REVIEW AND APPLICATIONS
CHAPTER SUMMARY
5-1 Discuss the nature and purposes of planning. As the primary management function,
planning establishes the basis for all the other things that managers do. The planning
we’re concerned with is formal planning; that is, specific goals covering a specific time
5-2 Explain what managers do in the strategic management process. Managers develop
the organization’s strategies in the strategic management process, which is a six-step
process encompassing strategy planning, implementation, and evaluation. The six steps
are as follows: (1) Identify the organization’s current mission, goals, and strategies; (2)
5-3 Compare and contrast approaches to goal setting and planning. Most company’s
goals are classified as either strategic or financial. We can also look at goals as either
stated or real. In traditional goal setting, goals set by top managers flow down through the
5-4 Discuss contemporary issues in planning. One contemporary planning issue is
planning in dynamic environments, which usually means developing plans that are
specific but flexible. Also, it’s important to continue planning even when the environment
DISCUSSION QUESTIONS
5-1 Contrast formal with informal planning.
Answer: In informal planning, very little, if anything, is written down. In formal planning,
5-2 Discuss why planning is beneficial.
5-3 Describe in detail the six-step strategic management process.
Answer: The strategic management process is made up of six steps: (1) identify the
organization’s current mission, objectives, and strategies, (2) analyze the external
5-4 What is a SWOT analysis and why is it important to managers?
“Organizations that fail to plan are planning to fail.” Do you agree or disagree with this
statement? Explain your position.
Answer: Students may agree or disagree. If they agree, they may argue that the discipline of
planning provides a framework for thinking through decisions and the future. Whether
5-5 Under what circumstances do you believe MBO would be most useful? Discuss.
Answer: MBO is of value for converting overall objectives into specific objectives for
organizational units and individual members. MBO makes objectives operational by
5-6 Describe how managers can plan in today’s dynamic environment.
Answer: Developing plans that are specific, but flexible are important in today’s dynamic
5-7 What types of planning do you do in your personal life? Describe these plans in terms of
being (a) strategic or operational, (b) short-term or long-term, (c) specific or directional,
and (d) single-use or standing.
Answer: Students’ responses to this question will, of course, vary. Students may mention
5-8 Do a personal SWOT analysis. Assess your personal strengths and weaknesses (skills,
talents). What are you good at? What are you not so good at? What do you enjoy doing?
Not enjoy doing? Then, identify career opportunities and threats by researching job
prospects in the industry you’re interested in. Look at trends and projections. You might
want to check out the information the Bureau of Labor Statistics provides on job prospects.
Once you have all this information, write a specific career action plan. Outline five-year
career goals and what you need to do to achieve those goals.
Answer: Responses will be specific to the respective student.
5-9 “The concept of competitive advantage is as important for not-for-profit organizations
as it is for for-profit organizations.” Do you agree or disagree with this statement? Explain,
using examples to make your case.
Answer: The process of planning is similar, but the content of the plans will differ. The types
of objectives that are established and the plans that are formulated will be influenced by the
MyManagementLab
Students can find the following assisted-graded writing questions at mymanagementlab.com.
Answers to these questions are graded against rubrics in the MyLab.
5-10 Will planning become more or less important to managers in the future? Why?
5-11 How could the Internet be helpful to managers as they follow the steps in the strategic
management process?
Management Skill Builder: Being a Good Goal Setter
Managers are typically judged on their ability to achieve goals. If individuals or units in the
organization lack goals, there can be no direction or unity of effort. Successful managers must be
good at setting their own goals and helping others set goals. In this section, students will learn
more about their own preferences for setting goals and build upon the skills that lead to greater
success in accomplishing them.
Personal Inventory Assessment: Tolerance of Ambiguity Scale
Managers often have to deal with ambiguous situations, which can make planning very
challenging. In this PIA, you’ll assess your level of tolerance for ambiguity.
Skill Basics
Students can be more effective at setting goals if they use the following eight
suggestions:
Identify an employee’s key job tasks.
