Chapter 7 Essentials of Planning. Chapter 6/Essentials of Planning Hilgert & Leonard © 2001 6-2 1.Define planning and clarify why all management functions.

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Presentation transcript:

Chapter 7 Essentials of Planning

Chapter 6/Essentials of Planning Hilgert & Leonard © Define planning and clarify why all management functions depend on planning. 2. Explain the concept of strategic planning and its relationship to mission statements, and visioning. 3.Describe the supervisor’s role in organizational planning. 4.Identify the benefits of planning. 5.Explain the role of planning in quality improvement and knowledge management. 1.Define planning and clarify why all management functions depend on planning. 2. Explain the concept of strategic planning and its relationship to mission statements, and visioning. 3.Describe the supervisor’s role in organizational planning. 4.Identify the benefits of planning. 5.Explain the role of planning in quality improvement and knowledge management. After studying this chapter, you will be able to:

Chapter 6/Essentials of Planning Hilgert & Leonard © Discuss the need for well-defined organiza- tional goals and objectives, particularly as they relate to the supervisor. 7.Explain management by objectives (MBO) and describe how it is applied. 8. Identify the major types of standing plans and explain how these are helpful in supervisory decision making. 9.Discuss the principal types of single-use plans in which supervisors plan an important role. 10.Discuss just-in-time inventory control systems and scheduling and planning tools. 6.Discuss the need for well-defined organiza- tional goals and objectives, particularly as they relate to the supervisor. 7.Explain management by objectives (MBO) and describe how it is applied. 8. Identify the major types of standing plans and explain how these are helpful in supervisory decision making. 9.Discuss the principal types of single-use plans in which supervisors plan an important role. 10.Discuss just-in-time inventory control systems and scheduling and planning tools. After studying this chapter, you will be able to:

Chapter 6/Essentials of Planning Hilgert & Leonard © WHY ALL MANAGEMENT FUNCTIONS DEPEND ON PLANNING Planning means deciding in advance what is to be in the future. It includes analyzing the situation, forecasting future events, establishing objectives, setting priorities, and deciding on actions necessary to meet objectives. Planning means deciding in advance what is to be in the future. It includes analyzing the situation, forecasting future events, establishing objectives, setting priorities, and deciding on actions necessary to meet objectives. Planning is a managerial function that every supervisor must perform every day. 1

Chapter 6/Essentials of Planning Hilgert & Leonard © STRATEGIC PLANNING AND ITS RELATIONSHIP TO MISSION STATEMENTS AND VISIONING Effective strategic planning usually begins with the mission statement and evolves by visioning. The process of visioning can be used at any managerial level. 2

Chapter 6/Essentials of Planning Hilgert & Leonard © STRATEGIC PLANNING AND ITS RELATIONSHIP TO MISSION STATEMENTS AND VISIONING Establishing goals and making decisions that will enable an organization to achieve its objectives. 2

Chapter 6/Essentials of Planning Hilgert & Leonard © STRATEGIC PLANNING AND ITS RELATIONSHIP TO MISSION STATEMENTS AND VISIONING Statement of the organization's basic philosophy, purpose, and reason for being. 2

Chapter 6/Essentials of Planning Hilgert & Leonard © STRATEGIC PLANNING AND ITS RELATIONSHIP TO MISSION STATEMENTS AND VISIONING Management’s view of what the company should become that reflects the firm’s core values, priorities, and goals. 2

Chapter 6/Essentials of Planning Hilgert & Leonard © THE SUPERVISOR’S ROLE IN ORGANIZATIONAL PLANNING Every manager in every level of an organization is involved in planning. Every manager in every level of an organization is involved in planning. Planning includes looking to the future and evaluating what has happened in the past. Planning includes looking to the future and evaluating what has happened in the past. In formulating plans, supervisors may need to call on expert help, and should consult with employees, especially for day-to-day plans. In formulating plans, supervisors may need to call on expert help, and should consult with employees, especially for day-to-day plans. Every manager in every level of an organization is involved in planning. Every manager in every level of an organization is involved in planning. Planning includes looking to the future and evaluating what has happened in the past. Planning includes looking to the future and evaluating what has happened in the past. In formulating plans, supervisors may need to call on expert help, and should consult with employees, especially for day-to-day plans. In formulating plans, supervisors may need to call on expert help, and should consult with employees, especially for day-to-day plans. 3

