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Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–1
CHAPTER 6
ESTABLISHING ORGANISATIONAL GOALS & PLANS, THEN DEVELOPING STRATEGY
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–2
LECTURE OUTLINE• The planning process
• The nature of organisational goals
• How goals facilitate performance• Linking goals & plans• Management by objectives
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–3
LECTURE OUTLINE
• The concept of strategic management
• The role of competitive analysis in strategy formulation
• Formulating functional level strategy
• Strategy implementation
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–4
THE PLANNING PROCESS
• Mission The organisation’s purpose or fundamental reason for existence
• GoalFuture target or end result an organisation wishes to achieve
• PlanMeans devised for attempting to reach a goal
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–5
THE PLANNING PROCESS
mission goals plans
Goal attainment(organisational
efficiency & effectiveness)
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–6
THE PLANNING PROCESS
‘Setting goals & developing plans leads to goal attainment and ultimately, to organisational efficiency & effectiveness.’
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–7
ORGANISATIONAL MISSION
‘Essentially, planning builds on the organisation’s mission, the organisation’s purpose or fundamental reason for existence.’
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–8
ORGANISATIONAL MISSION
Mission statement may:• be unwritten• address customers,
products/services, location, technology, concern for survival, philosophy, self-concept, concern for public image, concern for employees (David 1989)
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–9
NATURE OF ORGANISATIONAL GOALS
• Benefits of goals– Increase performance– Clarify expectations– Facilitate control– Increase motivation
• Levels of goals– Operational goals (base)– Tactical goals (mid)– Strategic goals (top)
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–10
LEVELS OF GOALS
• Top managers Organisational perspective
• Middle managersDepartmental perspective
• 1st level managersUnit/individual perspective
strategicgoals
strategicplans
tacticalgoals
tactical plans
operationalgoals
operational plans
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–11
GOALS AND PERFORMANCE
Key aspects:• Goal content• Goal commitment• Work behaviour• Other process components• Possible problems
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–12
GOALS AND PERFORMANCE
GOAL CONTENTShould be:• Challenging• Attainable• Specific & measurable• Time-limited• Relevant
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–13
GOALS AND PERFORMANCE
GOAL COMMITTMENTInfluenced by:• Supervisory authority• Peer & group pressure• Public display• Expectations of success• Incentives & rewards• Participation
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–14
GOALS AND PERFORMANCE
WORK BEHAVIOUR
Goals & commitment affect work
behaviour:• Direction• Effort• Persistence• Planning
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–15
GOALS AND PERFORMANCE
Job process components affect
performance:
• Job knowledge & ability• Task complexity• Situational constraints
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–16
GOALS AND PERFORMANCE
POTENTIAL PROBLEMS WITH GOALS• Excessive risk-taking• Increased stress• Undermined self-confidence• Ignored non-goal areas• Excessive short-run thinking• Dishonesty & cheating
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–17
LINKING GOALS & PLANS
• Levels of plans• Extent of recurring use• Time horizons of goals & plans• Promoting innovation
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–18
LINKING GOALS & PLANS
Levels of plans:• Strategic• Operational• Tactical
Recurring use:• Single-use• Standing plans: policies, procedures, rules
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–19
LINKING GOALS & PLANS
Time horizons of goals/plans:• Short• Intermediate• Long range
Promoting innovation by:• Mission statement• Goal content & process• Planning content & process
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–20
OBSTACLES TO PLANNING
Domination by specialists
Low levels of manager skill & knowledge
Pressure of day-to-day work
Manager hostility
Environmental change
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–21
OBSTACLES TO PLANNING
REDUCING PLANNING OBSTACLES
• Use of planning staffSmall group who assist managers in planning
• Use contingency planningDevelopment of alternative plans
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–22
MANAGEMENT BY OBJECTIVES
Process through which specific goals are set collaboratively for the organisation as a whole and every unit within it; the goals are then used as a basis for planning, managing organisational activities, and assessing and rewarding contributions.
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–23
MANAGEMENT BY OBJECTIVES
Steps in the MBO process:• Develop organisational goals• Establish specific goals for departments• Formulate action plans• Implement & maintain ‘self-control’• Review progress periodically• Appraise performance
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–24
MANAGEMENT BY OBJECTIVESStrengths:• Helps link goals & plans• Clarifies priorities, expectations• Fosters organisational communication• Builds member motivation
Weaknesses:• Needs strong, enduring commitment• Requires training of managers• May be misused
(i.e. for punishment)• Risk of dominance of quantitative goals
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–25
MANAGEMENT BY OBJECTIVES
Assessing MBO:• Can heighten organisational
performance• Short-term focus of US, Australian &
NZ organisations limits application
• 20–25% success rate
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–26
THE CONCEPT OF STRATEGIC MANAGEMENT
‘Process through which managers formulate and implement strategies geared to optimising strategic goal achievement, given available environmental and internal conditions.’
• THE STRATEGIC MANAGEMENT PROCESS• IMPORTANCE OF STRATEGIC MANAGEMENT• LEVELS OF STRATEGY
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–27
THE CONCEPT OF STRATEGIC MANAGEMENTTHE STRATEGIC MANAGEMENT PROCESS• Strategy formulation• Strategy implementation
IMPORTANCE OF STRATEGIC MANAGEMENT• Competitive advantage
LEVELS OF STRATEGY• Corporate level• Business level• Functional level• Coordinating strategy levels
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–28
THE ROLE OF COMPETITIVE ANALYSIS IN STRATEGY FORMULATION
SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)
relies upon:• ENVIRONMENTAL ASSESSMENT
– Porter’s five competitive forces model
• ORGANISATIONAL ASSESSMENT– Organisational resources & capabilities– Distinctive competencies
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–29
FORMULATING FUNCTIONAL LEVEL STRATEGY
Functional level strategies spell out how functional areas can bolster business-level strategye.g. an R&D department might accelerate innovation to provide new products before competitors
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–30
STRATEGY IMPLEMENTATIONCarrying out strategic plans• Technology• Human Resources• Reward systems• Decision processes• Structure
Maintaining strategic control• Monitoring environment• Assessing effects of actions• Monitoring results
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–31
LECTURE SUMMARY• The planning process
– Major components – Organisational mission statement
• The nature of organisational goals
– Benefits of goals– Levels of goals– Goals & performance– Work behaviour– Other work processes– Possible problems with goals
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–32
LECTURE SUMMARY
• How goals facilitate performance– Direction, effort, persistence & planning
• Linking goals & plans– Levels, recurrent use, time spans, promoting
innovation– Possible obstacles to planning
• MBO (Management by objectives)– The key steps in MBO process– Strengths & weaknesses
Copyright 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 6–33
LECTURE SUMMARY
• Concept of strategic management– The strategic management process– Importance of strategic management– Levels of strategy
• Role of competitive analysis in strategy formulation– SWOT analysis