POM 3 - Summary of Planning Process and Strategic Goals môn Principles of Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

SUMMARY OF LEARNING OUTCOMES AND KEY POINTS
3-1. Summarize the planning process and organizational goals.
• The planning process includes understanding the environment, formulating a mission, and creating goals and plans.
• Goals serve four basic purposes: They provide guidance and direction, facilitate planning,
inspire motivation and commitment, and promote evaluation and control.
• With an understanding of the environmental context, managers develop a number of different
types of goals and plans, including strategic, tactical, and operational plans.
3-2. Discuss the components of strategy and the types of strategic alternatives.
• A strategy is a comprehensive plan for accomplishing the organization’s goals.
• Effective strategies address three organizational issues: distinctive competence, scope, and resource deployment.
3-3. Describe how to use SWOT analysis in formulating strategy.
• SWOT analysis considers an organization’s strengths, weaknesses, opportunities, and threats.
• Using SWOT analysis, an organization chooses strategies that support its mission, exploit its
opportunities and strengths, neutralize its threats, and avoid its weaknesses.
3-4. Discuss various alternative approaches to business level strategy formulation.
• A business-level strategy is the plan an organization uses to conduct business in a particular industry or market.
• Porter suggests that businesses may formulate a differentiation strategy, an overall cost
leadership strategy, or a focus strategy.
• Business-level strategies may also take into account the stages in its products’ life cycles.
3-5. Describe various alternative approaches to corporate-level strategy formulation.
• A corporate-level strategy is the plan an organization uses to manage its operations across several businesses.
• A firm that does not diversify is implementing a single-product strategy.
• An organization pursues a strategy of related diversification when it operates a set of businesses that are somehow linked.
• An organization pursues a strategy of unrelated diversification when it operates a set of
businesses that are not logically associated with one another.
• Organizations manage diversification through the organization structure that they adopt and
through portfolio management techniques.
The BCG matrix classifies an organization’s diversified businesses as dogs, cash cows,
question marks, or stars according to market share and market growth rate.
The GE Business Screen classifies businesses as winners, losers, question marks, average
businesses, or profit producers according to industry attractiveness and competitive position.
3-6. Discuss how tactical plans are developed and implemented.
• Tactical plans are at the middle of the organization, have an intermediate time horizon, and are moderate in scope.
• Tactical plans are developed to implement specific parts of a strategic plan.
• Tactical plans must flow from strategy, specify resource and time issues, and commit human resources.
3-7. Describe the basic types of operational plans used by organizations.
• Operational plans are at the lower level of the organization, have a shorter time horizon, and are
narrower in scope. They are derived from a tactical plan and are aimed at achieving one or more operational goals.
• Two major types of operational plans are single-use and standing plans.
Single-use plans are designed to carry out a course of action that is not likely to be
repeated in the future. Programs and projects are examples of single-use plans.
Standing plans are designed to carry out a course of action that is likely to be repeated
several times. Policies, SOPs, and rules and regulations are all standing plans.
• Contingency planning and crisis management are also emerging as very important forms of operational planning.
QUESTIONS FOR REVIEW
1. Describe the nature of organizational goals. Be certain to include both the purposes and the kinds of goals.
2. Identify and describe Porter’s generic strategies.
3. What are the basic differences among a single-product strategy, a strategy based on related
diversification, and one based on unrelated diversification?
4. What is tactical planning? What is operational planning? What are the similarities and differences between them? 1.
Organizational goals give direction and purpose by defining what the organization wants to achieve.
They include strategic goals (long-term), tactical goals (middle-term), and operational goals (short-term). 2.
Porter’s generic strategies are:
Cost leadership: offering low-cost products.
Differentiation: offering unique products.
Focus: targeting a specific market segment. 3.
Single-product strategy: focuses on one product or service.
Related diversification: adds products related to existing ones to share resources.
Unrelated diversification: adds completely different products to reduce risk. 4.
Tactical planning turns strategic plans into specific actions for departments.
Operational planning deals with day-to-day activities.
Both aim to achieve goals, but
tactical is broader and operational is more detailed and short- term.
QUESTIONS FOR ANALYSIS
1. Managers are sometimes criticized for focusing too much attention on the achievement of
short-term goals. In your opinion, how much attention should be given to long-term versus short-
term goals? In the event of a conflict, which should be given priority? Explain your answers.
2. Which strategy—business or corporate level—should a firm develop first? Describe the
relationship between a firm’s business- and corporate-level strategies.
3. Cite examples of operational plans that you use or encounter (now or in the past) at work, at
school, or in your personal life. 1.
Managers should balance both, but long-term goals deserve more attention because they ensure sustainability and growth.
If there’s conflict, long-term goals should take priority since short-term results depend on them. 2.
A firm should develop its corporate-level
strategy first, as it defines the overall direction and scope.
Business-level strategies then support it by deciding how to compete in specific markets. 3.
Examples: creating a study schedule for exams, setting a work shift plan, or making a monthly
budget — all are operational plans for daily or short-term tasks.
QUESTIONS FOR APPLICATION
1. Interview the head or director of the department in which you are majoring. What kinds of
goals exist for the department and for the members of the department? Share your findings with the rest of the class.
2. Interview a manager and categorize the business- and corporate-level strategies of his or her
organization according to Porter’s generic strategies and extent of diversification.
3. Use online resources to find one example each of businesses following a single-product
strategy, a related diversification strategy, and an unrelated diversification
strategy. What level of performance would you expect from each firm, based on its strategy?
Examine the firm’s profitability to see whether your expectations were accurate. 1.
The department head said the goals include improving teaching quality, increasing research
output, and supporting student success.
Members focus on professional development, collaboration, and academic achievement to reach these goals. 2.
The manager’s company uses Porter’s differentiation strategy by offering high-quality, customized services.
At the corporate level, it follows related diversification by expanding into similar service areas
to share expertise and customers. 3.
Single-product: Coca-Cola (mainly beverages) – stable performance with strong brand loyalty.
Related diversification: Apple (phones, laptops, watches) – high performance from synergy.
Unrelated diversification: Tata Group (cars, hotels, steel) – mixed performance due to varied markets.
Profitability generally matches these expectations: Apple and Coca-Cola show high
returns, while Tata’s vary by industry.