Chapter 6/Essentials of Planning Hilgert & Leonard © PLANNING PERIODS Strategic Plans —Long-range overall plans developed by top management Strategic Plans —Long-range overall plans developed by top management Tactical Plans —Annual or intermediate-range plans developed by middle managers and staff specialists Tactical Plans —Annual or intermediate-range plans developed by middle managers and staff specialists Operational Plans —Short-range plans to supervisors to cover specific areas and activities of accountability Operational Plans —Short-range plans to supervisors to cover specific areas and activities of accountability Strategic Plans —Long-range overall plans developed by top management Strategic Plans —Long-range overall plans developed by top management Tactical Plans —Annual or intermediate-range plans developed by middle managers and staff specialists Tactical Plans —Annual or intermediate-range plans developed by middle managers and staff specialists Operational Plans —Short-range plans to supervisors to cover specific areas and activities of accountability Operational Plans —Short-range plans to supervisors to cover specific areas and activities of accountability Planning periods may vary from short-range planning to long-range planning. 3

Chapter 6/Essentials of Planning Hilgert & Leonard © PLANNING FLOW Planning Periods 3

Chapter 6/Essentials of Planning Hilgert & Leonard © THE BENEFITS OF PLANNING Planning promotes efficiency and reduces waste and costs by eliminating haphazard approaches and duplication. Planning promotes efficiency and reduces waste and costs by eliminating haphazard approaches and duplication. Effective planning is an absolute requirement for a supervisor to be a successful manager. Effective planning is an absolute requirement for a supervisor to be a successful manager. Planning establishes objectives, standards, and targets that can serve as incentives for performance, measurement, and control. Planning establishes objectives, standards, and targets that can serve as incentives for performance, measurement, and control. Planning promotes efficiency and reduces waste and costs by eliminating haphazard approaches and duplication. Planning promotes efficiency and reduces waste and costs by eliminating haphazard approaches and duplication. Effective planning is an absolute requirement for a supervisor to be a successful manager. Effective planning is an absolute requirement for a supervisor to be a successful manager. Planning establishes objectives, standards, and targets that can serve as incentives for performance, measurement, and control. Planning establishes objectives, standards, and targets that can serve as incentives for performance, measurement, and control. 4

Chapter 6/Essentials of Planning Hilgert & Leonard © THE ROLE OF PLANNING IN QUALITY IMPROVEMENT AND KNOWLEDGE MANAGEMENT Total Quality Management — An organizational approach involving all employees in an effort to satisfy customers by continual improvement. In emerging commitment to quality, firms have turned to such strategies as... 5

Chapter 6/Essentials of Planning Hilgert & Leonard © Knowledge Management — Systematic storage, retrieval, dissemination, and sharing of information In emerging commitment to quality, firms have turned to such strategies as... PLANNING THE ROLE OF PLANNING IN QUALITY IMPROVEMENT AND KNOWLEDGE MANAGEMENT 5

Chapter 6/Essentials of Planning Hilgert & Leonard © Benchmarking — Identifying and improving on the practices of the leaders. In emerging commitment to quality, firms have turned to such strategies as... THE ROLE OF PLANNING IN QUALITY IMPROVEMENT AND KNOWLEDGE MANAGEMENT 5

Chapter 6/Essentials of Planning Hilgert & Leonard © Industry standards established to delimit outstanding achievement in quality improvement include: THE ROLE OF PLANNING IN QUALITY IMPROVEMENT AND KNOWLEDGE MANAGEMENT ISO 9000— Rigorous series of manufacturing quality standards created by the International Organization for Standardization. 5

Chapter 6/Essentials of Planning Hilgert & Leonard © Baldrige Quality Award— U.S. Department of Commerce award to outstanding firms that exemplify world-class quality standards. U.S. firms that exemplify excellent business quality while satisfying customer needs may be awarded the THE ROLE OF PLANNING IN QUALITY IMPROVEMENT AND KNOWLEDGE MANAGEMENT 5

Chapter 6/Essentials of Planning Hilgert & Leonard © A general statement of goals and objectives identifies purposes and results for all plans and activities. A general statement of goals and objectives identifies purposes and results for all plans and activities. Organizational goals become the general framework for more specific objectives for divisions and departments. Organizational goals become the general framework for more specific objectives for divisions and departments. State objectives in measurable or verifiable terms. State objectives in measurable or verifiable terms. A general statement of goals and objectives identifies purposes and results for all plans and activities. A general statement of goals and objectives identifies purposes and results for all plans and activities. Organizational goals become the general framework for more specific objectives for divisions and departments. Organizational goals become the general framework for more specific objectives for divisions and departments. State objectives in measurable or verifiable terms. State objectives in measurable or verifiable terms. THE NEED FOR WELL-DEFINED ORGANIZATIONAL GOALS AND OBJECTIVES 6

Chapter 6/Essentials of Planning Hilgert & Leonard © MANAGEMENT BY OBJECTIVES Participative management system through which jointly-set objectives are used for performance evaluation. 7

Chapter 6/Essentials of Planning Hilgert & Leonard © A STEP-BY-STEP MBO MODEL Top-level managers identify the major goals for the organization for the coming period. All managers, supervisors, and employees review their job descriptions to be sure they understand their responsibilities and authority. 7

