Chapter 5 Planning: the Foundation of Financial Success

Honors Business Management Chapter 5 – Planning

Key Questions Section 5.1: How do I deal with uncertainty, and how can planning help? Good business Section 5.2: What are mission and vision statements, and what are three types of leaders create a planning and goals? vision, Section 5.3: What is MBO and how can it be implemented, and what are SMART articulate the goals? vision, Section 5.4: How does the planning/control cycle help keep a manager's plans passionately headed in the right direction? own the vision, Section 5.5: What is project planning, why is it important, and what is the project and relentlessly life cycle? drive it to

Vocabulary planning action plans strategic management means-end chain product life cycle standing plan defenders single-use plan prospectors policy analyzers procedure reactors rule adaptive cycle program entrepreneurial problems project engineering problems Management by Objectives (MBO) administrative problems cascading objectives mission SMART goals vision planning/control cycle strategic planning/goals project planning tactical planning/goals project management operational planning/goals skunkworks goals project life cycle Y

Independent Sections R A

 Manager’s Toolbox – p. 139 R B

 Section 5.4: The Planning/Control Cycle – pp. 154-155 I L

1 Planning and Strategic Management

Product Life Cycle

Organizational Responses to Uncertainty The Adaptive Cycle

Defenders:

______Prospectors: Producing and Selecting and adjusting delivering products products and markets. Analyzers:

Reactors: ______Setting roles, Homework: Review Question 1 relationships, processes

2 Standing Plans Single-Use Plans Policy______Procedure______Program______Rule______Project______

Homework: 1. Complete the Create a Means-End Chain worksheet on the next page. 2. Review Questions 2-6 (you need your textbook)

3 CREATE A MEANS-ENDS CHAIN

C.J.’s is a restaurant chain with 684 outlets in 41 states. The chain’s restaurants serve over 300,000 customers per day. C.J.’s competes with chains such as Applebee’s and Chili’s, catering to the more than 40% of adults who eat out at a restaurant on a typical day. Recently, however, C.J.’s revenues have leveled off. The chain’s marketing department reports that more and more customers are opting for a low-carb diet. C.J.’s signature fried onion appetizers and home fries are perceived as unhealthy. President Ethan Webber has convened his senior staff for a brainstorming session to change the company’s mission statement and develop a plan for implementing the new focus. The group has decided to change the chain’s menus, offer more low-carb options, refocus advertising, and cater more to health-conscious consumers.

1. Develop a mission statement for C.J.’s reflecting its core business and the new approach.

2. Develop one strategic goal for top management.

3. Develop one tactical goal for district managers.

4. Develop one operational goal for individual store managers.

4 Promoting Goal Setting: Management by Objectives A. Goal Setting Insights

1. If goals are made ______difficult, people may achieve them less often than they would

easy goals, but they ______at a higher level.

2. People do better when goals are ______rather than general.

3. Management by ______has spread because of its emphasis on

converting ______goals to ______goals.

B. Management by Objectives Process

1. Managers and employees ______set objectives for the employee.

2. ______develop the action plans.

3. Managers and employees periodically ______the employee’s performance.

4. ______make a performance appraisal and ______

employees according to results. Failure is address by ______the objectives

or taking ______measures.

C. Three Types of MBO Objectives

1. Improvement Objective:

2. Personal Development Objective:

3. Maintenance Objective:

D. Success of MBO

1. Requires the commitment of ______management

2. MBO must be applied ______.

3. Objectives must be ______which means objectives are organized in a

______hierarchy flowing down from one level of management to another becoming

more specific at the ______levels of the organization.

Homework: 1. Review Questions 7-11. 2. Read the Management in Action section on textbook pages 161-163. Answer questions 1-5.

5 Project Life Cycle

Definition Planning Execution Closing

Homework: Review Questions 12-15.