Establish measurable, specific, and challenging goals for each key task.
Specify the deadlines for each goal.
Allow the employee to participate actively.
Prioritize goals.
Rate goals for difficulty and importance.
Build in feedback mechanisms to assess goal progress.
Link rewards to goal attainment.
Practicing the Skill
Read through this scenario and follow the directions at the end of it:
You worked your way through college while holding down a part-time job bagging
groceries at the Food Town supermarket chain. You liked working in the food industry,
and when you graduated, you accepted a position with Food Town as a management
trainee. Three years have passed and you’ve gained experience in the grocery store
industry and in operating a large supermarket. Several months ago, you received a
promotion to store manager at one of the chain’s locations. One of the things you’ve
liked about Food Town is that it gives managers a great deal of autonomy in running their
stores. The company provides very good guidelines to its managers. Top management is
concerned with the bottom line: for the most part, how you get there is up to you. Now
that you’re finally a store manager, you want to establish an MBO-type program in your
store. You like the idea that everyone should have clear goals to work toward and then be
evaluated against those goals.
Your store employs 70 people, most work only 20 to 30 hours per week, except for the
managers. You have six people reporting directly to you: an assistant manager; a
weekend manager; and grocery, produce, meat, and bakery managers. The only highly
skilled jobs belong to the butchers, who have strict training and regulatory guidelines.
Other less-skilled jobs include cashier, shelf stocker, maintenance worker, and grocery
bagger.
Specifically describe how you would go about setting goals in your new position.
Include examples of goals for the job of butcher, cashier, and bakery manager.
Experiential Exercise
Winwood Performance Plus
To: Hannah Paul, Human Resources Manager
From: Eric Winwood, CEO
Subject: Environmental Issues
Hannah’s boss is pushing the company to become more environmentally responsible. As part of
this effort, he has asked Hannah to create a company-wide program for controlling paper waste.
Before the company gets their associates involved, you need to set some goals and develop some
plans for this program. Your boss would like a report (keep it to one page, please) that outlines
these goals and plans as soon as you can.
Teaching Tip: There are many examples of companies that have gone paperless. These
plans and tips to success are posted on a variety of Web sites. While the content of
student plans may vary, they should follow the principles laid out in the text for
well-written goals:
1. Written in terms of outcomes
2. Measurable and quantifiable
3. Clear as to a time frame
4. Challenging yet attainable
5. Written down (obviously)
6. Communicated to all organizational members
Case Application 1: Fast Fashion
Discussion Questions
5-14 How is strategic management illustrated by this case story?
5-15 How might SWOT analysis be helpful to Inditex executives? To Zara store managers?
5-16 What competitive advantage do you think Zara is pursuing? How does it exploit that
competitive advantage?
5-17 Do you think Zara’s success is due to external or internal factors or both? Explain.
5-18 What strategic implications does Zara’s move into online retailing have? (Hint: Think in
terms of resources and capabilities.)
Responses will vary based on the student but one example could look like this. It is
Case Application 2: Crisis Planning at Livestrong Foundation
Discussion Questions
5-19 Could an organization even plan for this type of situation? If yes, how? If not, why not?
5-20 How would goals be useful in this type of situation? What types of goals might be
necessary?
5-21 What types of plans will be useful to Livestrong? Explain why you think these plans would
be important.
5-22 What lesson about planning can managers learn from what Livestrong has endured?
Students’ responses will vary, but will probably focus on the importance of having
Case Application 3: Eying the Future
Discussion Questions
5-23 What role do you think goals might play in planning for Warby Parker’s future? List some
goals you think might be important. (Make sure these goals have the characteristics of
well-written goals.)
5-24 What types of plans would be needed in an industry such as this one? (For instance,
long-term or short-term, or both?) Explain why you think these plans would be important.
5-25 What contingency factors might affect the planning Warby Parker executives do? How
might those contingency factors affect the planning?
5-26 What competitive advantage(s) do you think Warby Parker has? What competitive
challenges do you think the company faces?