1. Planning and Scheduling
Session
Planning and Scheduling

2. Session Outline Planning Process Forecasting Scheduling Charting
Project Planning

3. This Session Weekly Activity: Management ebooks
It is important to have texts you can refer to throughout the semester.
Go to:
Management ebook – Principles of Management
Free Management ebooks
Download those resources relevant to management topics to be covered in class.

4. Establishes coordinated effort Reduces wasteful activity
The purpose of planning
This CTR introduces the chapter and relates to the material on pp It’s important to remind students that planning is not a one-shot activity. Effective planning is an on-going process of constantly adjusting to changing conditions even while trying to anticipate them.
The purpose of planning
Establishes coordinated effort
Planning defined
Planning is the on-going process of defining the organisation’s objectives and goals, establishing an overall strategy for achieving those goals, and developing, implementing, and controlling a comprehensive hierarchy of integrated and coordinated activities that will meet those goals within a specified period of time and at a pre-determined level of performance.
Reasons for planning
Planning establishes coordinated effort. Plans give direction to all members of the organisation and defines what and how each member contributes to the overall objective.
Planning anticipates change. More than ever, competitive organisations don’t ask if they will need to change, they must foresee how to survive.
Planning reduces overlapping and wasteful activities. In establishing clear relationships between means and ends, plans make inefficiencies obvious.
Planning facilitates control. Objectives and standards provide clear measures for evaluating performance and diagnosing problems.
Planning improves performance. Studies indicate that organisations that engage in formal planning outperform those that don’t. First, plans lead to higher profits. Second, the quality and the implementation of plans is more important than the amount of planning. Third, when well planned organisations fail, it is usually due to environmental obstacles.
Myths about planning Common myths about planning include:
1. Planning that proves inaccurate is a waste of time. The results is but one purpose. The process has heuristic value. 2. Planning can eliminate change. Change is inevitable. Planning helps anticipate it. 3. Planning reduces flexibility. Planning is on-going and constantly adjusting to conditions.
Anticipates change
Reduces wasteful activity
Facilitates control
Improves performance

5. Activity: Planning
List those tasks you already undertake when planning. Start by thinking of those simple tasks, such as making a shopping list, post-it reminder notes, using a diary to plan your week, holiday or major purchase.
What similar ideas and skills do you see being used within your workplace?
Time: minutes

6. Misconceptions about planning
Planning that
proves inaccurate
is a waste of time
Planning
reduces
flexibility
There are many misconceptions people hold about planning:
1. The first is that planning that proves to be inaccurate is a waste of time. The value of planning should not just be measured in terms of outcome. The end result is only one of the purposes of planning. The process of planning is important because it forces managers to think about what it wants to achieve and how to achieve it. Organisations which do a good job at planning have direction and purpose and this can be the case even when objectives miss their target.
2. The second misconception is that planning can eliminate change. Planning does not eliminate change. Change will occur regardless of whether planning is done or not. What planning does is to allow managers to anticipate changes and to develop the most appropriate strategies to cope with these changes.
3. The third misconception is that planning reduces flexibility. Planning should be an ongoing process and does not stop once formal plans have been implemented. Formal plans which have been articulated and well reasoned out are easier to revise than vague ideas in someone's head.
Planning can
eliminate change

7. GOALS v/s PLANS RELATIONSHIP
Operational
Goals
Plans
Tactical
Strategic
Top Management:
Organisation-wide
perspective
Middle Management:
Department
perspective
Ref p
Organisational goals form an important element in the planning process, and research on the potential usefulness of goals has shown their importance in enhancing organisational efficiency and effectiveness.
Without goals, organisation members may work very hard but collectively achieve little.
The goals thus clarified expectations, helped increase motivation, provided standards to gauge performance, and led to significant performance increases.
Different levels of management use different forms of goals and planning depending of their level.
Strategic - Address issues related to the whole organisation.
Tactical - Various departments must do to achieve outlined results.
Operations - Lower level management - dealing with day to day issues.
First Level
Management:
Unit/Individual
perspective

8. Topic Example Video
The following video explains about the importance of SMART Goal setting in business.
Take note of the key points.

