Introduction to Management and Leadership Cluster 6: Plan strategically Show 1 Planning

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Introduction to Management and Leadership
Cluster 6 Plan strategically Show 1 Planning
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Outline

• Planning within an organisation occurs as part
  of a wider system. Whatever type of planning is
  being conducted, it will be influenced by the
  organisations wider environment and management
  systems, and must in turn, be completed to
  support the organisations existence within this
  setting. The analogy of an organisation as a
  system is taken from biological sciences, where
  it refers to a set of interrelated parts
  dependant upon each other for survival. This
  thinking is also pursued by more recent work that
  promotes the sense of the organisation ecology
  where collaborative as well as competitive
  factors are studied in order to understand the
  enterprise's survival and success (Harrison
  1983209 Bookchin 1990 Hames 1995). This
  concept is important to explore as the form of
  structure employed to focus operations, and the
  degree the structure interacts with the
  environment is critical when trying to understand
  how operations are planned.
• This section will primarily explore how planning
  can be completed within a strategic setting. To
  do this we will examine how organisations
  formulate strategies to match their unique
  choices, market priorities, and operational
  strengths. Our study of planning will cover many
  different forms of planning, but focus on three
  types in particular
• Strategic and business planning
• Operational planning and
• Project planning.

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Budget and operations planning control process
MONITOR
PLAN
IMPROVE
ACQUIRE
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Strategic planning

• Is the formulation of a coordinated course of
  action to achieve business success and gain
  superiority over competitors.

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Business planning

• Translates Strategic/ Corporate goals into
  deliverables (outcomes required to achieve tam or
  operational business unit outcomes). It usually
  delineate a clear process, client, team or work
  group functioning as an independent area under a
  strategic or corporate plan

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Tactical planning

• Tactical plans are developed to implement
  specific parts of a strategic or business plan.
• They are specific in terms of time and resource
  allocations (including budget).
• They include monitoring mechanisms.

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Operational plans

• Operational plans are derived from tactical
  plans and are aimed at achieving operational
  goals
• They are narrowly focused usually on specific
  operations impacting delivery of goods and
  service.
• They are delineated by clear timeframes.
• They can be single-use plans or standing plans.

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Types of Operational Plans

• Single-use plans include
• Programs
• Single-use plan for a large set of activities.
• Projects
• Single-use plan of less scope and complexity
  than a program

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Types of Operational Plans

• Standing plans may include
• Policies
• Rules and regulations
• Standard operating procedures

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Contingency Planning

• Contingency Planning involves the
• setting of alternative plans or courses of
  actions to be taken if an intended plan or course
  of action to achieve an agreed purpose is
  disrupted or is rendered inappropriate.
• They can be shaped around existing plans to
  identify where the risk of failure can occur, the
  potential causes, the resulting impact and the
  immediate remedial or mitigating actions that
  can be taken.

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Levels of Planning

• A strategic or business plan outlines decisions
  on resource allocation, priorities and action
  steps necessary to reach strategic goals.
• A tactical plan aims at achieving tactical goals
  and implementing parts of a strategic plan.
• An operational plan focuses on carrying out
  tactical plans to achieve operational goals.

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Domains of planning
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Organisational transformation

• As organisations transform, so does the type,
  timeframes and scope, and role of planning.

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Why plans fail

• Lack of shared meaning
• Politics
• Distortions in objectives
• Sub-optimisation
• Means-ends inversion
• Group pressures
• External influences
• Lack of creativity
• Ill-considered implementation
• Intrinsic needs of insiders

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Why operational projects fail

• Lack of executive sponsorship
• Poorly defined resource specifications
• Lack of stakeholder consultation
• Uncooperative design partners
• Timeliness
• Lack of resources

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ParticipativePlanningProcess -7 Steps
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Scope and timelines for plans
Corporate Plan
3-5 Years
Strategic Plan
1-3 Years
Business Plan
6 to 18 Months
Aggregate or Master Plan
1 Year
Master Production Schedule
1 Year
3 to 12 Months
Operational Plan
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The concept of strategic gap
Positive Gap (OgtE)
E N V I R O N M E N T
O R G A N I S A T I O N
ASSESSMENT Opportunities Threats
Requirements Responsibilities
ASSESSMENT Management Technology
Policies Resources
STRATEGIC GAP
Negative Gap (EgtO)
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Strategy formulation at creek clothing company
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SWOT analysis

• SWOT
• Strengths
• Weaknesses
• Opportunities
• Threats

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Vision and Mission An organisations fundamental
purpose
SWOT Analysis To formulate strategies that
support the mission
Internal Analysis External Analysis
Strengths (distinctive Competence)
Opportunities
Threats
Weaknesses
Strategic Objectives - Exploit opportunities and
strengths - Neutralise threats - Avoid
weaknesses - Convert threats into
opportunities
Source Unknown
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Components of strategy

• Distinctive Core Competence
• Clear Scope
• Resource deployment
• Competitive advantage
• Realistic

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A Mission

• Is a statement of an organisations fundamental
  purpose

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Components of corporate mission statement

• Target customers and markets
• Principal products or services
• Brand and public image
• Core technologies
• Concern for survival, growth, and profitability
• Company values and philosophy
• Holds meaning

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Kinds of Organisational Goals for Creek Clothing
Company
Vision/Mission
Strategic goals
Managing Director
Tactical goals
Director - Operations
Director - Resources
Director - Marketing
Operational goals
Store Manager
Finance Manager
Sales Manager
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Strategy formulation and implementation across
three levels
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Managing director

• Provide 8 return to investors for at least 6
  years
• Start or purchase 4 new retail outlets within 2
  years
• Confirm online retailing (e-tailing) strategy and
  investment

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Director - operations

• Open 4 new stores during next 3 years
• Decrease shipping costs by 15 during next 2
  years
• Decrease average customer wait for mail order
  items to 3 days during this year
• Decrease inventory stock holdings to zero
• Secure supplies within 2 days of ordering

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Director - marketing

• Increase per store sales 5 per year for 10 years
• Target and secure an online market segments
  during next 2 years
• Develop new promotional strategy for release of
  next seasons casual wear

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Director - finance

• Keep corporate debt to no more than 20 of liquid
  assets for next 5 years
• Implement automated ordering system linked to
  sales
• Earn 6 on excess cash this year

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Store manager

• Ensure all employees are on the sponsored
  workplace agreement within 2 years
• Decrease waste by 5 this year
• Establish 10 new traineeships
• Recruit an assistant manager

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Sales director

• Develop online advertising campaigns within 8
  months
• Increase sale of casual wear by 5 within next
  year
• Lock in strategic measures within the sales plan
  by mid-year

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Finance manager

• Split accounts receivable/ payable functions from
  other areas within next 12 months
• Computerise payments system within 18 months
• Generate all tax invoices within 7 days of supply

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The Product Life Cycle