1 Module 2 Planning Understand planning and different types of planning Understand benefits and drawbacks of planning Differentiate different strategy types Understand SWOT, BCG, and Port’s Five Forces Model Understand what is meant by Management by Objectives and Six Sigma

2 What is planning? Define Organizational objectives or goals Establish an overall strategy for achieving these goals Develop a hierarchy of plans to integrate and coordinate activities

3 Why do we need planning Provide direction Reduce uncertainty Coordinate activities Reduce wastes and redundancy Reduce the impact of change Set the standards to facilitate control

4 Drawbacks of planning May create rigidity May reduce flexibility Can’t replace intuition and creativity Managers may focus on today’s competition rather than tomorrow’s survival Focusing solely on today’s success may lead to tomorrow’s failure

5 Do we need planning? Focus on the quality of planning Seek opportunities Look for weakness Focus on customers Allow flexibility Encourage creativity Implement planning

6 Categories of planning BreathTime Frame Specificity Frequency of Use strategic Long-termDirectional Single Tactical Short-termSpecific Standing

7 Types of plans Mission or purpose – basic function or task For example, mission of Markham Stouffville Hospital (MSH) To achieve excellence in the provision of health care that is compassionate, patient and family-centred, and consistent with the needs of Markham, Stouffville and neighboring communities. Fundamental to our mission is a commitment that each visit to Markham Stouffville Hospital will be a great experience.

8 Types of plans (Contd.) Objectives or goals – ends toward which activity is aim (i.e., results to be achieved) MSH example: It is our goal that the Hospital will continue to operate below our Expected Cost per Weighted Case while providing high quality care to our community.

9 Types of plans (Contd.) Strategies – outline general action and deployment of resources to attain objectives MSH example: Strategy priorities: 1. Great care and customer service 2. Great place to work 3. Great partner

10 Types of plans (Contd.) Policies – general statements or understandings which are officially agreed on by authority and which is used as a basis for making decisions For example, privacy policy, vacation policy

11 Types of plans (Contd.) Procedures – establish a required method of handling future activities

12 Types of plans (Contd.) Rules – spell out specific required actions or nonactions, allowing no discretion

13 Types of plans (Contd.) Programs – a complex of goals, policies, procedures, rules, task assignments to be taken, resources to be employed, and other elements necessary to carry out a given course of action

14 Types of plans (Contd.) Budget – a statement of expected results expressed in numerical terms

15 Purpose Objectives Strategies Policies Procedures Rules Programs budgets

16 Management by Objectives (MBO) MBO: a system in which specific performance objectives are jointly determined by subordinates and their superiors Four key elements: goal specificity, participative decision making, an explicit time period, and performance feedback

17 Benefits of MBO Align organizational goals with individual goals Make employees feel achievement Make realistic goals Help identify problems and opportunities Push forward

18 Criticism about MBO Focus on short-term goals rather than long-term goals Lack of team spirit Danger of inflexibility Fear of punishment Overuse quantitative goals

19 How to overcome drawbacks Set up multiple goals Reward for setting difficult goals Prioritize goals Continuous monitoring Fast feedback

20 The Strategic Management Process Set Mission, Objectives, and Strategies Formulate Strategies Analyze the Environment Identify Opportunities and Threats Analyze Resources Identify Strengths and Weaknesses Reassess Mission and Objectives Implement Strategies Evaluate Results

21 SWOTAnalysis WeaknessesThreats Opportunities Strengths

22 Porter’s five forces model Competitive Battleground New Entrants Suppliers Buyers Substitute products or services

23 Boston Consulting Group (BCG) analysis High Low Market Growth Low High Wild catStar DogCase cow Market Share

24 Retrenchment CombinationCombination The Grand Strategies StabilityStabilityGrowthGrowth

25 Implementation Evaluation What Happens After Strategies Are Formulated?

26 Benchmarking Quality As A Strategic Weapon ISO 9000 Six Sigma (6  )

27 “[Six Sigma - The Breakthrough Strategy] is the most important initiative GE has ever taken…it is part of the genetic code of our future leadership.” – Jack Welch, CEO, GE