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GMS - chapter six.docx

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Department
Global Management Studies
Course
GMS 200
Professor
Horatio Morgan
Semester
Winter

Description
Chapter Six – Planning Processes and Techniques Why and how managers plan?  Planning – The process of setting objectives and determining how to accomplish them (provides a sense of direction). Importance of Planning:  Organizing – allocating and arranging resources to accomplish tasks.  Leading – guiding the efforts of human resources to ensure high levels of task accomplishments  Controlling – Monitoring task accomplishments and taking necessary corrective action The planning process:  Planning should focus on objectives that identify the specific results or desired outcomes that one intends to achieve. Planning should also create a real plan – a statement or intended means for accomplishing objectives.  The decision making process: o Define your objectives – Identify desired outcomes or results in very specific ways. Know where you want to go; be specific enough that you will know you have arrived when you get there. o Determine where you stand – Evaluate current accomplishments relative to the desired results o Develop premises regarding future conditions – Anticipate future events. o Analyze alternatives and make a plan – List and evaluate possible actions o Implement the plan and evaluate results – Take action and carefully measure your progress towards objectives. Benefits of planning:  Planning improves focus and flexibility – Good planning improves focus and flexibility – important for performance success. An organization with focus knows what it does best, and the needs of customers.  Improves Action Orientation – Planning helps people and organizations stay ahead of the competition and become better at what they are doing. It keeps the future visible as a performance target and reminds us that best decisions are those that have solutions beforehand.  Improves coordination and control – Plans should be coordinated among people and subsystems combined accomplishments will advance performance. o Planning facilitates control. The first step in the planning process is to set objectives and standards. Without planning, control lacks objectives and standards for measuring how well things are going and what could be done to make them better. Without control, planning lacks the follow-through needed to ensure that things work out as planned. Planning and Time Management:  The key to success is time management. One must be able to allocate their time wisely. Types of Plans used by Managers:  Managers use a variety of plans as they face different challenges in the flow and pace of activities of organizations. o Planning environment is stable and predictable or dynamic and uncertain.  Long range plans – look into three or more years into the future. o Unless everyone understands organizations long-term plans, there is always a risk that the pressures of daily events will entertain attention from different tasks.  Intermediate – one to two years  Short-range plans – cover one year or less.  Elliot Jacques suggested that people vary in their capability to think with different time horizons. o Most people work comfortably with only 3-month time spans o A smaller group works with a 1-year span o And the rare one can handle a 20-year frame Strategic and Tactical Plans:  Senior executives deal mainly with strategic plans; managers deal with tactical plans; at lower levels, manager’s focus on operating plans.  Strategic Plans: identifies long-term directions for the organization. These are longer-term plans that set broad directions for an organization and create a framework for allocating resources for maximum long- term performance impact. o Strategic planning is a part of the strategic management process. o It begins with a vision that clarifies the purpose of the organization and expresses what it hopes to be in the future.  Tactical Plans: People enter the world with strategies. The goal is clear and long term. o Tactical plans help to implement all or parts of strategic plans. They tend to be intermediate-term plans that specify how the organization’s resources can be used to put strategies into action. o Tactical plans take the form of functional plans that indicate how different components of the enterprise will contribute to the overall strategy. Such functional might include:  Production plans – dealing with work methods and technologies  Financial plans – dealing with money and capital investments  Facilities plans – dealing with facilities and work layouts  Logistics plans – dealing with suppliers and acquiring resource inputs  Marketing plans – dealing with selling and distributing goods or services  Human resources plan – dealing with building a talented workforce Operational Plans:  Identifies short-term activities to implement strategic plans. Policies and Procedures:  A policy communicates broad guidelines for making decisions and taking action in specific circumstances. It communicates broad guidelines for decisions and action. o Organizations operate with lots of policies, and they set expectations for many aspects of employee behavior.  Procedures or rules – Precisely describes actions that are to be taken in specific situations. They are usually stated in employee handbooks and often called “SOP” – standard operating procedures. o A policy sets a broad guideline, and procedures define precise actions to be taken.  Budget – A plan that commits resources to projects or activities. Managers spend a fair amount of time bargaining with higher levels to get budgets to support the needs of their work units or teams. o Managers use many different types of budgets:  Financial budgets – project cash flows and expenditures  Operating budgets - plot anticipated sales or revenues against expenses.  Nonmonetary budgets – allocate resources like labor, equipment, and space  Fixed budgets – Allocates a stated amount of resources for a specific purpose  Flexible budgets – allows resources to vary in proportion o All budgets link planned activities with resources needed to ac
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