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GMS. chap 6 notes.doc

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OCAD University
Global Management
Ashley Scarlett

Chapter 6: Planning Processes and Techniques WHY AND HOW MANAGERS PLAN Planning: process of setting objectives and determining how best to accomplish them The Planning Process Objectives: identify the specific results or desired outcomes that one intends to achieve Plan: a statement of action steps to be taken in order to accomplish the objectives Steps in the planning process: 1. Define your objectives 2. Determine where you stand vis-à-vis objectives 3. Develop premises regarding future conditions 4.Analyze and choose among action alternatives 5. Implement the plan and evaluate results Benefits of Planning Improves: •focus and flexibility •action orientation •coordination •time management •coordination and control TYPES OF PLANNING USED BY MANAGERS Long- Range and Short- Range Plans Short-range plans = 1 year or less Intermediate-range plans = 1 to 2 years Long-range plans = 3 or more years • People vary in their capability to deal effectively with different time horizons • Higher management levels focus on longer time horizons Strategic and Tactical Plans Strategic Plans Strategic plan: these are longer‐term plans that set broad directions for an org. and create a framework for allocating resources for maximum long‐term performance impact Vision: clarifies the purpose of the org. and expresses what it hopes to be in the future, and it involves determining the goals and objectives that will be pursued in order to accomplish that vision Tactical Plans 1 Tactical plans: developed and used to implement strategic plans • They tend to be intermediate‐term plans that specify how the org.'s resources can be used to put strategies into action Functional plans that indicate how different components of the enterprise will contribute to the overall strategy Functional plans might include: Operational Plans Operational plans describe what needs to be done in the short term and in response to different situations Policies and Procedures Policy: communicates broad guidelines for making decisions and taking action in specific circumstances Procedures or rules: describe exactly what actions are to be taken in specific situations • Policy sets a broad guideline, procedures define precise actions to be taken. Budgets Budgets: are single‐use plans that commit resources for specific time periods to activities, projects, or programs • Managers typically spend a fair amount of time bargaining with higher levels to get adequate budgets to support the needs of their work units or teams Managers deal with and use a variety of budgets: Financial budgets project cash flows and expenditures Operating budgets plot anticipated sales or revenues against expenses Non‐monetary budgets allocate resources like labour, equipment, and space Fixed budget allocates a stated amount of resources for a specific purpose, Flexible budget allows resources to vary in proportion with various levels of activity Zero‐based budget: approaching each new budget period as it if were brand new. In zero‐based budgeting • No guarantee that any past funding will be renewed • All proposals must compete anew for available funds at the start of each new budget cycle PLANNING TOOLS AND TECHNIQUES The benefits of planning are best realized when the foundations are strong. Among the useful tools and techniques of managerial planning are forecasting, contingency planning, scenarios, benchmarking, and the use of staff planners. Forecasting Forecasting: Making assumptions about what will happen in the future • Aforecast is a vision of the future • Qualitative forecasting • Qua
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