Chapter 6/Essentials of Planning Hilgert & Leonard © A STEP-BY-STEP MBO MODEL All employees develop their own specific objectives in relation to the broader organizational and departmental objectives. Meetings must be arranged between all individuals and their supervisors to discuss the employee’s list of objectives. 7

Chapter 6/Essentials of Planning Hilgert & Leonard © A STEP-BY-STEP MBO MODEL Employees and their supervisors periodically review progress toward accomplishment of the agreed-upon objectives. Compare results against objectives at the end of a period. 7

Chapter 6/Essentials of Planning Hilgert & Leonard © THE MAJOR TYPES OF STANDING PLANS Standing Plan. Policies, procedures, methods, and rules that can be applied to recurring situations. Standing Plan. Policies, procedures, methods, and rules that can be applied to recurring situations. 8

Chapter 6/Essentials of Planning Hilgert & Leonard © THE MAJOR TYPES OF STANDING PLANS Policy —Serves as a guide to thinking when making decisions. Procedure —Defines the sequence of activities to be performed to achieve objectives. Method —Details how a single operation is to be performed. Rule —Directive that must be applied and enforced wherever applicable. Policy —Serves as a guide to thinking when making decisions. Procedure —Defines the sequence of activities to be performed to achieve objectives. Method —Details how a single operation is to be performed. Rule —Directive that must be applied and enforced wherever applicable. 8

Chapter 6/Essentials of Planning Hilgert & Leonard © POLICIESPOLICIES Effective policies promote consistency of decision making. Effective policies promote consistency of decision making. Major company-wide policies are originated by top-level managers. Major company-wide policies are originated by top-level managers. Companies must also comply with externally imposed policies. Supervisors rarely issue policies, but have to apply existing policies. Supervisors rarely issue policies, but have to apply existing policies. Effective policies promote consistency of decision making. Effective policies promote consistency of decision making. Major company-wide policies are originated by top-level managers. Major company-wide policies are originated by top-level managers. Companies must also comply with externally imposed policies. Supervisors rarely issue policies, but have to apply existing policies. Supervisors rarely issue policies, but have to apply existing policies. 8

Chapter 6/Essentials of Planning Hilgert & Leonard © PROCEDURESPROCEDURES Like policies, procedures are standing plans for achieving objectives, but are more specific. Like policies, procedures are standing plans for achieving objectives, but are more specific. Are guides to action rather than guides to thinking. Are guides to action rather than guides to thinking. Advantages of procedures include: Advantages of procedures include: require analyses of work to be done require analyses of work to be done reduce the need for routine decision making reduce the need for routine decision making encourage a predictable outcome encourage a predictable outcome provide the supervisor with a standard for appraising work done by employees. provide the supervisor with a standard for appraising work done by employees. Like policies, procedures are standing plans for achieving objectives, but are more specific. Like policies, procedures are standing plans for achieving objectives, but are more specific. Are guides to action rather than guides to thinking. Are guides to action rather than guides to thinking. Advantages of procedures include: Advantages of procedures include: require analyses of work to be done require analyses of work to be done reduce the need for routine decision making reduce the need for routine decision making encourage a predictable outcome encourage a predictable outcome provide the supervisor with a standard for appraising work done by employees. provide the supervisor with a standard for appraising work done by employees. 8

Chapter 6/Essentials of Planning Hilgert & Leonard © METHODSMETHODS A standing plan for action, but more detailed than a procedure. A standing plan for action, but more detailed than a procedure. Supervisors must often determine the “best method” of doing a particular job. Supervisors must often determine the “best method” of doing a particular job. For some activities, supervisors do not have to be concerned with devising procedures and methods because employees have been trained in standard methods. For some activities, supervisors do not have to be concerned with devising procedures and methods because employees have been trained in standard methods. A standing plan for action, but more detailed than a procedure. A standing plan for action, but more detailed than a procedure. Supervisors must often determine the “best method” of doing a particular job. Supervisors must often determine the “best method” of doing a particular job. For some activities, supervisors do not have to be concerned with devising procedures and methods because employees have been trained in standard methods. For some activities, supervisors do not have to be concerned with devising procedures and methods because employees have been trained in standard methods. 8

Chapter 6/Essentials of Planning Hilgert & Leonard © RULESRULES Also a standing plan devised to attain objec- tives, it is different from a policy, procedure, or method. Also a standing plan devised to attain objec- tives, it is different from a policy, procedure, or method. A guide to action, but does not provide a set of steps or time sequence. A guide to action, but does not provide a set of steps or time sequence. Supervisors sometime have to devise their own rules or see that company rules are obeyed. Supervisors sometime have to devise their own rules or see that company rules are obeyed. Also a standing plan devised to attain objec- tives, it is different from a policy, procedure, or method. Also a standing plan devised to attain objec- tives, it is different from a policy, procedure, or method. A guide to action, but does not provide a set of steps or time sequence. A guide to action, but does not provide a set of steps or time sequence. Supervisors sometime have to devise their own rules or see that company rules are obeyed. Supervisors sometime have to devise their own rules or see that company rules are obeyed. 8

