Advanced Organizational Management Chapter 2

1. Advanced Organizational ManagementChapter 2 Strategic Planning – Mission and Values

2. Overview • Planning is the most important and basic management function • Involves setting objectives and then establishing policies, procedures and action plans • Strategic planning establishes the direction the organization will take over a long term • Involves developing goals for the future that reflect current threats and opportunities • Match the strength and weakness of the organization • Quality planning identifies the needed resources, both current and future, including space, materials, equipment and human

3. A. Organizational Planning • Planning is one of the primary management functions or an organization • Planning entails establishing objectives and then setting policies, procedures, and action plans to achieve objectives • Types of Planning – four main types: • Strategic planning – long term; • Tactical planning – short term; • Operational planning – day-to-day; • Contingency planning – coping with unforeseen

4. A. Organizational Planning (cont’d) • Strategic planning • establishes long-term goals agreed upon by the entire organization • Establishes clear parameters for recognizing and achieving success • Directs a process of continuous adaptation • Formal process of planning to fit the mission and values of the organization • Done by upper level management – does not work well without support from the top managers

5. A. Organizational Planning (cont’d) • Tactical planning – involves setting short-term goals that show how to achieve the broad objectives specified in the strategic plans • Operational planning – involves first-line managers conducting day-to-day activities necessary to achieve longer term tactical and strategic goals • Contingency planning – involves developing action plans to help organizations cope with any unforeseen events that may arise

6. A. Organizational Planning (cont’d) • Strategic Planning Process: • First steps – first goal is to clarify a vision and a mission of the organization • Mission – most broadly stated objective of an organization is called its mission; basic purpose for the organization’s existence! • Senior management determines its mission; all managers are responsible for understanding, communicating and implementing the mission • Strategy – describes the plan the general or team manager or planner has for using the organization’s resources to achieve a specific objective

7. A. Organizational Planning (cont’d) • Three levels of strategy: • Corporate-level – involves the entire corporate organization (General Motors, for example) • Business-level – involves the independent business unit of a larger company (Cadillac, a division of GM) • Functional – departments within a business unit can also have goals, objectives, and mission statements (GM engineering group)

8. A. Organizational Planning (cont’d) • Data Collection and Analyses • Crucial to the process of strategic planning • Universal approach to analysis is called SWOT analysis • SWOT = stands for strengths, weaknesses, opportunities and threats for the organization • System used to scan the environment and understand the factors that will affect the strategy designed • SWOT analysis is a long-standing technique used by co’s for planning • Every aspect of the business is included in the analysis: 1) business activity, 2) goals, 3) resources, 4)weaknesses

9. A. Organizational Planning (cont’d) • Conducting SWOT • Task force engages in a session that looks like brainstorming or a focus group • Posting lists of strengths, weaknesses, opportunities and threats • Participants vote • Leader guides group through discussion of outcome • Tabulating the SWOT • Internal and external audits – another method used for analyzing a corporation’s strengths and weaknesses • Internal audit reviews the mission statement and the degree of success the business mission has had • External audit addresses five categories: economic forces, social forces, political forces, technological forces and competitive forces

10. A. Organizational Planning (cont’d) • Gap Analysis measures the gap between perception and reality within the organization • Other analyses – collected from external and internal sources: government data; business association data; research trends • Current trends influencing strategic planning • Globalization of the marketplace • Technology innovation • Security – post 9/11 • employment

11. B. Managing the Strategic Plan • Formulation of a strategic plan involves the preparation of a mission statement and the formulation of a set of goals that connect the mission to the activity of the organization • Objectives = goals: refers to the end results an organization seeks to attain to fulfill the organization’s mission • Objectives are the primary management tool for achieving any plan • Objectives are measurable and observable • Multiple objectives • Short-term, intermediate and long-term objectives

12. B. Managing the Strategic Plan (cont’d) • Necessary objectives • Peter Drucker, noted management theorist, identified eight key areas in which any organization should have specific objectives on which to focus: • Market standing • Innovation • Profitability • Productivity • Physical and financial resource • Managerial performance and development • Worker performance and attitude • Public responsibility

