Chapter 5 study keys

1.Conrast formal with informal planning. Why planning is beneficial?
Planning can be further defined in terms of whether it's formal or informal. In informal planning, very little, if anything, is written down. What is to be acomplished is in the heads of one or few people. Informal planning generally describes the planning that takes place in many smaller bussinesses, the owner-manager has an idea of where he or she wants to go and how he or she expects to get there.

2.Describe in detail the six-step strategic management process?
Step1: Identifying the organization's current mission,goals, and strategies statement of the purpose of an organization imortant in profit and not for proit organizations important to identify the goals currently in place and the strategies currently being pursued.
Step2: Doing an external analysis, opportunities and threats. positive trends in the external enviroment negative trends in the internal enviroment
Step3: Doing an internal analysis, strenghts and weaknesses
Strengths: activities the organization does well or any unique resource
Weaknesses: activities the organization does not do well or resourcs it needs but does not posses
Step4: Formulating strategies
Require strategies at the corporate, business, and functional levels of the organization
Strategy formulation follows the decision making process
Step5: Implementing strategies
A strategy is only as good as its implementation
Step6: Evaluating results
Control process to determine the effectiveness of a strategy

3.What is a SWOT analysis, and why is it important to managers?
The combined external and internal analysis are called the SWOT analysis because its analysis of the organizations strengths, weaknesses, opportunities, and thrats. After completing the SWOT analysis, managers are ready to formulate appresiate strategies that is, strategies that exploit an organization's strengths and external opportunities.

4.''Organizations that fail to plan are planning to fail'' Do you agree or disagree with this statement?
I would agree to this statement because it is very important for every organization to plan ahead if it wants to survive in the industry. The competition is very strong and firms are always neck to neck and in order to gain a competitive advantage, every organization has to see where it stands in the industry and what are its strengths and weaknesses and also those of the each competitor.

5. Under what circumstances do you believe MBO would be most usefull?
MBO can be a very effective motivational tol, however, the established goals must be clearly defied and challenging yet attainable.

6.Find examples in current