Haley Hoy, PhD, ACNP Susan Alexander, DNP, CNS, CRNP Manil Maskey, Research Scientist, ITSC
Management fundamentals - BMSbms.lk/download/GDM_Tutorials/batch-31/MF/Manil/MF_3.pdf · Planning...
Transcript of Management fundamentals - BMSbms.lk/download/GDM_Tutorials/batch-31/MF/Manil/MF_3.pdf · Planning...
MANAGEMENTFUNDAMENTALS
Lesson 3
Strategic and Operational Planning
What is Planning
Planning is the process of setting organisation’s goals and
deciding how best to achieve them.
Also known as the process of establishing goals and suitable
course of action for achieving those goals.
Levels of Goals/Plans and their Importance
Benefits of Goals and Plans
Legitimacy
Source of motivation and commitment
Resource allocation
Guides to action
Rationale for decisions
Standards of performance
Organisational Mission
The mission statement is the reason the organisation exists
Top of the goal hierarchy
Describes the values, aspirations and reason for being
A well-defined mission is the basis for all other goals
Mission statements outline the stated purpose and values to
stakeholders
Areas to be addressed in an effective mission statement
Product and business priorities
Market and specific requirement of its customers
Technology and operational capabilities
Core values of an organisation
Interest of key stakeholders
Core purpose of existence
Types of Goals and Plans
Strategic Goals and plans
Tactical Goals and plans
Operational Goals and plans
Strategic Goals and plans
Strategic Goals
Official goals, broad statements about the organisation
Strategic Plans
Define the action steps the company intends to attain
The blueprint that defines activities and resource allocation
Tactical Goals and plans
Tactical Goals
The results that major divisions and department within the
organisation intend to achieve
Tactical plans
Tactical plans are designed to help execute major strategic
plans and to accomplish specific part of the company’s
strategy
Plans of the divisions and departments
Operational Goals and plans
Operational Goals
Results expected from departments, work groups, and
individuals
Operational Plans
Develop at the lower levels of the organisation to specify
action steps towards achieving operational goals
Criteria for Effective Goal Setting
Specific and measurable
Cover key result areas
Challenging but realistic
Defined time period
Linked to rewards
Planning Approaches
Management by objective
Single-use plans
Standing plans
Contingency Plans
Management By Objective (MBO)
The term was first outlined by management guru Peter Drucker in 1954 in his
book "The Practice of Management."
MBO is a method whereby managers and employees define goals for every
department, project and person and use them to monitor subsequent
performances
A management model that aims to improve performance of an organisation by
clearly defining objectives that are agreed by both management and employees
Goal setting and action plans should ensure better participation and commitment
among employees, as well as alignment of objectives across the organisation
Model of the MBO Process
MBO Benefits and Problems
Benefits of MBO
Manager and employee efforts are focused
on activities that will lead
to goal attainment.
Performance can be improved at all
company levels
Employees are motivated
Departmental and individual goals are
aligned with company goals
Problems with MBO Constant change prevents MBO from taking
hold.
Poor employer-employee relations
reduces MBO effectiveness.
Strategic goals may be displaced by
operational goals.
Mechanistic organisational values that
discourage participation can harm the MBO
process.
Too much paper work saps MBO energy.
Single Use plan
A single use plan is developed to achieve goals not
likely to be repeated in future
Help to carryout a course of action that is not likely to
be repeated in the future
A programme is a complex set of objectives and plans to
achieve an important, one-time organisational goal
A project is similar to a programme, but generally smaller in
scope and complexity
Standing Plan
Ongoing plans that provide guidance for tasks performed repeatedly
within the organisation
Developed to carry out the activities that recur regularly over the
period of time
A policy is a general guide to action and provides direction for people
within the organisation
Procedures define a precise series of steps to be used in achieving a
specific job
Rules describe how a specific action is to be performed
Contingency Plans
Contingency plan is plan that determine the
alternative course of action to be taken if an
intended plan is unexpectedly disrupted or
rendered inappropriate
Plans for emergencies, setbacks or
unexpected conditions
Strategic Planning
Is a formal process designed to help an
organisation identify and maintain an optimal
alignment with the most important elements of the
environment within which the organisation resides.
Is a complex and ongoing process of organisational
change.
Levels of Strategy
Corporate-Level Strategy
The level of strategy concerned with the question, “What business are we in?” Pertains to
the organisation as a whole and the combination of business units and product lines that
make it up.
Business-Level Strategy
The level of strategy concerned with the question, “How do we compete?” Pertains to each
business unit or product line within the organisation.
Functional-Level Strategy
The level of strategy concerned with the question, “How do we support the business-level
strategy?”. Pertains to all of the organisation’s major departments.
