Planning Processes and Techniques

Why and how do managers plan? What types of plans do managers use? Study Questions Why and how do managers plan? What types of plans do managers use? What are the useful planning tools and techniques? How can plans be well implemented?

Study Question 1: Why and how do managers plan? Planning The process of setting objectives and determining how to best accomplish them. Objectives Identify the specific results or desired outcomes that one intends to achieve. Plan A statement of action steps to be taken in order to accomplish the objectives.

Study Question 1: Why and how do managers plan? Steps in the planning process: Define your objectives. Determine where you stand vis-à-vis objectives. Develop future plans according to conditions. Analyze and choose among action alternatives. Implement the plan and evaluate results.

Figure 7.1 The roles of planning and controlling in the management process.

Study Question 1: Why and how do managers plan? Benefits of planning: Improves focus and flexibility. Improves action orientation (results, priority, advantage & change orientation). Improves coordination. Improves time management. Improves control.

Study Question 1: Why and how do managers plan? Personal Time Management Tips: DO say “no” to requests that distract from what you should be doing. DON’T get bogged down in details that can be addressed later. DO screen telephone calls, emails, and meeting requests.

Study Question 1: Why and how do managers plan? Personal Time Management Tips: DON’T let drop-in visitors or instant messages use up your time DO prioritize your important and urgent work DON’T become calendar bound by letting others control your schedule DO follow priorities; do most important and urgent work first.

Study Question 2: What types of plans do managers use? Short-range and long-range plans Short-range plans = 1 year or less Intermediate-range plans = 1 to 2 years Long-range plans = 3 or more years People vary in their capability to deal effectively with different time horizons. Higher management levels focus on longer time horizons.

Study Question 2: What types of plans do managers use? Strategic and operational plans Strategic plans — set broad, comprehensive, and longer-term action directions for the entire organization. Operational plans — define what needs to be done in specific areas to implement strategic plans. Production plans Financial plans Facilities plans Marketing plans Human resource plans Logistic plans

Study Question 2: What types of plans do managers use? Policies and procedures Standing plans Policies and procedures that are designed for repeated use. Policy Broad guidelines for making decisions and taking action in specific circumstances. Rules or procedures Plans that describe exactly what actions are to be taken in specific situations.

Study Question 2: What types of plans do managers use? Budgets and project schedules Single-use plans Only used once to meet the needs and objectives of a well-defined situation in a timely manner. Budgets Single-use plans that commit resources to activities, projects, or programs. Fixed, flexible, and zero-based budgets. Projects One-time activities that have clear beginning and end points. Project management and project schedules.

Budget Fixed Flexible Zero-based Allocates a stated amount of resources for a specific purpose e.g. Rs. 200000 for equipment purchase in a given year Flexible Allows resources to vary in proportion with level of activities e.g. having funds for temporary employees if needed Zero-based In zero-based budget each new budget period is approached as a budgeting for a brand event

Projects Project Management Project Schedule Project management ensures that activities required to complete a project are planned well and accomplished on time Project Schedule Project schedule consists of a list of projects terminal elements with intended start and finish dates

Study Question 3: What are the useful planning tools and techniques? Forecasting Making assumptions about what will happen in the future. Qualitative forecasting uses expert opinions. Quantitative forecasting uses mathematical and statistical analysis. All forecasts rely on human judgment. Planning involves deciding on how to deal with the implications of a forecast.

Study Question 4: How can plans be well implemented? Gantt charts – graphic display of scheduled tasks required to complete a project CPM/PERT – a combination of the critical path method and the program evaluation and review technique Critical path – pathway from project start to finish that involves activities with the longest completion times

Study Question 3: What are the useful planning tools and techniques? Contingency planning Identifying alternative courses of action that can be implemented to meet the needs of changing circumstances. Contingency plans anticipate changing conditions.

Study Question 3: What are the useful planning tools and techniques? Scenario planning A long-term version of contingency planning. Identifying alternative future scenarios. Plans made for each future scenario. Increases organization’s flexibility and preparation for future shocks.

Study Question 3: What are the useful planning tools and techniques? Benchmarking Use of external comparisons to better evaluate current performance and identify possible actions for the future. Adopting best practices of other organizations that achieve superior performance.

Study Question 3: What are the useful planning tools and techniques? Use of staff planners Coordinating the planning function for the total organization or one of its major components. Possible communication gaps between staff planners and line management.

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Study Question 4: How can plans be well implemented? Project management… Makes sure activities required to complete a project are planned well and accomplished on time and within budget Projects – one-time activities with many component tasks that must be completed in proper order and within budget

Study Question 4: How can plans be well implemented? Key issues and principles in the goal-setting process: Set specific goals (Clearly target key results). Set challenging goals (Stretch towards goal). Ensure goals are attainable (Challenging but realistic and possible to achieve). Goals must be timely (Goals with specific timetables and due dates). Make sure goals are measurable (Goals should be measureable without ambiguity).

Study Question 4: How can plans be well implemented? Goal-setting theory Participation in goal setting unlocks the motivational potential of goal setting. management by objectives (MBO) promotes participation. when participation is not possible, workers will respond positively if supervisory trust and support exist.

A sample hierarchy of objectives for quality management in a manufacturing firm

Study Question 4: How can plans be well implemented? Management by Objectives (MBO) A structured process of regular communication. Supervisor/team leader and workers jointly set performance objectives. Supervisor/team leader and workers jointly review results.

Study Question 4: How does management by objectives operate? MBO involves a formal agreement specifying … Workers’ performance objectives for a specific time period. Plans through which performance objectives will be accomplished. Standards for measuring accomplishment of performance objectives. Procedures for reviewing performance results.

Figure 7.3 Management by objectives as an integrated planning and control framework.

Study Question 4: How does management by objectives operate? The MBO process: Supervisor and workers jointly set objectives, establish standards, and choose actions. Workers act individually to perform tasks; supervisors act individually to provide necessary support. Supervisor and workers jointly review results, discuss implications, and renew the MBO cycle.

Study Question 4: How does management by objectives operate Types of MBO performance objectives Improvement Personal development Maintenance Criteria for effective performance objectives Specific Time defined Challenging Measurable

Study Question 4: How does management by objectives operate? Pitfalls to avoid in using MBO Tying MBO to pay. Focusing too much attention on easily quantifiable objectives. Requiring excessive paperwork. Having managers tell workers their objectives.

Study Question 4: How does management by objectives operate? Advantages of MBO Focuses workers on most important tasks and objectives. Focuses supervisor’s efforts on important areas of support. Contributes to relationship building. Gives workers a structured opportunity to participate in decision making.

Study Question 4: How can plans be well implemented? Participation and involvement Participatory planning requires that the planning process include people who will be affected by the plans and/or will help implement them. Benefits of participation and involvement: Promotes creativity in planning. Increases available information. Fosters understanding, acceptance, and commitment to the final plan.

How participation and involvement help build commitments to plans.