9. Six Steps to Planning 1. Establish a realistic goal and targets
2. List all the things that need to happen
3. Sequence them
4. Communicate your plan
5. Implement your plan
6. Check your progress

10. Types of Plans Short term plans Long term plans Business plans
Operational plans
Specific plans
Project plans
Standing plans
Protective plans

11. Topic Example Video
The following video explains about the different types of plans.
Take note of the key points.

12. Category: Specificity
Types of plans
This CTR relates to the material on pp and Table 7-1 on p Common categorisations for plans are by breadth (strategic/operational), time frame (short-term/long-term) and specificity (specific/directional).
Types of plans
Category: Breadth
Strategic
Operational
Strategic versus operational plans
Strategic plans. These are plans that are organisation-wide, establish overall objectives, and position an organisation in terms of its environment.
Operational plans. These plans specify details on how overall objectives are to be achieved.
Short-term versus long-term plans
Short-term plans cover less than one year.
Long-term plans extend beyond five years.
Specific versus directional
Specific plans. These plans are clearly defined and leave no room for interpretation.
Directional plans. These are flexible plans that set out general guidelines to focus managerial discretion.
Discussion note: The primary reason why planning is so difficult is because planning is very time consuming and a manager’s time is limited. Ask students to identify specific activities of planning that are hard to master. Why do most managers not learn to plan well? What should be done about it? What can students do to become better planners?
Category: Time frame
Short-term
Long-term
Category: Specificity
Specific
Directional

13. Plans According To Use Single-Use Plans Aim at achieving a
PROGRAM
Single-Use Plans
Aim at achieving a
specific, non-recurring
goal
PROJECT
Management a Pac Rim Focus p
Single Use Plans: Aimed at a specific goal;
Programs; A comprehensive plan coordinating complex activities.
Involves several different departments or units.
Involves six steps;
1 Divide what is to be done into parts.
2 Determine relationships among parts, develop a sequence.
3 Decide who will take responsibility.
4 Determine how each will be completed.
5 Estimate time required for completion of unit
6 Develop a schedule for implementing each step
Project; A plan with a set of limited-scope activities to reach a major non recurring goal, not needing division, with it’s own budget.
It may also be a separate, self contained set of activities toward one goal 6 6 6

14. Plans According To Use Standing Plans Providing ongoing
POLICIES
PROCEDURES
RULES
Standing Plans
Providing ongoing
guidance for recurring
activities
Management Pacific Rim Focus p 189
Standing Plans;
Provides guidance for performing recurring activities; policies, procedures, and rules.
Policy;
A guide to specify broad parameters within which members of an organisation are expected to operate in the pursuit of goals.
A Procedure;
A series of related steps for certain recurring circumstances.
A Rule;
A specific statement spelling out specific actions to be or not to be taken in a situation. What must or must not be done.

15. Environmental uncertainty
Contingency factors in planning
This CTR relates to the material on pp and Figure 7-2 on p The following CTR continues this discussion and corresponds to Figure 7-3 on p. 253.
Contingency factors in planning
Strategic planning
Organisation level
Contingency factors in planning
The four contingency factors that affect planning are:
1. Level in the organisation.
2. Life cycle of the organisation.
3. The degree of environmental uncertainty.
4. The length of future commitments.
This CTR presents the first contingency factor, with the other three covered on the following CTR.
Level In the organisation
The figure on the CTR illustrates the general relationship between managerial level and the type of planning the managers does. Typically, operational planning dominates the planning activities of lower level managers. Top manager predominately engage in strategic planning.
Discussion note: The text observes that the small business owner must engage in both types of planning. As more and more jobs are being created in small businesses, ask students to elaborate on this observation. What are the special problems in planning facing the small business owner? If managers at large companies don’t have time to plan, when does the small business owner get the time? Consider interjecting the role of software computer technology as an aid to small business planners. For reference, you may wish to view the promotional video, “In Their Own Words: Small Business Owners Discuss Their Software Solutions,” Microsoft/Entrepreneur Magazine, 1993.
Top
managers
Life cycle
Environmental uncertainty
Middle-level
managers
Future commitments
First-level
managers
Operational planning