Benefits and Limitations of Planning
Goals and plans provide a source of motivation and commitment
Goals and plans guide resource allocation
Goals and plans are a guide to action
Goals and plans set a standard of performance
Goals and plans can create a false sense of certainty
Goals and plans may cause rigidity in a turbulent environment
Goals and plans can get in the way of intuition and creativity
Fundamentals of Organising
What is Organising
Organising is the deployment of organisational resources to achieve
strategic goals.
Organising is deciding how best to group organisational activities
and resources so that the organisation will achieve its goals.
Organising structure defines:
The set of formal tasks assigned to individuals and departments
The design of the systems to ensure effective coordination
Formal reporting relationships
The Process of Organising
Identification of Work
Dividing the workload in to jobs
Grouping jobs in to departments
Deciding Spans of Management
Creation of Hierarchy
Delegating authority
Determining systems of working
Allocation of resources
Establishing coordinating mechanisms
Organisation structure
The set of formal tasks assigned to individuals and departments
Formal reporting relationships, including lines of authority,
decision responsibility, number of levels and span of control
The design of systems to ensure effective coordination
of employees across departments
Organising Chart for a Water Bottling Plant
Organising Concepts
Work Specialization is the degree to whichorganisational tasks are subdivided into
individual jobs; also called division of labor
Chain of Command is an unbroken line of authoritythat links all individuals in the organisation and
specifies who reports to whom
Authority
Authority is the formal and legitimate right to make decisions and issues
orders
Power that has been legitimized by an organisation
Authority is vested in organisational positions, not in people
Authority is received from mainly legal sources but managers can develop authority
by acceptance as well.
Authority is accepted by subordinates
Authority flows down the vertical hierarchy
Authority can be transferred from one to another
Responsibility
Responsibility is the duty to perform the task or activity assigned
Requirements of assigned task to be done
It should be match with the responsibility
Ultimate responsibility cannot be transferred
Responsibility is highly connected to accountability
Accountability
The obligation to demonstrate and take responsibility
for performance in light of agreed expectations.
There is a difference between responsibility and
accountability:
responsibility is the obligation to act
accountability is the obligation to answer for an action
Delegation of Authority
The act of assigning formal authority and responsibility for
completion of specific activities to a subordinate
Also known as passing authority to a lower level
Benefits of delegation
More effective use of your time
Motivation of staff
Training
Self development
More effective working team
Barriers to delegation
Lack of abilities to carry out the delegated tasks
Fear of subordinates
Fear of losing control
Fear that subordinates might do a better job
Some employees do not accept the delegated tasks
Concern about what to do with extra time
Feeling of indispensability
Span of Management
The number of employees reporting to a supervisor is span of management
Factors associated with less supervisor involvement and larger span of control
Work is stable and routine
Subordinates perform similar work
Subordinates in single location
Highly trained and need little direction
Rules and procedures are defined
Support systems and personnel are available to manager
Little supervision is required
Reorganisation and Span of Management
Tall vs flat organisations
Many layers of mgt between
lowest and highest levels
Small span of control
Close supervision, better
communication and reduce
delegation.
E.g. banking organisation
Fewer levels in hierarchy
Wider span of control
Subordinates grater decision
making authority, few mgt cost ,
grater employee motivation but
less control
Characteristics of tall structure Characteristics of flat structure
Centralization and Decentralization
Centralization means thatdecision authorityis located near the
top of the organisation
Decentralization meansdecision authority is
pushed downward to lowerorganisational levels
Change and uncertainty are usually associated with decentralization
The amount of centralization or decentralization should fit the firm’s strategy
During crisis or risk of company failure, authority may be centralized
Departmentalization
Basis for grouping positions into departments
Choices regarding chain of command
Traditional approaches:
Vertical Functional
Divisional
Matrix
Innovative approaches:
Teams
Virtual Networks
Functional and Divisional
Vertical Functional Approach
Grouping of positions into departments based on skills,
expertise, work activities, and resource use
Divisional Approach
Grouping based on organisational output
Product, Program, Business (self-contained unit)
Geographic or Customer-Based Divisions
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Functional versus Divisional Structures
Geographic-Based Global Organisation Structure
Matrix and Team Approach
Matrix approach combines functional and divisional
approaches
Improve coordination and information
Dual lines of authority
Team approach is a very widespread trend
Allows managers to delegate authority
Flexible, responsive
Dual-Authority Structure in a Matrix Organisation
Global Matrix Structure
Virtual Network Approach
Extends idea of horizontal coordination andcollaboration Partnerships Alliances
Could be a loose interconnected group i.e., outsourcing
Virtual network structure means that the firmsubcontracts most of its major functions to separatecompanies
Network Approach
Structural Advantages and Disadvantages
Questions?