The formal planning steps are analyzing the situation, generating alternatives, evaluating them, selecting goals and plans, implementing them, and monitoring and controlling performance.
LO.2. How should strategic planning be integrated with tactical and operational planning?
Strategic planning sets the long-term direction for a firm.
Tactical planning translates broad strategic goals into specific plans for a particular part of the organization.
Operational planning identifies specific procedures and processes for lower levels of the organization.
LO.3. Can you describe how strategy is based on analysis of the external environment and the firm’s strengths and weaknesses?
Managers analyze the organization’s external opportunities and threats to formulate a strategy.
Internal strengths and weaknesses of the organization determine its resources and core competencies.
LO.4. How can companies achieve competitive advantage through business strategy?
Low-cost strategies allow a company to build a competitive advantage by being efficient and offering standard, no-frills products.
Differentiation strategies foster a competitive advantage by distinguishing a firm as unique in its industry.
LO.5. Can you identify the keys to effective strategy implementation?
Keys to effective strategy implementation are defining strategic tasks, assessing organization capabilities, developing an implementation agenda, and creating an implementation plan.
LO.6. How can you make effective decisions as a manager?
Managers can determine which decisions are programmed and which nonprogrammed, reduce uncertainty, and manage risks.
Formal decision making has six stages: identifying and diagnosing the problem, generating alternatives, evaluating alternatives, making the choice, implementing the decision, and evaluating it.
LO.7. What are the principles for group decision-making?
Groups are effective decision makers when they have more information, consider a greater number of perspectives, provide intellectual stimulation, help more people understand the decision, and generate commitment to the decision.
Groups are ineffective decision makers when one member dominates the discussion, they settle for a solution that is less than optimal, they pressure members to avoid disagreement, or they displace original goals with less important ones.
The hallmark of effective goals is the acronym SMART, which stands for specific, measurable, attainable, relevant, time-bound. Plans are the actions or means the manager intends to use to achieve goals.
Erica’s manager has asked her to develop different scenarios, or narratives that describe a particular set of future conditions, during her planning.
An organization’s CEO is most likely to be involved in strategic planning to set long-term goals.
To help support the company’s overall profitability goals, Chen Lu has been asked to come up with specific goals and plans for the accounting department. She needs to develop tactical plans.
As a frontline manager, Ross needs to develop specific procedures and processes for his engineers. Ross needs to do operational planning.
Strategic planning involves developing a/an mission, a/an vision and goals for the