Convenience

Chapter 3:
Planning and Strategic Management
8 9
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• An organization pursues a strategy of unrelated
diversification when it operates a set of busi-
nesses that are not logically associated with one
another.
• Organizations manage diversification through
the organization structure that they adopt and
through portfolio management techniques. The
BCG matrix classifies an organization’s diver-
sified businesses as dogs, cash cows, question
marks, or stars according to market share and
market growth rate. The GE Business Screen
classifies businesses as winners, losers, question
marks, average businesses, or profit producers
according to industry attractiveness and com-
petitive position.
6.
Discuss how tactical plans are developed and
executed.
• Tactical plans are at the middle of the organi-
zation, have an intermediate time horizon, and
are moderate in scope.
• Tactical plans are developed to implement
specific parts of a strategic plan.
• Tactical plans must flow from strategy, specify
resource and time issues, and commit human
resources.
7.
Describe the basic types of operational plans used
by organizations.
• Operational plans are at the lower level of the
organization, have a shorter time horizon, and
are narrower in scope. They are derived from a
tactical plan and are aimed at achieving one or
more operational goals.
• Two major types of operational plans are
single-use and standing plans. Single-use plans
are designed to carry out a course of action that
is not likely to be repeated in the future. Pro-
grams and projects are examples of single-use
plans. Standing plans are designed to carry out
a course of action that is likely to be repeated
several times. Policies, SOPs, and rules and
regulations are all standing plans.
• Contingency planning and crisis management
are also emerging as very important forms of
operational planning.
DISCUSSION QUESTIONS