16. Activity: Planning Process
In the planning process, you need to set yourself objectives or goals. Objectives form part of an organization’s focus and ideals.
List down with examples, some of these objectives that applies to your workplace.
How does your workplace formulate it’s plans.
Taking these objectives, what information does your workplace gather in order to achieve these objectives?
Time: minutes

17. Forecasting Forecasts are predictions of likely or intended outcomes
Decisions affected by culture
This CTR corresponds with Table 3-2 on p. 99 and the discussion on pp Culture is often a fascinating topic for students as they realise the extent of influence it has over individual and organisational behaviour. You may wish to ask students if any of them can provide examples of different decisions they have made since joining the organisation of the university or ‘business major’.
Forecasting
Forecasts are predictions of likely or intended outcomes
Revenue
Sources of culture
The text notes the importance of the founder of the organisation on the formation of organisational culture. Cultures also differ in their relative strength. Strong cultures are supported by employees who intensely hold key organisation values which are also widely shared. Weak cultures provide little direction for decision making. However, strong cultures can also hurt an organisation’s ability to respond to changing environmental and/or competitive forces. A key aspect of building an adaptive organisational culture is to include mechanisms for innovation and change as necessary into the core values of a strong culture.
Managerial decisions
Planning - culture affects the degree of risk that plans contain, whether plans are developed by teams or individuals, and the amount of environmental scanning used by managers.
Organising - culture determines how much autonomy is designed into employees jobs, whether task responsibility is assigned to individuals or groups, and the degree to which managers interact with one another.
Leading - culture influences the degree to which managers are concerned with employee job satisfaction, what leadership styles are appropriate, and the extent to which conflict is allowed and how it will be resolved. For example, some cultures encourage open conflict while others seek total consensus and eliminate even constructive criticism.
Controlling - culture affects whether employees control their own actions or have external controls imposed on them. It also determines what criteria will be used or emphasised in performance evaluations and the repercussions that will follow from exceeding budgets.
Technology
Quantitative
Qualitative

18. Forecasting Effectiveness
Use simple
techniques
Shorten length
of forecasts
Compare with
‘no change’
Despite its importance to strategic planning, many managers have mixed success in forecasting events and outcomes accurately.
Forecasting techniques are most accurate when the environment is static.
The more dynamic the environment the more likely management is to develop inaccurate forecasts.
Although there can be some difficulties associated with forecasting, there are some suggestions for improving forecasting effectiveness:
1. Use simple forecasting techniques - these can often be just as successful as more complex methods.
2. Compare every forecast with ‘no change’. A no-change forecast is accurate approximately half the time.
3. Don’t rely on one model alone. Make forecasts using different models and then average them out, particularly when making longer-range forecasts.
4. Don’t assume you can accurately identify turning points in a trend. A significant turning point may turn out to be an unusual random event.
5. Accuracy declines with expanding time frames. By shortening the length of forecasts you improve their accuracy.
Don’t assume
trends
Use multiple
methods

19. Forecasting Types Techniques Revenue Quantitative Technology
Qualitative
Revenue
Technology
Types
Techniques
The two most popular outcomes of forecasting for managers is for forecasting future revenues and new technological breakthroughs.
Revenue forecasting - predicting future revenues, is a critical element of planning both for-profit and not-for-profit organisations. It is typically obtained from historical revenue figures and then adjustments are made to this on the basis of environmental scanning.
Technological forecasting is predicting changes in technology and when new technologies are likely to be economically feasible. Almost all organizations are affected in some way by emerging technology and it is rapidly becoming an important issue for many organisations.
The techniques organisations can use fall into one of 2 categories: quantitative and qualitative.
Quantitative forecasting applies a set of mathematical rules to a series of past data to predict future outcomes.
Qualitative forecasting uses the judgement and opinions of knowledgeable individuals to predict future outcomes.

