How and why managers plan
What is planning?
The process of setting objectives and determining how to best accomplish them.
What are the differences between short, intermediate-, and long-range plans?
•Short-range plans = 1 year or less
•Intermediate-range plans = 1 to 2 years
•Long-range plans = 3 or more year
Explain forecasting
•Making assumptions about what will happen in the future.
•Qualitative forecasting uses expert opinions.
•Quantitative forecasting uses mathematical and statistical analysis.
•All forecasts rely on human judgment.
•Planning involves deciding on how to deal with the implications of a forecast.
Explain controlling in terms of planning for an outcome
•The process of measuring performance and taking action to ensure desired results.
•Has a positive and necessary role in the management process.
•Ensures that the right things happen, in the right way, at the right time.
•Organizational learning and after-action review
Explain management by objectives (MBO)
Definition- is a process of joint objective setting between superior and subordinate
•A structured process of regular communication.
•Supervisor/team leader and workers jointly set performance objectives.
•Supervisor/team leader and workers jointly review results
Objectives identify the specific results or desired outcomes that one intends to achieve.
What are strategic plans?
Strategic plans set broad, comprehensive, and longer-term action directions for the entire organization.
What is contingency planning?
Contingency planning
•Identifying alternative courses of action that can be implemented to meet the needs of changing circumstances.
•Contingency plans anticipate changing conditions.
•Contingency plans contain trigger points.
What are the 4 steps in the control process
•Step 1— establish objectives and standards.
•Step 2 — measure actual performance.
•Step 3 — compare results with objectives and standards.
•Step 4 — take corrective action as needed.
What is the MBO process?
•Supervisor and workers jointly set objectives, establish standards, and choose actions.
•Workers act individually to perform tasks; supervisors act individually to provide necessary support.
•Supervisor and workers jointly review results, discuss implications, and renew the MBO cycle.
What is a plan?
A plan is a statement of action steps to be taken in order to accomplish the objective
What are operational plans?
Operational plans — define what needs to be done in specific areas to implement strategic plans
Explain scenario planning.
Scenario planning
•A long-term version of contingency planning.
•Identifying alternative future scenarios.
•Plans made for each future scenario.
•Increases organization’s flexibility and preparation for future shocks
What is the difference between output and input standards?
Output standards
•Measure performance results in terms of quantity, quality, cost, or time.
Input standards
•Measure effort in terms of the amount of work expended in task performance.
What is discipline and how should it be applied in the workplace?
Discipline is the act of influencing behavior through reprimand
•Be immediate.•Be directed toward actions, not personality.•Be consistently applied.•Be informative.•Occur in a supportive setting.•Support realistic rules.
A benefit of planning is that it improves coordination: Accomplishments add up to meaningful contributions to the needs of the organization as a whole.
Creates a means-ends chain. What is a means-ends chain?
A means-ends chain or hierarchy of objectives is when lower-level objectives (means) lead to the accomplishment of higher-level ones (ends).
What is the difference between standing plans, policies and rules or procedures
Standing plans- Policies and procedures that are designed for repeated use.
Policy- Broad guidelines for making decisions and taking action in specific circumstances.
Rules or procedures -Plans that describe exactly what actions are to be taken in specific situations.
What is benchmarking?
Benchmarking
•Use of external comparisons to better evaluate current performance and identify possible actions for the future.
•Adopting best practices of other organizations that achieve superior performance.
When comparing results, what are three ways to compare?
Comparison methods:
•Historical comparison
•Relative comparison
•Engineering comparison
Explain the break-even point as a business control.
Determination of the point at which sales revenues are sufficient to cover costs.
•Break-Even Point = Fixed Costs / (Price – Variable Costs
What are the benefits of planning?
1. Improves focus and flexibility
2. Improves action orientation
3. Improves coordination
4. Improves time management
5. Improves control
Explain the differences between single-use plans, budgets and projects.
•Single-use plans- Only used once to meet the needs and objectives of a well-defined situation in a timely manner.
•Budgets- Single-use plans that commit resources to activities, projects, or programs. Fixed, flexible, and zero-based budgets.
•Projects- One-time activities that have clear beginning and end points.Project management and project schedules.
What are the benefits of including employees in the planning process?
•Promotes creativity in planning.
•Increases available information.
•Fosters understanding, acceptance, and commitment to the final plan.
Explain feedforward controls, concurrent controls, and feedback controls
Feedforward controls
•Employed before a work activity begins.
Ensures that:
•Objectives are clear.
•Proper directions are established.
•Right resources are available.
•Focuses on quality of resources.
Concurrent controls...•Focus on what happens during work process ongoing operations to make sure they are being done according toplan. •Can reduce waste in unacceptable finished products or services.
Feedback controls
•Take place after work is completed.
•Focus on quality of end results.
•Provide useful information for improving future operation
Explain purchasing control, inventory control, and statistical quality control.
Purchasing control- Leveraging buying power. Committing to a small number of suppliers. Working together in supplier-purchaser partnerships
Inventory control- The goal is to ensure that inventory is just the right size to meet performance needs, thus minimizing the cost.
Statistical control- Quality control involves checking processes, materials, products, and services to ensure that they meet high standards.