13. B. Managing the Strategic Plan (cont’d) • Action Guidelines • Objectives establish WHAT is to be done • Action guidelines guide the organization’s employees in how the work is to be performed • Policies, procedures and rules • Policies are general statements developed by org. mgmt and communicated to managers and supervisors • Policies define limits, govern and direct • Procedures are sets, or sequences of steps to be followed in performing specific tasks or actions • Procedures specify behavior for managers to follow in making decisions

14. B. Managing the Strategic Plan (cont’d) • Policy focuses on a wide range of actions or decisions that may be made by organization members at any level of the organization • Policy governs = describes the way actions are completed or decisions are made • Policy directs = policy statement represents management’s preference or commitments on a subject; subordinates are expected to follow the policy guideline as they exercise authority, make decisions or take actions • Procedure = set of steps to be followed in performing a specific task or action

15. B. Managing the Strategic Plan (cont’d) • Rule = states exactly what is to be done; most commonly established in matters of health, safety and other areas of importance • Duration of plans • Strategic – long range • Tactical – shorter duration, more specific and objective • Operational – responsibility of first-line managers; specific and objective; just a few hours to a few days • Contingency – designed to assist the organization in dealing with dynamic environments

16. B. Managing the Strategic Plan (cont’d) • Types of plans • Standing-use plans – guide regular activity of an organization • Procedure guidelines, calendars, report cycles, documents • Strategic, tactical, operational, contingency could be considered standing-use plans • Single-use plans – cover an activity such as a technology transition, physical move to a temporary location, installation of complex machinery or systemwide software • Evaluation of plans – determining success and making adjustments

17. C. Communicating Mission and Values • Mission and values of an organization must be communicated throughout the organization • Communicating is the process of sharing ideas in such a way that others will understand and be able to use the transmitted information • Upper management levels create policy statements • Policy statements specify how management and employees will work together in the organizational structure • Employees are expected to follow policies; in order to implement policies effectively, procedures must be carefully developed and articulated

18. C. Communicating Mission and Values (cont’d) • Policies need to be stated and communicated explicitly • Formal policies must be written and wording of a written policy cannot be changed by word of mouth • Written policy helps new supervisors become more familiar with the company and its established policies quickly • Development of companywide policies and procedures manuals help standardize many practices that formerly were hearsay • Public and employee relations • Public relations policies must be established so that products and services are provided that meet public demand • Customers and clients are provided with expected service • Marketing practices adhere to requirements of legislation

19. C. Communicating Mission and Values (cont’d) • Employee relations policies • Hiring new employees • Training • Promoting employees • EAPs – special services provide help for employees who are having difficulty with stress, drug abuse, alcoholism, finances or other personal problems • Retiring and discharging employees • Employee benefits • Support of formal authority system – policies and procedures in effect within an organization communicate the expectations of the formal authority system

20. C. Communicating Mission and Values (cont’d) • Management by Objectives (MBO) – systematic approach to planning and controlling activities whereby superiors and those who report to them (subordinates) collaborate on setting objectives • One of the more popular management approaches that begin as a planning process • Peter Druckeris generally credited with originating this approach • Mutual setting of objectives – employee and supervisor together initiate a set of specific goals for areas of responsibility

21. C. Communicating Mission and Values (cont’d) • Setting of measurable objectives • Regular monitoring and performance evaluation • Effectiveness of MBO • Some problems or limitations with the use of MBO: • Time consuming • Top management must support MBO and be involved in it • Emphasis on short-term objectives • Some individuals are not positively motivated! • Managers are reluctant to share the goal-setting process

22. C. Communicating Mission and Values (cont’d) • Ethics = standards of right and wrong behavior that guide people • Common ethical principles generally include: • Honesty • Fairness • Respect for others • Nonviolence • Helpfulness • Code of ethics = actual statement made by corporations stating its ethical views in its mission statements

23. C. Communicating Mission and Values (cont’d) • Physicians subscribe to the Hippocratic Oath • Stockbrokers have codes against using information that was gained from “insiders” • Businesses publish “codes of conduct” • Corporate social responsibility • Enron scandal – 2001 led to public scrutiny, cynicism and skepticism • Public has heightened skepticism about the social responsibility of businesses and corporations • Corporations have an ethical responsibility to all of its stakeholders – all persons whom the organization is dedicated to serve