Chapter 6/Essentials of Planning Hilgert & Leonard © PRINCIPLE TYPES OF SINGLE-USE PLANS Single-use Plans Plans developed to accomplish a specific objective or to cover only a designated time period. Single-use Plans Plans developed to accomplish a specific objective or to cover only a designated time period. 9

Chapter 6/Essentials of Planning Hilgert & Leonard © PRINCIPLE TYPES OF SINGLE-USE PLANS Budget —Expresses anticipated results in numerical—usually financial—terms for a stated period of time. Program —Plan for a large undertaking related to the organization’s goals and objectives. Project —Plan for a specific, nonrecurring activity. Budget —Expresses anticipated results in numerical—usually financial—terms for a stated period of time. Program —Plan for a large undertaking related to the organization’s goals and objectives. Project —Plan for a specific, nonrecurring activity. 9

Chapter 6/Essentials of Planning Hilgert & Leonard © BUDGETSBUDGETS Budgets are part of planning, and supervisors often have a part in preparing them. Budgets are part of planning, and supervisors often have a part in preparing them. Supervisors must periodically review budgets for variations and changes, and make adjustments accordingly. Supervisors must periodically review budgets for variations and changes, and make adjustments accordingly. Budgets are part of planning, and supervisors often have a part in preparing them. Budgets are part of planning, and supervisors often have a part in preparing them. Supervisors must periodically review budgets for variations and changes, and make adjustments accordingly. Supervisors must periodically review budgets for variations and changes, and make adjustments accordingly. 9

Chapter 6/Essentials of Planning Hilgert & Leonard © PROGRAMS AND PROJECTS Programs may take several years to accomplish. Programs may take several years to accomplish. A project may be part of a program, but is also an undertaking that can be planned and fulfilled as a distinct entity, usually within a relatively short period of time. A project may be part of a program, but is also an undertaking that can be planned and fulfilled as a distinct entity, usually within a relatively short period of time. Supervisors are usually more involved in planning projects. Supervisors are usually more involved in planning projects. Programs may take several years to accomplish. Programs may take several years to accomplish. A project may be part of a program, but is also an undertaking that can be planned and fulfilled as a distinct entity, usually within a relatively short period of time. A project may be part of a program, but is also an undertaking that can be planned and fulfilled as a distinct entity, usually within a relatively short period of time. Supervisors are usually more involved in planning projects. Supervisors are usually more involved in planning projects. 9

Chapter 6/Essentials of Planning Hilgert & Leonard © PLANNING TOOLS Just-in-time Inventory Control System —System for scheduling materials to arrive precisely when they are needed in the production process. Kanban —Another name for a just-in-time inventory control system. Just-in-time Inventory Control System —System for scheduling materials to arrive precisely when they are needed in the production process. Kanban —Another name for a just-in-time inventory control system. 10

Chapter 6/Essentials of Planning Hilgert & Leonard © SCHEDULING AND PROJECT PLANNING Scheduling is the process of developing a detailed list of activities, their sequence, and the required resources. One well-known project planning tool is the Gantt chart, a graphic scheduling technique that shows the activity to be scheduled on the vertical axis and necessary completion dates on the horizontal axis. 10

Chapter 6/Essentials of Planning Hilgert & Leonard © EXAMPLE OF GANTT CHART 10

Chapter 6/Essentials of Planning Hilgert & Leonard © PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT) Another project planning tool is PERT, a flowchart for managing large programs and projects showing necessary activities with estimates of time needed to complete each activity and sequential relationships among them. PERT helps supervision think strategically. Some of the steps involved are: PERT Event —Beginning and/or ending of an activity PERT Event —Beginning and/or ending of an activity PERT Activity —Specific task to be accomplished PERT Activity —Specific task to be accomplished Critical Path —Path of activities in the PERT network that will take the longest time to complete. Critical Path —Path of activities in the PERT network that will take the longest time to complete. Another project planning tool is PERT, a flowchart for managing large programs and projects showing necessary activities with estimates of time needed to complete each activity and sequential relationships among them. PERT helps supervision think strategically. Some of the steps involved are: PERT Event —Beginning and/or ending of an activity PERT Event —Beginning and/or ending of an activity PERT Activity —Specific task to be accomplished PERT Activity —Specific task to be accomplished Critical Path —Path of activities in the PERT network that will take the longest time to complete. Critical Path —Path of activities in the PERT network that will take the longest time to complete. 10

Chapter 6/Essentials of Planning Hilgert & Leonard © EXAMPLE OF PERT NETWORK 10

Chapter 6/Essentials of Planning Hilgert & Leonard © END