CHAPTER 4 PLANNING

Introduction Plans – Methods formulated beforehand for achieving a desired result. – Plans should specify at minimum what will you do, how you will do it and by when you will get it done. Planning – The process of establishing objectives and courses of action, prior to taking action. – Shall be consider as your goals or objectives

Plans differ in 3 things: – Different format example: descriptive plans, budgets, graphic plan – Different time horizons example: top management engages in long-term strategic plan. – Different frequency Standing plans – made to be used repeatedly example: policies, procedures, rules Single-use – made to be used just once example: company long-term strategic plans

Types of Plans Strategic plans – Focus on the broad future of the organization – Cover the major aspects of the organization including its products, services, finances, technology and human resources. – Usually for long-term goals of the organization Tactical plans – Translate strategic plans into specific goals for specific parts of the organization. – Have shorter time frames and to be narrower in scope. – Typically affect a single business unit within an organization.

Types of Plans Operational plans – Translate tactical plans into specific goals and actions for small units of the organization – Usually for short-term (12 months or less) – The least complex of the 3 plans – Rarely have an impact beyond the department or unit for which the plan was developed.

Advantages of Planning Planning provides direction Planning reduces piecemeal decision making Planning reveals future opportunities and threats Planning facilitates control

Step in Planning

Planning process 1)Steps in Planning Establishobjectives Analyze situation/ create planning premises Determine alternative courses of action Evaluatealternatives Choose and implement plan

2) Analyzing the Environment Forecast – To estimate, calculate or to predict something – Can be made for virtually any critical element managers believe could affect the organization or their area of responsibility. Environment Uncertainty – the condition being uncertain, doubt – The extent of uncertainty in the environment affects the utility of forecast and other assessments in environment. Benchmarking – The investigation of the best result among competitors and noncompetitors and the practices that lead to those results.

3) Setting Objectives Objectives are the target forward which plans are aimed, and the anchor-points around which the hierarchy of objectives is constructed. Manager performance can be see from whether he or she achieves his or her unit’s goals or objectives. Objectives can also aid motivation.

4) Developing Action Plans Sequence and Timing Accountability

5) Implementing Plans Monitoring Implementation – Monitor the progress of the plan. – Monitor the level of support that the plan receives as it is being implemented. – Monitor the level of resistance. Time adjustment – As a manager working in a changing environment, you need to plan the way a fire department does. – As a manager you need to foster in your people recognition and acceptance of the skill needed to adapt plans as adaptability in your subordinates.

6) Monitoring Outcomes The final element in the planning process If the objectives have been well defined from the outset of planning, there should be little question what outcomes are to be monitored or how they are to be measured.

Goal-setting studies Provides useful insights into setting effective goals The implications of goal-setting studies are: – Assign specific goals – Assign measurable goals – Assign challenge but doable goals – Encourage participation where possible

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 3–15 Management by Objectives Management by Objectives (MBO) – A system in which specific performance objectives are jointly determined by subordinates and their supervisors, progress toward objectives is periodically reviewed, and rewards are allocated on the basis of that progress. – Links individual and unit performance objectives at all levels with overall organizational objectives. – Focuses operational efforts on organizationally important results. – Motivates rather than controls.

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 3–16 Elements of MBO Goal specificity Participative decision making Explicit time period for performance Performance feedback

5 steps of MBO process 1)Set organization’ goals Top management sets strategic goals for the company. 2) Set department’s goals Department heads and their superiors jointly set supporting goals for their departments. 3)Discuss departments’ goals Department heads present departments’ goals and ask all subordinates to develop their own individual goals.

4)Set individual goals. Goals are set for each subordinate, and a timetable is assigned for accomplishing those goals 5)Feedback The supervisor and subordinate meet periodically to review the subordinate’s performance and to monitor and analyze progress toward his or her goals.

10 Basic planning-related activities Act as information resources Conduct competitor ad market research Develop forecast Provide consulting services Create a common language Communicate values Communicate companywide objectives Serve as planning-process guardian Develop planning methods Lead planning teams