Chapter 13 Planning Organizing The Planning Function Importance

Chapter 13 Planning & Organizing The Planning Function Importance of Planning The Organizing Function

Planning Business Plan - a written description of the business and its operations with an analysis of the opportunity & risks it faces. Planning is the most important planning activity. – Strategic Planning - long-term and provides broad goals and direction for the entire business. Designing a new product can take 5 years or more. • SWOT Analysis – Operational Planning - short-term and identifies specific activities for each area of business. This type of planning determines how work will be done.

Strategic Planning Steps Step 5: Strategies Step 4: Goals SWOT Analysis Step 3: Mission Statement Step 2: Internal Analysis (SW) Step 1: External Analysis (OT)

Planning Tools Goals - provide direction for the business. – – Must be specific Must be achievable Should be Communicated Clearly Should be consistent with the overall company Budgets - most widely used planning tool Schedules - yardsticks that are used to ensure that the quality of work is always acceptable. Policies - guidelines used in making decisions regarding specific, recurring situations. Procedures - steps Research - Information

Organizing Function Before plans are carried out, the company must be organized to best carry out the plans Organizational Charts - a visual device that shows the structure of an organization and the relationship among workers. – Show the departments that make up the business – Indicate each employee’s department and to whom each reports. – Identify the lines of authority and formal

Organizational Chart

Elements of Organizations Mangers organize the entire structure of the business. Division of Work - total work to be done must be divided into units, such as departments. Facilities - physical aspects of organizing job satisfaction is influenced by working conditions. Employees - organizing involves establishing good relationships among employees

Characteristics of Good Organizations Responsibilities are assigned and authority is delegated – Responsibility - the obligation to do an assigned task. – Authority - the right to make decisions about work assignments and require other employees to perform assigned tasks. Delegated from top to bottom. – Empowerment – authority given to individual employees to solve problems as they encounter them. Quality of Work is Evaluated – Accountability - each individual’s responsibility to supervisor and the amount of work performed. Unity of Command is Practiced - requires that no employee have more than one supervisor at a time Reasonable Span of Control -number of employees directly supervised by one person.

Types of Organizational Structures Line Organizations - all authority and responsibility can be traced in a direct line from the top executive to the lowest employee level. Often leads to a lack of communication. Line & Staff - add staff specialists to a line organization. Staff Specialists give advice and assistance to personnel. Staff- have no authority over the line personnel. Matrix Organizations – combines workers into temporary work teams to complete specific problems. Team Organization – divides employees into permanent work teams, usually with a leader.

Improving Business Organizations Centralized Organization - Traditional - all major planning activities and decisions are made by a group of top executives in the business Decentralized - very large businesses are divided into smaller operating units & managers are given almost total responsibility and authority for the operations of those units Flattened Organization – fewer levels of management than traditional structures.