Review Questions: 1. Think about the planning you are doing for life after high school. a. Identify which type of organizational response you are making to your planning. Explain how you know which response you are using. b. In what phase of the adaptive cycle is your post-high school planning? Explain how you know. 2. Read the example section on page 145. Answer the Your Call question. 3. Read the example section on page 146. Answer the Your Call question. 4. How are action plans different from goals? 5. What distinguishes policies, procedures, and rules from one another? 6. What characteristics do standing plans and single-use plans share? 7. Read the example section on page 152. Answer the Your Call question. 8. An airline carrier has the goal “to land as many planes as possible on time.” Which element(s) of a SMART goal are missing? 9. Which type of goal do you think would lead to better performance – an easily-attainable goal or an impossible goal? Be prepared to explain your reasoning. 10. Do you think it is important to reach all of your goals? Why or why not? 11. Read the example section on page 155. Answer the Your Call question. 12. Read the example section on page 156-157. a. Define skunkworks. b. Answer the Your Call question. 13. What are the benefits to having deadlines? 14. Read the example section on page 158. Answer the Your Call question. 15. Complete the Ethical Dilemma section on page 165.

6 Chapter 5 Review

1 2 3 4 5

10 11 12

14 15 16

Across Down 1. reason for being 2. goal for the next 1-52 weeks 3. expert at producing a few products 4. stage in the adaptive cycle 8. sets strategic goals for the U.S. 5. what every goals wants to be 10. single-use plan with many projects 6. managers and employees set goals together (abb) 12. type of verb used in goals 7. most profitable stage of the product life cycle 14. decisions relating to roles and relationships 9. work outside the normal chain of command 17. planning helps managers with this 10. always on the lookout for a great idea 24. describe what an organization wants to become 11. an element of a good goal 25. definition, planning, execution, closing (2 wrds) 13. imitation is their sincere form of flattery 26. objective 15. the purpose of MBO 29. deadlines help you to ____ 16. goals should start with this word 30. MBO goals should do this 18. most intense stage of the project life cycle 19. goals set by middle managers 20. designates a required action 21. failure to plan will make you one of these 23. single-use plan with many complex tasks 27. keeps many managers from planning

7 Part B – Circle the letter of the best response.

1. Which of the following describes an organization’s mission statement? a. describe what an organization stands for. b. describes “what” an organization wants to become. c. expresses where the organization wants to go strategically. d. expresses the purpose of the organization.

2. If you respond to uncertainty by making adjustments only when finally forced to by an environmental pressure you are which of the following? a. defender b. reactor c. analyzer d. prospector

3. Which goals are set by and for middle managers? a. strategic b. operational c. tactical d. financial

4. Which of the following is a planning step in the planning/control cycle? a. control the direction by improving future plans b. control the direction by comparing results with the plan c. set goals d. make the plan

5. For MBO to be successful, three things have to happen. Which of the following is NOT one of those? a. the commitment of top managers is essential b. it must be applied organization-wide c. strategic goals must match cascaded objectives d. objectives must cascade

6. What is the fourth stage in the project life cycle? a. closing b. execution c. planning d. definition

7. All of the following are benefits to planning EXCEPT: a. helps coordinate activities b. reduces stress c. helps you think ahead d. helps cope with uncertainty

8. Which of the following is TRUE regarding planning? a. You usually have plenty of time to make decisions b. Planning helps you juggle your work/family life c. Planning requires you to set aside time to do it d. none of these

8 9 9. What type of planning involves determining what contributions to the department units can make with given resources in the next 6-24 months? a. strategic b. tactical c. operational d. action

10. Which of the following is an objective used by MBO? a. jointly set b. strategic c. maintenance d. performance

11. Which of the following is NOT a step in the planning/control cycle? a. make the plan b. carry out the plan c. control the direction by comparing the results with the plan d. control the direction by restricting the knowledge available to employees

12. Which of the following is NOT a step in the MBO? a. develop strategic plans b. jointly set objectives c. periodically review performance d. give performance appraisal and rewards

13. Which of the following defines a project? a. single-use plans encompassing a range of project or activities b. single-use plans with less scope and complexity c. achieving a set of goals through planning, scheduling, and maintaining progress of the activities that comprise the project d. the preparation of single-use plans or projects

14. Which of the following is NOT one of the types of objectives in MBO? a. adaptive b. improvement c. personal development d. maintenance

15. Which part of planning involves managers from all parts of the organization in the formulation of the groups grand scheme? a. operational b. strategic c. tactical d. skunkworks