Principles of management - Week # 5

Chapter 6 - The Basics of Planning and project management.

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Planning is the first step of project management.

On this chapter we have learned about the various steps of project planning and management.

We have discussed the following issues:

- Stages of planning

- Planning tools such as Gantt charts, Pert networks and Break-even analysis.

- Dealing with uncertainty (State uncertainty, Effect uncertainty and Response uncertainty).

- Various responses to uncertainty: Defenders, Prospectors, Analyzers and Reactors.

- What is a plan (a specific, documented intention consisting of an objective and an action

statement).

- What is a well written mission statement.

- Types of planning (Strategic, Intermediate and Operational planning).

- The importance of objectives.

- Defining priorities.

- The planning/control cycle.

- MBO (management by objectives).

- The project life cycle.

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A Well written mission statement:

*Defines your organization for key stakeholders.

*Creates an inspiring vision of what the organization can be and can do.

*Outlines how the vision is to be accomplished.

*Establishes key priorities.

*States a common goal and fosters a sense of togetherness.

*Creates a philosophical anchor for all organizational activities.

*Generates enthusiasm and a "can do" attitude.

*Empowers present and future organization members to believe that every individual is the key to success.

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Just some personal thoughts....

When reading this chapter and answering the discussion questions, I was trying to see if my last workplace had what you would define as a "well written mission statement".

I think I can definitely say we had a "togetherness" feel to our work environment, and a general "can do" attitude around the office. Especially on crisis times (and god knows we had alot of those when working in the tourism field in Israel between the years of 1993 and 2001, ever since I left the army and until the day I quit my job to relocate to the United States).

We did have a philosophical anchor for our organizational activities - we were these to

make tourism bloom... and to stand out as a the best Incoming tour operator in Israel...

We had a plan to make money and get more clients. We got the feeling from our management that we were important for the business's success... and we were well rewarded for our work.

I think that our mission statement was a good one, and I still have some good memories from that place...

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Closing case # 3 - Healthy fast food? That’s the plan?

----------------------------------------------------- Summary: Gary Hirshberg is the chairman of O’Natural – chain of organic fast food restaurants. Hirshberg is also the president and CEO of Stonyfield Yogurt Company in New Hampshire. The article talks about the innovative idea and the management guidelines followed by Hirshberg and his colleague – that will probably drive them to success.

Questions & Answers:

1. On a scale of 1= a sure flop to 10 = a sure winner, how would you rate the probable success of O’Naturals? Explain. Reply: I would grade O’Naturals probable success a 9 on a scale of 1-10, leaving a small probable chance of failure only because I believe the American population is still mostly “hooked-up” on unhealthy fast foods. I think most of the population is still not aware of the importance of healthy nutrition and not even aware of the danger and possible damage that can be caused by consuming junk-food. However – I think O’Naturals has a great chance of succeeding because the principles followed by its management seem to be on the right track: careful planning, slow growth with lots of attention to quality of products and service, rewarding employees – all seem to be right and “on the ball” .

2. Is O’Naturals a defender, prospector, analyzer or reactor? Why? Is this a strategic advantage or disadvantage? Explain. Reply: I think O’Naturals is a prospector because the company makes things happen and market a product that hasn’t been out on the market before: family friendly, tasty, natural and organic fast food chain. I think this is an advantage on one hand because they have no competition and they provide a product that is being craved for by the public. However – the disadvantage is not being able to compare actions and products with competitors and not being able to avoid mistakes done by others.

3. How would you rate O’Naturals mission statement relative to the eight criteria for a well written mission statement presented in this chapter? Explain. Reply: O’Naturals mission statement as it appears on their website states that: At O’Naturals we believe: You are what you eat. Organic and natural foods are better for you and the planet too. We have a responsibility to prepare and serve food in the most environmentally responsible ways possible. We are borrowing the planet from our children. Food should be beautiful, delicious and fun. I think that O’Naturals has created a mission statement that is positive and correct. The statement defines the organization as an organic food chain that is better for people and for the planet. It outlines how the company’s vision should be accomplished. It establishes key priorities (to prepare and serve food in the most environmentally responsible ways possible). It creates a philosophical anchor (we are borrowing the planet from our children; food should be beautiful, delicious and fun). It states a common goal (organic foods are better for you, me and for the planet) and thus fosters a sense of togetherness. It generates enthusiasm and a “can do” attitude, and it empowers all to believe that every individual is the key to success. I would say O’Naturals mission statement is just perfect according to the standards brought in this chapter.

4. Will Hirshberg and McCabe need to engage in any project / planning management? Explain. Reply: I believe that the founders and presidents of the company will have to engage in project / planning management because they intend to expand their business. Growth requires conceptualization, careful planning, execution and termination - according to the project’s life cycle explained in this chapter. Therefore in order to drive the company to success – management will have to be involved in all future plans.

5. Making reasonable assumptions, what will be the major fixed and variable costs when O’Naturals’ managers attempt to calculate a break-even point? Reply: The major fixed costs will be: Managerial staff salaries, rent, utilities, taxes, insurance premiums. The major variable costs will be: food products and materials, employee salaries, delivery costs, commissions.