1. Planning Basics

2. Overview What planning is Planning in uncertain environments
Types of plans
Management by objectives
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3. Quick Write
You read all the time about “change” in the business world—including in this book. Do you think it makes sense for businesses to do formal planning in an environment of constant change?
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4. What Planning Is
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5. What Is Planning?
Planning is defining goals and deciding on a strategy to meet them
Planning involves
ends—what is to be done
means—how it is to be done
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6. Planning in Uncertain Environments
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7. Why Managers Should Make Formal Plans
Gives Direction
Reduces the Impact of Change
Helps Eliminate Waste and Redundancy
Sets Standards and Objectives
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8. Criticisms of Formal Planning
May create rigidity and inflexibility
Chaotic business environment makes planning useless due to changes
Plans cannot replace intuition and creativity
Focuses attention on today’s competition, not tomorrow’s survival
Reinforces success, which may lead to failure because you end up stuck in your ‘successful’ ways when you need to explore new options
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9. Research Findings on Planning Effectiveness
Formal planning generally means higher profits, higher return on assets, and other good marks on a corporation’s financial report card
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10. Research Findings on Planning Effectiveness
How good the planning is matters more than how much of it there is
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11. Research Findings on Planning Effectiveness
Where formal planning doesn’t lead to higher profits, something outside the company is often to blame
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12. Role Play (Exercise)
Your sales team has been given the goal of improving iPod sales to high school students.
As a manager, explain to the team the benefit of planning together.
As team members, what kind of objections will you raise?
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13. Types of Plans Plan Time Frame Specificity Frequency Of Use Strategic
Long Term
Directional
Single Use
Tactical
Short Term
Specific
Standing
Adapted from Fundamentals of Management, 5th Ed. By Robbins/DeCenzo, p. 92
Pearson Prentice Hall, 2005
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14. Strategic and Tactical Plans
Strategic plans are plans that establish an organization’s overall objectives, and position it in term of its environment
Tactical plans are plans that specify the details of how an organization’s overall objectives will be achieved and are sometimes called operational plans
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15. Short-Term and Long-Term Plans
Short-term plans are plans that cover less than one year
Long-term plans are plans that extend beyond five years
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16. Specific and Directional Plans
Specific plans are plans that have clearly defined objectives and leave no room for misinterpretation
Directional plans are flexible plans that set out general guidelines
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17. Single-Use and Standing Plans
A single-use plan is a plan used to meet the needs of a particular or unique situation, such as a corporate acquisition
A standing plan, on the other hand, is a plan that is ongoing and provides guidance for repeatedly performed actions in an organization
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18. Management by Objectives
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19. What is MBO?
Management by objectives (MBO) is 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
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20. Cascading Objectives Overall Organizational 0bjectives Divisional
Departmental
objectives
Individual
Adapted from Fundamentals of Management, 5th Ed. By Robbins/DeCenzo, p. 95
Pearson Prentice Hall, 2005
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21. Locke on Goal-Setting
Setting specific employee goals increases performance
Difficult goals get even higher levels of performance from employees—as long as the employees accept the goals
Employees do better when they receive performance than when they don’t
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22. Common Elements in an MBO Program
Goals are specific
Many people have a voice in decisions
Goals have an explicit time period
Individuals receive feedback on their performance in meeting their goals
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23. Setting Employee Objectives
Identify key tasks
Establish specific and challenging goals for each key task
Allow the employee to take part in the goal-setting
Set priorities
Build in ways to measure success
Link rewards to goals
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24. Role Play (Exercise)
Your team is about to engage in a community support project to provide household and lawn care for senior citizens in the community.
As the leader of the project team, conduct a meeting with one of your subordinates to develop a set of objectives prior to working on this project.
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25. Downside of Setting Objectives
People may focus on quantity of output, not quality
Setting individual goals for employees may undercut teamwork
Employees may tend to reach the goal, then relax and miss the opportunity for continuous improvement
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26. Review
Planning is defining goals and deciding on a strategy to meet them
Planning involves ends—what is to be done—as well as means: how it is to be done
Managers benefit from formal plans because they give direction, reduce the impact of change, help eliminate waste and redundancy, and set standards or objectives
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27. Review
Too much planning can be bad because it may create rigidity, the environment is so chaotic that no one can plan meaningfully, planning cannot replace intuition or creativity, it focuses attention on today’s competition, not tomorrow’s survival, and it reinforces success in a way that may lead to failure because we become stuck in our ways when we need to change
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28. Review Generally speaking, planning improves performance
There are four popular ways to describe different types of plans – strategic and tactical plans; short-term and long-term plans; specific plans and directional plans and single-use and standing plans
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29. Review
Management by objectives (MBO) is 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
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30. Review
Edwin Locke’s research on goal-setting showed that setting specific employee goals increases performance, setting difficult goals results in even higher levels of performance – as long as the employees accept the goals, and that employees do better when they receive performance feedback than when they do not
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31. Review
W. Edwards Deming thought setting objectives did more harm than good because employees may focus on quantity of output, not quality, setting individual goals for employees may undercut teamwork, and when employees reach their goal, they may then relax and miss the opportunity for continuous improvement
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32. Summary What planning is Planning in uncertain environments
Types of plans
Management by objectives
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33. What’s Next… Establishing Goals and Developing Plans
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