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Planning and Organizing Business Management Chapter 13 Mrs. Walton
Objectives Student will be able to: Justify the value of planning for a business Differentiate between the two levels of planning Provide examples of seven planning tools used by managers Identify four characteristics of a good organization Define two traditional types and two newer types of organizational structure.
Vocabulary Power Strategic planning Operational planning SWOT analysis Mission statement Vision Goal Schedule Standard  Policies Procedure Organizational chart responsibility  authority Empowerment Accountability Unity of command Span of control Line organization Line-and-staff organization Matrix organization Team organization Self directed work team Centralized organization Decentralized organization Flattened organization
The Planning Function
Elements of a Business Plan Nature of the Business Detailed operation of products and services Estimation of risk Size of business Location of business Background of entrepreneurs Goals and Objectives Basic results expected in short and long run Results expected in terms of sales volume or profit
Elements of a Business Plan (cont.) Marketing Plan Customers and their demand for the product or service Prices for the product or service Comparison of product or service with competitors Financial Plan Investment needed Projected income, expenses and profit Cash start-up and cash flow needs Organizational Plan Legal form of ownership Legal factors – licenses, leases, contracts Organizational chart Job descriptions and employee skills needed Physical facilities
Levels of Planning Strategic Planning Long term and provides broad goals and direction for the entire business Operational Planning Short term and identifies specific activities for each area of business
Strategic Planning Step 1 – External Analysis Managers study factors outside the firm that can affect effective operations: customers, competitors, the economy, government Step 2 – Internal Analysis Managers study factors inside the business that can affect success: operations, finances, personnel, other resources Step 3 – Mission Managers agree on the most important purposes or directions for the firm based on the information collected The first 3 steps are referred to as SWOT analysis – the examination of strengths and weaknesses along with opportunities and threats
Strategic Planning (cont.) Mission Statement – short, specific statement of the businesses purpose Vision – the companies reason for existing Step 4 – Goals Managers develop outcomes for the business to achieve that fit within the mission Step 5 – Strategies Managers identify the effects expected from each area of the firm if goals are to be achieved
Operational Planning How will the work be done Who will do the work What resources will be need For a specific area of the business It can include Developing budgets Planning inventory levels Purchasing raw materials Setting production levels and etc
Planning Tools Goals Budgets Schedules Standards Policies Procedures Research
Goals A specific statement of a result the business expects to achieve Characteristics of goals Goals must be specific and meaningful Goals must be achievable Goals should be clearly communicated Goals should be consistent with each other and with overall company goals
Budget A specific financial plan Financial budget assist managers in determining the best way to use available money
Schedules A time plan for reaching objectives Valuable in planning the most effective use of time
Standards A specific measure against which something is judged Standard are set for: Goods and services produced Quality Amount of time tasks should take, etc.
Procedures List of steps to be followed for performing certain work A flowchart can be used to show the order in the steps in a work procedure
Research To do a good deal of planning, managers need a lot of information Research is used to collect data and provide information needed to improve their planning decisions
The Organizing Function Role of the Organizational Chart
Role of the Organizational Chart A drawing that shows the structure of an organization, major job classifications, and the reporting relationship among the personnel The purpose of the organization Show the departments that make up the company Indicate each employee’s department and whom each reports Identify lines of authority and formal communication within the organization
Elements of the Organization The division of work The facilities and working conditions The employees
Characteristics of a Good Organization Responsibility and Authority Accountability Unity of command Span of Command
Types of Organizational Structure Line organization Line-and- Staff Organization Matrix Organization Team organization
Line Organization All authority and responsibility can be traced in a direct line from the top executive down to the lowest employee level in the organization President Production Manager Sales  Manager Controller Assistant  Sales Manager Branch Manager  Branch Manager Branch Manager
Line and Staff Organization Managers have direct control over the units and employees they supervise but have access to staff specialist for assistance It is designed to solve the problem of complexity and still retain the advantages of definite and direct lines of authority
Matrix Organization Combines workers into temporary work teams to complete specific projects Employees report to a project manager with authority and responsibility for the project They work with that manager until the project is finished.
Team Organization Divides employees into permanent work teams The teams have responsibility and authority for the important business activities and limited management control over their daily work
Improving Business Organization Centralized Organization A few top managers do all major planning and decision making Decentralized Organization Business divided into smaller units, unit managers have almost total responsibility and authority for the operation of the unit Flattened Organization Has fewer levels of management

