plan. Because tactical plans allow the organization to react to changes in the environment while continuing to focus on the company’s overall strategy, management must periodically review and update them. Declining performance or failure to meet objectives set out in tactical plans may be one reason for revising them.7
Operational plans are very short term and specify what actions specific individuals, work groups, or departments need to accomplish in order to achieve the tactical plan and ultimately the strategic plan. They apply to details in executing activities in one month, week, or even day. 8
Another element of planning is crisis management or contingency planning, which deals with potential disasters such as product tampering, oil spills, fire, earthquake, computer viruses, or even a reputation crisis due to unethical or illegal conduct by one or more employees. Unfortunately, many businesses do not have updated contingency plans to handle the types of crises that their companies might encounter. Approximately 51 percent of companies have outdated disaster recovery and business continuity plans. Businesses that have correct and well-thought-out contingency plans tend to respond more effectively when problems occur than do businesses who lack such planning.Herbalife does business in 90 countries, and contingency plans must often be made for fluctuating exchange rates.9
Rarely are individuals in an organization able to achieve common goals without some form of structure. Organizing is the structuring of resources and activities to accomplish objectives in an efficient and effective manner. Organizing is important for several reasons. It helps create synergy, whereby the effect of a whole system equals more than that of its parts. It also establishes lines of authority, improves communication, helps avoid duplication of resources, and can improve competitiveness by speeding up decision making. Organizing occurs continuously because change is inevitable.10
Once managers have determined what work is to be done and how it is to be organized, they must ensure that the organization has enough employees with appropriate skills to do the work. Hiring people to carry out the work of the organization is known as staffing. Beyond recruiting people for positions within the firm, managers must determine what skills are needed for specific jobs, how to motivate and train employees, how much to pay, what benefits to provide, and how to prepare employees for higher-level jobs in the firm at a later date.11
Another aspect of staffing is downsizing, the elimination of significant numbers of employees from an organization, which has been a pervasive and much-talked-about trend. Staffing can be outsourced to companies that focus on hiring and managing employees. Many firms downsize by outsourcing production, sales, and technical positions to companies in other countries with lower labor costs. Downsizing has helped numerous firms reduce costs quickly and become more profitable (or become profitable after lengthy losses) in a short period of time.
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- Spring '14