1. 15
Planning

2. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
Describe the importance of planning.
Discuss the merits of the different types of planning.
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3. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
Explain how goals are set and strategies are developed and give examples.
Identify the seven steps in operational planning.

4. What is Planning?
Planning involves selecting the various goals that the organization wants to achieve and the actions (objectives) that will ensure the organization accomplishes its goals.
In organizations, executives determine where the organization is and where it wants to go.
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5. What is Planning?
Goals are established for each of the key operating areas.
Key operating areas would include, but not be limited to, guest satisfaction, employee satisfaction, and productivity.
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6. What is Planning?
All managers do some form of planning, whether informal or formal.
Informal planning is often done at the last minute, and there is little or no sharing of goals and strategies with others in the organization.
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7. What is Planning?
All managers do some form of planning, whether informal or formal.
Formal planning occurs when specific goals covering a period of up to several years are identified and shared with all associates, and strategies are developed stating how each goal will be reached.
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8. What is Planning?
Planning can also help identify potential opportunities and threats.
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9. What is Planning?
Planning helps facilitate the other functions of management—organization, decision-making, communication, motivation, and especially control—because planning establishes what needs to be done and how it is to be done, and control looks at how well we have done compared to how well we expected to do.

10. The Purpose of Planning
Planning gives direction not only to top management but to all the associates as they focus on goal accomplishment.
The purpose of planning is to determine the best goals and strategies to achieve organizational goals.
Top executives do most of the strategic planning, and first-line managers do most of the operational planning.
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11. The Purpose of Planning
Planning provides the road map of where the organization is going.
Planning also helps coordinate the efforts of associates toward goal accomplishment.
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12. The Purpose of Planning
Planning assists in risk reduction by forcing managers to look ahead and anticipate change so they can plan scenarios to react to those potential changes.

13. Strategic Planning and Strategic Management
Strategic planning creates the long-range plans that steer an organization toward its goals in the accomplishment of its mission and vision.
The strategic planning process involves top management, who, in simple terms, identify where the organization is and where it wants to go.
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14. Strategic Planning and Strategic Management
There is a strong link between strategic planning and strategic management.
The planners figure out what to do and management implements the plan.
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15. Strategic Planning and Strategic Management
Strategic management develops the mission, goals, and strategies by identifying the business of the corporation today and the business it wants for the future, and then identifying the course of action it will pursue, given its strengths, weaknesses, opportunities, and threats (internal and external environments).
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16. Strategic Planning and Strategic Management
There are three main strategic management tasks: the development of a vision and a mission statement, translating the mission into strategic goals, and crafting a course of action to move the organization to where it wants to be.
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17. Strategic Planning and Strategic Management
A direct link exists between the mission of the organization and strategic management—they complement each other.
Strategic planning involves creating a long-term strategy for how the organization will meet its mission.
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18. Strategic Planning and Strategic Management
The job of strategic management is to translate the mission into strategic goals.
The difference between strategic planning and strategic management is that strategic planning is a systematic process whereby the top management of an organization charts the future course of the enterprise.
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19. Strategic Planning and Strategic Management
Strategic management is the process of guiding the organizational strategic plan, and acquiring the necessary resources and capabilities to ensure successful implementation of the plan in the context of emergent situations caused by the level of environmental turbulence.
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20. Strategic Planning and Strategic Management
There are six steps to strategic planning:
Create a vision.
Find out what your guest wants.
Do an environmental scan.
Identify critical issues.
Formulate strategies for the future.
Create your action plan and act on it, and then monitor results.

21. Strategic Planning/Management Process
Most of the strategic planning that takes place at the top management level is called corporate-level strategy.
It begins with identifying the organization’s mission, goals, and objectives.
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22. Strategic Planning/Management Process
It then goes on to analyze the environment and the organization’s resources and to identify strengths, weaknesses, opportunities, and threats.
The organization then formulates strategies, implements them, and evaluates the results.

