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Chapter 6 - Planning Processes and Techniques.docx

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Global Management Studies
GMS 200
Shavin Malhotra

Chapter 6: Planning Processes and Techniques Transferring Convicts Towards the end of the 18 century, England began sending convicts to Australia The transportation was privately provided by publicly funded A lot of convicts died along the way, from diseased due to overcrowding, poor nutrition and little or no medical treatment Between 1790 and 1792, 12% of the convicts died, to the dismay of many good-hearted English men and women Some entrepreneurial captains hoarded food and medicine meant for the convicts and sold them upon arrival in Australia Question: How might captains be convinced to take better care their human cargo? - Above a salary (incentive for every person that arrives alive) - Establish a consequence in terms of the parameters - The government decided to pay the captains a bonus for each convict that walked off the boat in Australia alive - This simple changed worked like a charm. Mortality fell to virtually zero. In 1793, on the first three boats making the trip to Australia under the new set of incentives, a single convict died out of 322 transported, an amazing improvement Chile Hyperinflation During a period of hyperinflation in Chile, the story is told that the governments imposition of a maximum price made it unprofitable fir suppliers to sell bread the legal maximum was below the cost of production A simple prediction would be that bread would disappear from the shelves If you were a baker, how might you respond? - Make small loaves of bread - Their response was to shrink the loaf of bread until the cost of a loaf fell below the legally mandated price - So the enterprising bakers sold the raw dough in bags with water so the minimum weight could be achieved Disney: European Journey Until 1992, the Walt Disney Company had experienced nothing but success in the theme park business Its first park, Disneyland, opened in Anaheim, California, in 1955 In the 1970s, the triumph was repeated in Florida, and in 1983, Disney proved the Japanese also have an affinity for Mickey Mouse with the successful opening of Tokyo Disneyland Disney executives in 1986 turned their attention to France and, more specifically, to Paris, the self-proclaimed capital of European high culture and style Why Paris? The French government expecting the project to create 30,000 jobs and to contribute $1 billion a year offered - Land at 1971 prices - Provided $750 million in loans at below-market rates - Spend millions of dollars on subways and railroads connecting Europe to Disneyland - E.g. Brussels will only be 90 minutes by train - Number of people within 2-6 hours of the Paris site (within a 2 hour drive 17 million people, within a 4 hour drive 41 million people, within a 6 hour drive 109 million people, within a 2 hour flight 310 million people) To Summarize: To open in 1992 $4.4 billion enterprise over 5,000 acres and will grow in next two years to an area one-fifth of Paris itself 6 hotels and 5,200 rooms more rooms than the entire city of Cannes Second largest construction project in Europe after the English Channel tunnel Projections: 11 million Europeans would visit Disneyland in the first year alone - Normally 2.7 million Europeans visit US Disney parks - Europeans have more vacation time (4 to 5 weeks) than Americans (2 to 3 weeks) Disney executives - My biggest fear is that we will be too successful - I dont think it can miss. They are masters of marketing. When the place opens it will be perfect Decision Time 1) What would you decide and why? Would you go ahead now? 2) Would you require any other data for your decision? Which ones? 3) Would you price tickets at par with Florida or lower or higher than Florida? Why?Results First year 12 million visitors more than the projections The tickets were priced higher than those in Florida Yet, revenue projections were not met Why? Unlike Americans, Europeans were far more frugal They packed their own food and shunned the Disney hotels Hotels were very expensive, as a result unlike Americans who on average spent more than four days, Europeans were spending only two days at best What is planning? It is the process of deciding today what has to be done today to be ready for tomorrow Planning is the process of collecting information and making decisions by which management formulates objectives, and chooses the pattern of action to achieve those objectives Objectives o Identify the specific results or desired outcomes that one intends to achieve. Plan o A statement of action steps to be taken in order to accomplish the objectives. The planning process 1. 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, or know how far off the mark you are at various points along the way 2. Determine where you stand vis--vis objectives evaluate current accomplishments relative to the desired results. Know where you stand in reaching the objectives; know what strengths work in your favour and what weaknesses may hold you back 3. Develop premises regarding future conditions anticipate future events. Generate alternative scenarios for what may happen; identify for each scenario things that may help or hinder progress toward your objectives 4. Analyze alternatives and make a plan list and evaluate possible actions. Choose the alternative most likely to accomplish you objectives; describe what must be done to follow the best course of action 5. Implement the plan and evaluate results take action an
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