Fundamentals of Management, 8th ed

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