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Module 2 Planning
Understand planning and different types of planning Understand benefits and drawbacks of planning Differentiate different strategy types Understand SWOT, BCG, and Port’s Five Forces ModelUnderstand what is meant by Management by Objectives and Six Sigma
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What is planning?
Define Organizational objectives or goals Establish an overall strategy for achieving these goals Develop a hierarchy of plans to integrate and coordinate activities
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Why do we need planning
Provide direction Reduce uncertainty Coordinate activities Reduce wastes and redundancy Reduce the impact of change Set the standards to facilitate control
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Drawbacks of planning
May create rigidity May reduce flexibility Can’t replace intuition and creativity Managers may focus on today’s competition rather than tomorrow’s survival Focusing solely on today’s success may lead to tomorrow’s failure
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Do we need planning?
Focus on the quality of planning Seek opportunities Look for weakness Focus on customers Allow flexibility Encourage creativity
Implement planning
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Categories of planning
Breath Time Frame Specificity Frequency
of Use
strategic Long-term Directional Single
Tactical Short-term Specific Standing
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Types of plans
Mission or purpose – basic function or task
For example, mission of Markham Stouffville Hospital (MSH)
To achieve excellence in the provision of health carethat is compassionate, patient and family-centred, andconsistent with the needs of Markham, Stouffville andneighboring communities.
Fundamental to our mission is a commitment that eachvisit to Markham Stouffville Hospital will be a greatexperience.
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Types of plans (Contd.)
Objectives or goals – ends toward which activity is aim (i.e., results to be achieved)
MSH example:It is our goal that the Hospital will continue
to operate below our Expected Cost per
Weighted Case while providing high quality care
to our community.
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Types of plans (Contd.)
Strategies – outline general action and deployment of resources to attain objectives
MSH example:Strategy priorities:1. Great care and customer service2. Great place to work3. Great partner
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Types of plans (Contd.)
Policies – general statements or understandings which are officially agreed on by authority and which is used as a basis for making decisions
For example, privacy policy, vacation policy
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Types of plans (Contd.)
Procedures – establish a required method of handling future activities
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Types of plans (Contd.)
Rules – spell out specific required actions or nonactions, allowing no discretion
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Types of plans (Contd.)
Programs – a complex of goals, policies, procedures, rules, task assignments to be taken, resources to be employed, and other elements necessary to carry out a given course of action
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Types of plans (Contd.)
Budget – a statement of expected results expressed in numerical terms
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Purpose
Objectives
Strategies
Policies
Procedures
Rules
Programs
budgets
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Management by Objectives (MBO)
MBO: a system in which specific performance objectives are jointly determined by subordinates and their superiors Four key elements: goal specificity, participative decision making, an explicit time period, and performance feedback
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Benefits of MBO
Align organizational goals with individual goals Make employees feel achievement Make realistic goals Help identify problems and opportunities Push forward
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Criticism about MBO
Focus on short-term goals rather than long-term goals Lack of team spirit Danger of inflexibility Fear of punishment Overuse quantitative goals
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How to overcome drawbacks
Set up multiple goals Reward for setting difficult goals Prioritize goals Continuous monitoring Fast feedback
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The Strategic Management Process
Set Mission,Objectives,
and Strategies
FormulateStrategies
Analyze theEnvironment
Identify Opportunitiesand Threats
Analyze Resources
IdentifyStrengths andWeaknesses
ReassessMission andObjectives
ImplementStrategies
EvaluateResults
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SWOTSWOTAnalysiAnalysi
ss
WeaknessesWeaknessesThreatsThreats
OpportunitiesOpportunities
StrengthsStrengths
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Porter’s five forces model
Competitive Battleground
New Entrants
Suppliers Buyers
Substitute products or services
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Boston Consulting Group (BCG) analysis
High
Low
Market Growth
Low High
Wild cat Star
Dog Case cow
Market Share
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RetrenchmentRetrenchmentCombinationCombinationCombinationCombination
The Grand StrategiesThe Grand StrategiesThe Grand StrategiesThe Grand Strategies
StabilityStabilityStabilityStabilityGrowthGrowthGrowthGrowth
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ImplementationImplementation
EvaluationEvaluation
What HappensAfter
StrategiesAre
Formulated?
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BenchmarkingBenchmarking
Quality As Quality As A StrategicA Strategic
WeaponWeaponISO 9000ISO 9000
Six Sigma (6Six Sigma (6))
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“[Six Sigma - The Breakthrough Strategy] is the most important initiative GE has ever taken…it is part of the genetic code of our future leadership.” – Jack Welch, CEO, GE