23. Corporate-Level Strategies
There are three corporate strategies:
Growth: market penetration, geographic expansion, product development, and horizontal integration
Strategic alliances and joint ventures
Diversification
Corporations choose the number of areas of business in which they want to operate.
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24. Corporate-Level Strategies
Most companies want to grow, and they must plan a strategy for that growth.
There are four growth strategies: market penetration, geographic expansion, product development, and horizontal integration.
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25. Corporate-Level Strategies
Strategic alliances or joint ventures are methods for a corporation to fulfill its mission by joining forces with other similar corporations to meet a goal.

26. Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis
SWOT analysis is used to assess the company’s internal and external strengths and weaknesses, seek out opportunities, and be aware of and avoid threats.
It is conducted in comparison with a company’s main competitors.

27. Strengths, Weaknesses, Opportunities, and Threats Analysis
The eleven P’s of hospitality marketing include the traditional four P’s of marketing—place (or location), product, price, and promotion—but add three others (people, process, and physical evidence) and four new P’s (personalization, participation, peer-to-peer, and predictive modeling).
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28. Strengths, Weaknesses, Opportunities, and Threats Analysis
Strategic plans are implemented through action plans, operating plans, and standing plans.

29. Environmental Scanning and Forecasting
Environmental scanning is the screening of large amounts of information to anticipate and interpret changes in the environment.
Environmental scanning creates the basis for forecasts.
Forecasting is the prediction of future outcomes.
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30. Environmental Scanning and Forecasting
Information gained through scanning is used to form scenarios.
These establish premises for forecasts, which are a prediction of future outcomes.
The two main types of outcomes that managers seek to forecast are future revenues and new technology breakthroughs.

31. Operational Planning
Planning is the first of the management functions, so it establishes the basis for the other functions.
Planning involves two main parts: goals and strategies.
Operational plans are generally created for periods of up to one year and fit in with the strategic plan.
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32. Operational Planning
Most hotel, restaurant, and other hospitality managers plan for periods from hourly, daily, weekly, monthly, and up to 90 days.
Operational plans provide managers with a step-by-step approach to accomplish goals.
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33. Operational Planning
The overall purpose of planning is to have the entire organization moving harmoniously toward the goals.
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34. Operational Planning There are seven steps in operational planning:
Setting goals. Goals should be specific, measurable, and achievable.
Analyzing and evaluating the environment. This involves analyzing political, economic, social, and other trends that may affect the operation.
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35. Operational Planning There are seven steps in operational planning:
Determining alternatives. This involves developing courses of action, sometimes requesting the input from employees.
Evaluating alternatives. This calls for making a list of advantages and disadvantages, considering resources and effects on the organization.
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36. Operational Planning There are seven steps in operational planning:
Selecting the best solution. This results from the analysis of various alternatives and sometimes combining two or more alternatives.
Implementing the plan. This includes decisions on people, dates, resources, benefits, costs, reporting, and authority to be granted.
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37. Operational Planning There are seven steps in operational planning:
Controlling and evaluating results. This involves monitoring progress toward goals.

38. Operational Goal Setting
Goal setting is the process of determining outcomes for each area and associate.
No one can work effectively without specific goals and monthly evaluation reports to gauge whether the effort is moving toward goal accomplishment, or whether adjustments must be made to change course.
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39. Operational Goal Setting
Examples of goals and information for a sales department include:
Group room nights (booked this month and year-to-date by market segment and salesperson, actual consumer room nights, actual average group room rates).
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40. Operational Goal Setting
Examples of goals and information for a sales department include:
Individual room nights (actual room nights booked, local corporate clients, occupancy compared to same time last year, rev par, and packages sold).
Another example of goals is productivity goals that measure the amount of labor required to do a task.
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41. Operational Goal Setting
Productivity is measured in labor costs, which are expressed as a percentage of sales, for each department.

42. Operational Objectives
Objectives state how a goal will be met.
Objectives are operational statements of activities that should be quantifiable and attainable within a stated time.