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Planning and organizing

  • 1. Planning and Organizing Business Management Chapter 13 Mrs. Walton
  • 2. Objectives Student will be able to: Justify the value of planning for a business Differentiate between the two levels of planning Provide examples of seven planning tools used by managers Identify four characteristics of a good organization Define two traditional types and two newer types of organizational structure.
  • 3. Vocabulary Power Strategic planning Operational planning SWOT analysis Mission statement Vision Goal Schedule Standard Policies Procedure Organizational chart responsibility authority Empowerment Accountability Unity of command Span of control Line organization Line-and-staff organization Matrix organization Team organization Self directed work team Centralized organization Decentralized organization Flattened organization
  • 5. Elements of a Business Plan Nature of the Business Detailed operation of products and services Estimation of risk Size of business Location of business Background of entrepreneurs Goals and Objectives Basic results expected in short and long run Results expected in terms of sales volume or profit
  • 6. Elements of a Business Plan (cont.) Marketing Plan Customers and their demand for the product or service Prices for the product or service Comparison of product or service with competitors Financial Plan Investment needed Projected income, expenses and profit Cash start-up and cash flow needs Organizational Plan Legal form of ownership Legal factors – licenses, leases, contracts Organizational chart Job descriptions and employee skills needed Physical facilities
  • 7. Levels of Planning Strategic Planning Long term and provides broad goals and direction for the entire business Operational Planning Short term and identifies specific activities for each area of business
  • 8. Strategic Planning Step 1 – External Analysis Managers study factors outside the firm that can affect effective operations: customers, competitors, the economy, government Step 2 – Internal Analysis Managers study factors inside the business that can affect success: operations, finances, personnel, other resources Step 3 – Mission Managers agree on the most important purposes or directions for the firm based on the information collected The first 3 steps are referred to as SWOT analysis – the examination of strengths and weaknesses along with opportunities and threats
  • 9. Strategic Planning (cont.) Mission Statement – short, specific statement of the businesses purpose Vision – the companies reason for existing Step 4 – Goals Managers develop outcomes for the business to achieve that fit within the mission Step 5 – Strategies Managers identify the effects expected from each area of the firm if goals are to be achieved
  • 10. Operational Planning How will the work be done Who will do the work What resources will be need For a specific area of the business It can include Developing budgets Planning inventory levels Purchasing raw materials Setting production levels and etc
  • 11. Planning Tools Goals Budgets Schedules Standards Policies Procedures Research
  • 12. Goals A specific statement of a result the business expects to achieve Characteristics of goals Goals must be specific and meaningful Goals must be achievable Goals should be clearly communicated Goals should be consistent with each other and with overall company goals
  • 13. Budget A specific financial plan Financial budget assist managers in determining the best way to use available money
  • 14. Schedules A time plan for reaching objectives Valuable in planning the most effective use of time
  • 15. Standards A specific measure against which something is judged Standard are set for: Goods and services produced Quality Amount of time tasks should take, etc.
  • 16. Procedures List of steps to be followed for performing certain work A flowchart can be used to show the order in the steps in a work procedure
  • 17. Research To do a good deal of planning, managers need a lot of information Research is used to collect data and provide information needed to improve their planning decisions
  • 18. The Organizing Function Role of the Organizational Chart
  • 19. Role of the Organizational Chart A drawing that shows the structure of an organization, major job classifications, and the reporting relationship among the personnel The purpose of the organization Show the departments that make up the company Indicate each employee’s department and whom each reports Identify lines of authority and formal communication within the organization
  • 20. Elements of the Organization The division of work The facilities and working conditions The employees
  • 21. Characteristics of a Good Organization Responsibility and Authority Accountability Unity of command Span of Command
  • 22. Types of Organizational Structure Line organization Line-and- Staff Organization Matrix Organization Team organization
  • 23. Line Organization All authority and responsibility can be traced in a direct line from the top executive down to the lowest employee level in the organization President Production Manager Sales Manager Controller Assistant Sales Manager Branch Manager Branch Manager Branch Manager
  • 24. Line and Staff Organization Managers have direct control over the units and employees they supervise but have access to staff specialist for assistance It is designed to solve the problem of complexity and still retain the advantages of definite and direct lines of authority
  • 25. Matrix Organization Combines workers into temporary work teams to complete specific projects Employees report to a project manager with authority and responsibility for the project They work with that manager until the project is finished.
  • 26. Team Organization Divides employees into permanent work teams The teams have responsibility and authority for the important business activities and limited management control over their daily work
  • 27. Improving Business Organization Centralized Organization A few top managers do all major planning and decision making Decentralized Organization Business divided into smaller units, unit managers have almost total responsibility and authority for the operation of the unit Flattened Organization Has fewer levels of management

Editor's Notes

  • #5: Planning must be done carefully in order to make the best decisions about starting and managing a business. Poor planning could result in huge losses and failure of the business. The correct decision could result in a much larger business, higher profits and a great deal of personal satisfaction. One way to plan is to develop a business plan
  • #6: Careful planning encourages managers to be more specific and objective in their decisions