Planning
Chapter 7
What is planning?
Setting goals, establishing a strategy, integrating and coordinating
activities
It commits the organization to specific courses of action for the future.
A plan answers specific questions:
-What goals are to be accomplished?
-When will the goals be accomplished?
-Where the plan will be executed?
-Who will perform tasks outlined in the plan?
-How much of the resources will be used to accomplish the plans?
Why do we plan?
1. Established a coordinated effort
2. Reduces uncertainty. It helps the managers to see where we are
going
3. Reduces overlap and waste
4. Establishes standards for the control process
Planning is not a waste of time (even if the plan fails)
Planning does not reduce flexibility!
Mission Statement
-References the core values of the organization
-What is our business?
-Central purpose of the company
Strategic plans
-Establish the overall objectives of the company
-Long term in nature (beyond 3 years)
-Directional in nature (guidelines)
-How it intends to grow, compete, meet the customer needs etc. in coming years
Leadership is important
The leader’s vision must be communicated to the employees.
Tactical Plans
-Medium range (Quarterly)
-Bigger picture (aggregate results)
-Strategy oriented
Operational plans
-Identify specific details as to how something is going to be
accomplished
-Short term
-Specific- Clearly defined
Single use plans- A one time plan used to meet a unique situation
--Programs
--Budgets
Standing plans- On going plans that are used repeatedly in the organization.
They are subject to periodic review.
--Policy-General statements about how individuals should handle routine behavior.
They set limits and boundaries for decision making.
--Procedure- Step by step directions for carrying out tasks
-- Rules- Usually ‘Do’ and ‘Do Not’ statements
Levels of management and type of plan (Planning changes as the level of management
changes)
Environmental uncertainty-
Affects planning
Criticisms of planning
-Planning can be too rigid.
-Plans cannot be developed for dynamic environments.
-Formal planning cannot replace intuition and creativity.
-Planning success sometimes creates a false sense of security.
Objectives :
A desired set of outcomes
This is the most important step in planning.
Review Table 7.2
Management by Objectives
Joint effort of planning between subordinates and managers
The Basic Planning Process
1. Setting Objectives
-ST. and LT. targets
-Influenced by management
-Subject to policies, plans
-Corporate culture
-Mission
2. Analyzing and Evaluating the Environment (boundary spanning)
-Present situation
-Money
-Policies, etc.
-Staffing
-Time Constraints
3. Identify Alternatives
-Brain storm
4. Evaluate Alternatives
-Alternatives may not be feasible give time and money constraints
5. Selection of the Best
solution
6. Implementing The Plan
7. Control and evaluating the results
Making Plans More Effective
-Improving the quality of assumptions and Forecasts
-MBO
-Linear programming
-Participation
-Research
Barriers to Planning
-Inability to plan
-Lack of Commitment to the planning process
-Inferior information
-Lack of focus on the long term
Chapter 7
Key Points
1. Planning
2. Types of plans
3. Levels of Mgmt. and Planning
4. Single use and Standing plans
5. Mission Statement
6. MBO
7. Objections to planning
8. Planning Process