Modern Management 9 th edition

1. . Modern Management9th edition

2. . Ü Objectives • A complete definition of a plan • Insights regarding various dimensions of plans • An understanding of various types of plans • Insights into why plans fail • A knowledge of various planning areas within an organization • A definition of forecasting • An ability to see the advantages and disadvantages of various methods of sales forecasting • A definition of scheduling • An understanding of Gantt charts and PERT

3. PLANS: ADEFINITION . • Dimensions of Plans • Repetitiveness • Time • Scope • Level

4. PLANS: ADEFINITION . Four major dimensions to consider when developing a plan Figure 9.1

5. PLANS: ADEFINITION . • Types of Plans • Standing Plans: Policies, Procedures, and Rules • Single-Use Plans: Programs and Budgets

6. PLANS: ADEFINITION . Standing plans and single-use plans Figure 9.2

7. PLANS: ADEFINITION . A successful standing plan program with mutually supportive policies, procedures, and rules Figure 9.3

8. PLANS: ADEFINITION . • Why Plans Fail • 1. Corporate planning is not integrated into the total management system • 2. There is a lack of understanding of the different steps of the planning process • 3. Management at different levels has not properly contributed to planning activities • 4. Responsibility for planning is wrongly vested solely in the planning department • 5. Management expects that plans developed will be realized with little effort • 6. In starting formal planning, too much is attempted at once • 7. Management fails to operate by the plan • 8. Financial projections are confused with planning • 9. Inadequate inputs are used in planning • 10. Management fails to grasp the overall planning process

9. PLANS: ADEFINITION . • Planning Areas: Input Planning • Plant Facilities Planning • Site selection • 1. Deciding on a set of variables critical to obtaining an appropriate site • 2. Assigning each of these variables a weight reflecting its relative importance • 3. Ranking alternative sites according to how they reflect these different variables • Human Resource Planning • Questions for personnel planners • 1. What types of people does the organization need to reach its objectives? • 2. How many of each type are needed? • 3. What steps should the organization take to recruit and select such people? • 4. Can present employees be further trained to fill future needed positions? • 5. At what rate are employees being lost to other organizations?

10. PLANS: ADEFINITION . Major Areas of Consideration When Selecting a Plant Site and Sample Exploratory Questions to Be Asked Table 9.1 Major Areas Sample Questions Profit Market Location Where are our customers in relation to the site? Competition What competitive situation exists at the site? Operating costs Suppliers Are materials available near the site at reasonable cost? Utilities What are utility rates at the site? Are utilities available in sufficient amounts? Wages What wage rates are paid by comparable organizations near the site? Taxes What are tax rates on income, sales, property, and so on for the site? Investment costs Land/development How expensive are land and construction at the site? Others Transportation Are airlines, railroads, highways, and so on accessible from the site? Laws What laws related to zoning, pollution, and so on will influence operations if the site is chosen? Labor Does an adequate labor supply exist around the site? Unionization What is the degree of unionization in the site area? Living conditions Are housing, schools, and so on around the site appropriate? Community relations Does the community support the organization’s moving into the area?

11. PLANS: ADEFINITION . Results of Weighting Seven Site Variables for Six Countries Table 9.2 Sites Maximum Criteria Value Assigned Japan Chile Jamaica Australia Mexico France Living conditions 100 70 40 45 50 60 60 Accessibility 75 55 35 20 60 70 70 Industrialization 60 40 50 55 35 35 30 Labor availability 35 30 10 10 30 35 35 Economics 35 15 15 15 15 25 25 Community capability & attitude 30 25 20 10 15 25 15 Effect on company reputation 35 25 20 10 15 25 15 Total 370 260 190 165 220 275 250

12. PLANS: ADEFINITION . The human resource planning process Figure 9.4

13. PLANNING TOOLS . • Forecasting • How Forecasting Works • Insect Control Services forecasts by attempting to do the following: • 1. Establish relationships • 2. Determine the impact government restrictions • 3. Evaluate sales growth potential, profitability, resources required, and risks • 4. Evaluate the potential for expansion of marketing efforts • 5. Determine the likelihood of technological breakthroughs • Types of Forecasts

14. PLANNING TOOLS . • Forecasting (con’t) • Methods of Sales Forecasting • Jury of Executive Opinion Method • 1. Experts answer questions about area being forecasted • 2. First summary of all the answers is prepared • 3. Experts get copies of first summary to modify as necessary • 4. Distribute second summary of these modifications to experts • Must justify opinions that deviate significantly from norm • 5. Distribute third summary of opinions and justifications to experts • Justification for all answers is now required • 6. Generate forecast from opinions and justifications from 5 • Salesforce Estimation Method • Time Series Analysis Method • Product Stages: introduction, growth, maturity, saturation, and decline

15. PLANNING TOOLS . Time series analysis method Figure 9.5

16. PLANNING TOOLS . Stages of the product life cycle Figure 9.6

17. PLANNING TOOLS . • Forecasting (con’t) • Evaluating Sales Forecasting Methods • Scheduling • Gantt Charts • Features

18. PLANNING TOOLS . Completed Gantt chart Figure 9.7

19. PLANNING TOOLS . • Forecasting (con’t) • Program Evaluation and Review Technique (PERT) • Defining PERT • Activities • Events • Features • Critical Path • Steps in Designing a PERT Network • 1. List all the activities/events for project and their sequence • 2. Determine time needed to complete each activity/event • 3. Design PERT reflecting all information contained in 1 and 2 • 4. Identify the critical path

20. PLANNING TOOLS . PERT network designed for building a house Figure 9.8

21. Chapter Nine ? Questions