43. Management Concepts and Approaches
Management by objectives (MBO) is a managerial process that determines the goals of the organization and then plans the objectives—that is, the how-tos of reaching the goals.
With MBO, associates usually establish the goals and objectives and review them with management.
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44. Management Concepts and Approaches
MBO works because associates have been involved with setting goals and objectives and are likely to be motivated to see them successfully achieved.
MBO goals need to be specific, measurable, and challenging, but attainable.
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45. Management Concepts and Approaches
The main purpose of an MBO program is to integrate the goals of the organization and the goals of the associates so that they are in focus.
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46. Management Concepts and Approaches
Total Quality Management (TQM) not only involves planning but also touches on the other functions of management—the idea of improving efficiency and increasing productivity while placing a larger emphasis on quality.
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47. Management Concepts and Approaches
An example of TQM in the restaurant industry is asking servers in a restaurant for help solving the challenge of reducing the guests’ waiting time for a table by turning tables more quickly during rush periods.
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48. Management Concepts and Approaches
Implementing TQM will have the natural outcome of teamwork because one employee cannot improve quality on his/her own.
Benchmarking identifies the best way of doing something and which companies excel in that area (best practices companies).
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49. Management Concepts and Approaches
The best practice is noted and emulated or improved on by other companies.
Successful companies sometimes swap information.
Benchmarking is an operational tool that can be used to guide corporate strategy as well as operations strategies.

50. Policies, Procedures, and Rules
Policies, procedures, and rules are examples of standing plans.
Policies set broad guidelines for associates to use when making decisions.
Procedures specify what to do in given situations.
A rule is a very specific action guide that must be followed.

51. Budgeting A budget is a plan allocating money to specific activities.
There are budgets for revenues (sales) and costs (expenses) for capital equipment—equipment that has an expected life of several years.
Budgets are popular because they force managers to anticipate expected sales and budget expenses accordingly.
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52. Budgeting
Budgets are planning techniques that force managers to be fiscally responsible.
Budgets are created by department heads once a year and revised monthly or as needed.
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53. Budgeting Budgets intertwine with
Scheduling, because scheduling equals labor costs, the largest controllable budget item;
Purchasing, because that contributes to food, beverage, and other costs; and
Controlling, because we want to compare budget to actual revenue and expenditure results.

54. Scheduling and Project Management
Scheduling associates is a planning activity that involves taking the business forecast and allocating an appropriate number of staff to provide the necessary level of service.
Project management is the task of getting the project completed on time and within budget.
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55. Scheduling and Project Management
Hospitality companies are using project management because the approach fits well with the need for flexibility and rapid response to market opportunities.
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56. Scheduling and Project Management
There are five steps:
Goals need to be defined.
Activities and resources must be identified.
Sequence of completion is determined using flowchart-type diagrams such as a Gantt chart or a Program Evaluation and Review Technique (PERT) network.
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57. Scheduling and Project Management
There are five steps:
Activities are scheduled.
Tasks and budgetary responsibilities are assigned.

58. Sustainable Planning
Planning for sustainable tourism requires identifying opportunities in a particular area and balancing them with possible limitations placed on tourism development, in order to capitalize on the strengths and diminish the negative effects that can befall the environment.
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59. Sustainable Planning
At the heart of sustainable planning is a focus on protecting the community and its environment from being misused.
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60. Sustainable Planning
Sustainable planning should be initiated with certain intentions in mind, such as using resources responsibly with an environmentally conscious approach, maintaining respect for local heritage and different cultures living in the community, improving the quality of life in the community, and encouraging the preservation of the various ways of life.

61. Trends in Planning
Some of the current trends are; a focus on international visitor planning, planning social media, social media marketing, a continuous job search culture, diversity planning, strengthening stakeholder confidence, re-evaluating existing business models, a strong customer focus, strengthening management talent, planning beyond the traditional event venue, budget spending, and a focus on going viral in the age of the environment.