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GMS 200 (566)
Chapter 6

Chapter 6 - Planning Processes and Techniques.docx

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Ryerson University
Global Management Studies
GMS 200
Franklin Ramsoomair

Chapter 6: Planning Processes and Techniques ● Planning – the process of setting objectives, deciding how to accomplish them. ● Five steps in the planning process are: 1) Define your objectives 2) Determine where you stand in your objectives 3) Develop your premises regarding future conditions 4) Identify and choose among alternative ways of accomplishing objectives 5) Implement action plans and evaluate results ● Objectives – specific results that one wishes to receive ● Plan – a statement of intended means for accomplishing objectives ● The roles of planning and controlling in the management process. o Planning – to set the direction - decide where you want to go - decide how best to go about it o Organizing – to create structures o Controlling – to ensure results - measure performance - take corrective action o Leading – to inspire effort ● Benefits of planning o Improves focus and flexibility o Improves action orientation o Improves coordination and control o Improves time management ● Strategic Plans – identifies long-term directions for the organization o A vision clarifies the purpose of the organization and expresses what it hopes to be in the future ● Tactical Plans – helps to implement all or parts of a strategic plan o Indicate how different components of the enterprise will contribute to the overall strategy. Such plans 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 resource plans – dealing with building a talented workforce ● Operational plans – identifies short-term activities to implement strategic plans o Policy – a standing plan that communicates broad guidelines for decisions and action o Procedure or Rule – precisely describes actions that are to be taken in specific situations o Budget – a single-use plan that commits resources to projects or activities - 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 budgets – allocates a stated amount of resources for a specific purpose - flexible budgets – allows resources to vary in proportion with various levels of activity o Zero-based budgeting – allocates resources as if each budget were brand new - i.e. When a manager is asked to justify a new budget proposal on the basis of projected activities rather than past practices. ● The first step to planning is to establish objectives and standards. ● Standing use plans - Companies may
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