Presentation on theme: "Planning and Organizing Chapter 13. The Planning Function Planning for a business should stem from the company’s Business Plan – The business plan sets."— Presentation transcript:
The Planning Function Planning for a business should stem from the company’s Business Plan – The business plan sets goals for the business – The business plan outlines the activities that need to be completed in order to achieve the company’s goals.
The Importance of Planning All managers are involved in planning in some way. Planning is probably the most important management activity. Plans serve as guidelines for making decisions.
The Importance of Planning Managers use their plans to determine if a business is making progress. Planning helps managers communicate with each other and employees as the coordinate the activities of the company.
The Two Types Of Planning That Managers Do Strategic Planning – Aka Long Term Planning – Aka “The Big Picture” Operational Planning – Aka Short Term Planning – Aka “The Little Picture”
Strategic / Long Term Planning Provides broad goals and direction for the entire business. Identifies where the business wants to go.
Mission Statement – A short, specific statement of the business’ purpose and direction. – This is “Vision” of why the company exists.
Steps to Strategic Planning – External Analysis » Managers study factors outside of the firm that can affect effective operations. – Internal Analysis » Managers study factors inside the business that can affect success. – Mission » Managers agree on the most important purposes or directions for the firm based on the information collected.
Steps to Strategic Planning – Goals » Managers develop outcomes for the business to achieve that fit within the mission. – Strategies » Managers identify the efforts expected from each area of the firm if goals are to be achieved.
SWOT Analysis (Steps 1 and 2 of Strategic Planning) – Internal and External analyses are often referred to as SWOT Analysis. – Looks at the organizations: » Strengths » Weaknesses » Opportunities » Threats
Operational / Short Term Planning Identifies specific activities for each area of the business. – Identifies how the work will be done. – Identifies who will do the work. Most of the operational planning is done by mid-managers and supervisors.
Planning Tools Goals Goals – a specific statement of the result the business expects to achieve. – Goals help keep the company focused on there it wants to be in the future and the results it expects to accomplish.
Characteristics of effective goals. » Goals must be specific and meaningful. Make them measurable. » Goals must be achievable » Goals should be clearly communicated » Goals should be consistent with each other and with overall company goals.
Planning Tools Standards – A specific measure against which something is judged. – Usually used to measure quality. – Can be used to measure time it takes to complete a task. – Can be used to judge performance.
Planning Tools Policies – guidelines used in making decisions regarding specific, recurring situations. – Work rules are examples of business policies. Procedures – a list of steps to be followed for performing certain work. – Usually used for routine tasks. – Using procedures to complete routine tasks increases efficiency. – Helps new employees who are learning the job.
Planning Tools Budgets – A specific financial plan. – Budgets assist managers in determining the best way to use available money to reach goals. Schedules – A time plan for reaching objectives. Research – collecting data to make decisions. – Managers need to complete research to improve their planning decisions.
The Organization Function Organizing is concerned with determining how plans can be accomplished most effectively and arranging resources to complete work. Organization involves arranging resources and relationships between departments and employees and defining the responsibility each has for accomplishing work.
Role of Organizational Charts Organizational chart is a drawling that shows the structure of an organization, major job classification, and the reporting relationships among the organization’s personnel. The purpose of the organizational chart is to show: – The departments that make up the business. – Indicate each employee’s department and to whom each reports. – Identify lines of authority.
Elements of Organization The process of organization involves three elements: – Division of work – Facilities and working conditions – The employees
Division of Work The total work to be done must be divided into units. Group activities into broad natural divisions. Then break down work into departments. Determining how to divide work into units is determined by: – The type of work to be done in each business. – The amount of work to be done.
Facilities and Working Conditions When determining how work is to be done the physical aspects of the organization must be considered. Work should move through the business as efficiently as possible.
The Employees Dividing work into manageable units must be done with the employees at mind. Organizing involves establishing good relationships among the employees. Organization, in part, is matching the employees, the employee’s materials and employee’s work.
Characteristics of Good Organization Several characteristics of good organization apply to the management of work. – Responsibility and Accountability – is the obligation to accept responsibility for the outcomes of assigned tasks. – Unity of Command – Span of Control
Accountability – Definition – is the obligation to accept responsibility for the outcomes of assigned tasks. While the manager is ultimately responsible for the work the employee is accountable to the manager for completing the assigned work properly. Managers evaluate employees work using: – Established goals – Work standards.
Responsibility and Authority Responsibility is the obligation to do an assigned task. – In a good organization the assigned tasks are clearly identified. Authority is the right to make decision about assigned work and to make assignments to others concerning work. One of the greatest mistakes in business is to assign responsibilities to employees without giving them sufficient authority to carry out those responsibilities.
Responsibility and Authority Each employee and each manager should know: – The description and duties of each job. – What authority accompanies the job. – The manager in charge. – Who reports to the manager. – What is considered satisfactory performance. Empowerment – is the authority given to individual employees to solve problems they encounter on their jobs with the resources available to them.
Types of Organizational Structure. The types of organizational structure identifies the relationships among departments and personnel, and indicates the lines of communications and decision making There are two principal traditional types of organizational structure. – Line Organization – Line-and-staff Organization. There are two newer types of organizational structure – Matrix Organization – Team Organization
Line Organization In a line organization all authority and responsibility can be traced in a direct line from the top executive down to the lowest employee level in the organization. In a line organization the president has direct control over all of the aspects of the business. – However, responsibility, authority, and accountability are passed from one person to another down to the lowest level.
Line Organization This type of organization can be very efficient – Plans can be put into effect immediately. Line organization can lead to many layers of management, and isolation or lack of communication between departments and divisions.
Line-and-staff Organization Managers have direct control over the units they supervise but have access to staff specialist for assistance. – Line-and-staff organization adds staff specialists to a line organization. Staff personnel give advice and assistance to line personnel. Staff personnel have not authority to line personnel. Line personnel are responsible to only one supervisor.
Matrix Organization A matrix organization combines workers into temporary work teams to complete specific projects. Employees report to a project manager with authority and responsibility for the project. When a new project must be done employees with the needed skills are assigned to work on the project team.
Matrix Organization Employees work for a manager until the project is finished. The matrix organization allows for flexibility and rapid change within the organization. When employees are given new project assignments, managers must be careful to define authority and responsibility, so as not to violate unity of command.
Team Organization Team Organization divides employees into permanent work teams. The teams have responsibility and authority for important business activities with limited management control over their daily work. Team leaders replace the traditional position of supervisor.
Team Organization Sometimes teams are organized without a permanently designated team leader. – Self-directed work teams – team members are responsible for the work assigned to the team. Self-directed work teams have a manager who they can turn to with particularly tough problems. Most of the time the team just works together. The self-directed work team has full authority over all of the management functions.
Team Organization For self-directed work teams to work each member must become competent in three areas: – Technical job skills. – Interpersonal skills. – Administrative skills.
Improving Business Organization Traditional businesses use a Centralized Organization – A few top managers do all major planning and decision making. Some companies have moves to a Decentralized Organization – A very large business is divided into smaller units. The unit managers have almost total authority and responsibility for their units.
Improving Business Organization A Flattened Organization – is one with fewer levels of management then traditional organizations. – To achieve a flattened organization the remaining managers and employees assume many of the responsibilities previously assigned to other levels of management.