Contemporary Management Chapter 6

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Chapter Six: The Manager as a Planner and Strategist The Nature of the Planning Process: Planning is a process that managers use to identify and select appropriate goals and courses of action for an organization. The cluster of decisions and actions that managers take to help an organization attain its goals is its strategy. Thus, planning is both a goal-making and a strategy-making process. Planning is a three-step activity: 1) Determining the organization’s mission and goals: A mission statement is a broad declaration of an organization’s purpose that identifies the organization’s products and customers and distinguishes the organization from its competitors. 2) Formulating Strategy: Managers analyze the organization’s…show more content…
Time Horizons of Plans: Plans differ in their time horizons, or intended durations. Managers usually distinguish among long-term plans, with a horizon of five years or more; intermediate-term plans, with a horizon between one and five years; and short-term plans, with a horizon of one year or less. Typically, corporate- and business-level goals and strategies require long and intermediate-term plans, and functional-level goals and strategies require intermediate and short term plans. Most organizations have an annual planning cycle, which usually linked to the annual financial budget. Although a corporate- or business-level plan may extend over five years or more, it is typically treated as a rolling plan, a plan that is updated and amended every year to take account of changing conditions in the external environment. Rolling plans allow managers to make midcourse corrections if environmental changes warrant or to change the thrust of the plan altogether if it no longer seems appropriate. Standing Plans and Single-Use Plans: Managers create standing and single-use plans to help achieve an organization’s specific goals. Standing plans are used in situations in which programmed decision making is appropriate. When the same situations occur repeatedly, managers develop policies (a general guide to action), rules (a formal, written guide to action), and standard operating
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