders—in the formulation, implementation, and execution of strategies and strategic goals to advance the aims of the organization.
How planning and strategic management unfold
- Establish the mission ,vision and values.
- Assess the current reality.
- Formulate the grand strategy and strategic, tactical, and operational plans.
- Implement the strategy.
- Maintain strategic control.
Why are planning and strategic management important?
Providing Direction and Momentum
Unless a plan is in place, managers may well focus on just whatever is in front of them to formulate future courses of action to achieve specified results.
Basically, they need to take a long-range view and act more quickly than competitors.
Bad planning may result from faulty assumptions about the future, poor assessment of an organization’s capabilities, failure to use management control as a feedback mechanism, etc…
Encouraging New Ideas
In the planning stage, new ideas can be encouraged by stressing the importance of innovation in achieving long-range success.
Developing a Sustainable Competitive Advantage
Because they can provide a relevant competitive advantage, i.e. the ability of an organization to produce goods or
services more effectively than its competitors, thereby outperforming them.
Competitive advantage
The ability of an organization to produce goods or services more effectively than its competitors, thereby outperforming them.
Sustainable competitive advantage
Occurs when an organization is able to get and stay ahead in four areas:
1. In being responsive to customers
2. In innovating the way they deliver or provide better goods/services
3. In quality
4. In effectiveness (capability of producing a desired result)
Fundamental of planning: Mission and Vision
Planning consists of translating an organization’s mission and vision into objectives. The organization’s purpose is expressed as a mission statement, and what it becomes is expressed as a vision statement; both should represent the organization’s values, expressed in a values statement.
Mission
The Mission Statement: “What Is Our Reason for Being?”
An organization’s mission is its purpose or reason for being.
• Determining the mission is the responsibility of top management and the board of directors.
• It is up to them to formulate a mission statement, which expresses the purpose of the organization
Vision
The Vision Statement: “What Do We Want to Become?”
A vision is 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.
A vision should describe what’s happening to the world you compete in and what you want to do about it.
Value
The Value Statement:
“What Values Do We Want to Emphasize?”
Values are the relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behavior: integrity, dedication, excellence, compassion, or other.
Values reflect the qualities that represent an organization’s deeply held beliefs, highest priorities, and core guiding principles.
Value statements become the deeply ingrained principle and fabric that guide employee behavior and company decisions and actions—the behaviors the company and employees expect of themselves.
Top management
Top management includes chief executive officer,president,vicepresident, general managers, and division heads. Top management takes part in strategic planning, lasting one to five years. They make long-term decisions about the overall direction of the organization. Managers need to pay attention to the environment outside the organization, be future oriented, deal with uncertain and highly competitive conditions.
Middle management
Middle management includes functional managers,product-line managers, and department managers. They deal with tactical planning which can take from six to twenty-four months. They implement policies and plans of top management, supervise and coordinate activities of first-line managers below, make decisions often without base of clearly defined information procedures.
First line management and team leaders
First line management and team leader includes unit managers and first-line supervisors. They implement operational planning, taking one to fifty-two weeks. They direct daily tasks of non-managerial personnel; decisions are
often predictable, and follow well-defined set of routine procedures.
Goals and plans
The purpose of planning which is to set a goal and then an action plan. There are two types of goals, short-term and long- term, and they are connected by a means-end chain. Finally, it’s important to understand that the proper execution of a plan is just as important as properly developing it.
Goal
A goal, also known as an objective, is a specific commitment to achieve a measurable result within a stated period of time.
Long-term goals
Long-term goals are generally referred to as strategic goals. These tend to span one to five years and focus on achieving the strategies identified in a company’s strategic plan.