20. Quantitative Forecasting
Relies on numerical data and mathematical models to predict future events.
·       time series (historical cycles)
·       explanatory (causal) models
(past conditions)
·       regression models (variable equations)
·       econometric models
(economy interrelationships)
·       leading indicators (phenomenon correlation)

21. Topic Example Video
The following video explains what is a time series forecast.
Take note of the key points.

22. Qualitative Forecasting
Aims at predicting technological trends and other important environmental factors.
Delphi method
expert’s judgments
La Prospective
possible alternative futures
Scenarios
outlining possible future conditions
Judgmental
experienced opinions

23. Forecasting Method Criteria
Time horizons
Time required
Development costs
Accuracy in identifying trends
Accuracy in predicting turning points
Ease of understanding

24. Budgets Revenue Expense Profit Cash Capital expenditure Variable Fixed
This CTR relates to the material on pp ‘Types of budgets’ and ‘Approaches to budgeting’ represent different techniques and different perspectives on the budgeting process.
Budgets
Revenue
Expense
Profit
Types of budgets
A budget is a numerical plan for allocating resources to specific activities. Types of budgets typically used by managers include:
Revenue budgets The revenue budget is a specific type of revenue forecast. It is a budget that projects future sales.
Expense budgets The expense budget lists the primary activities undertaken by a unit and allocates a dollar amount to each.
Profit Budgets The profit budget is used by separate units in an organisation that combines revenue and expense budgets to determine the unit’s profit contribution.
Cash budgets The cash budget forecasts how much cash the organisation will have on hand and how much it will need to meet expenses.
Capital expenditure budgets The capital expenditure budget forecasts investments in property, building, and major equipment.
Variable budgets Variable budgets take into account those costs that vary with volume.
Approaches to budgeting
Incremental budgets Incremental budgets allocate funds to departments according to allocations in the previous period.
Zero-base budgets Zero-base budgets start from scratch and assume nothing about previous expenditures or needs. Under this approach, managers must justify each propose allocation. The process consists of three steps: 1. Each discrete activity is broken down into a decision package; 2. The decision packages are ranked hierarchically according to the benefit to the organisation; and, 3. Budget resources are allocated in the individual packages by preferential rank.
Cash
Capital expenditure
Variable
Fixed
Incremental
Zero-base

25. Topic Example Video
The following video explains about sales budgets in organisations and what is involved in calculating one.
Take note of the key points.

26. Operational Planning Tools
Scheduling
Break-even analysis
Linear programming
Operational
Planning
Tools
Operational Planning Tools
Break-even analysis Break-even analysis is a technique for identifying the point at which total revenue is just sufficient to cover total costs. Break-even is useful in pointing out the relationship between revenues, costs, and profits.
Linear programming Linear programming is a mathematical technique that allows managers to allocate production resources most efficiently if a change in one variable is accompanied by an exactly proportional change in the other variable.
Queuing theory Queuing theory is a technique that balance the cost of having a waiting line against the cost of service to maintain that line.
Probability theory Probability theory involves the use of statistics to analyse past predictable patterns and to reduce the risk to future plans.
Marginal analysis Marginal analysis is a planning technique that assesses the incremental costs or revenues in a decision.
Simulation Typically computer-based, simulations model real-world phenomenon that contain one or more variables that can be manipulated in order to assess their impact.
Queuing Theory
Probability theory
Marginal analysis
Simulation

27. Activity: Selling Bagels in Japan
Video Questions:
How could global scanning been used by Jerry Shapiro?
What could scanning have shown him?
What other specific planning tools might Shapiro find necessary as he continues to do business globally?
What implications do you see for managers and how they plan from the advice Shapiro gives for going into international markets?

28. Charting Common techniques include: Gantt charts Load charts
This CTR relates to the material on pp and covers the charting methods that apply to scheduling.
Charting
Common techniques include:
Gantt charts
Load charts
Scheduling
Scheduling is the managerial function that involves the listing of necessary activities, their order of accomplishment, who is to do each, and the time needed (or available) to complete them. Useful charting techniques for scheduling include:
Gantt charts Developed by Fredrick Taylor protege Henry Gantt, Gantt charts are essentially bar graphs with time on the horizontal axis and activities to be scheduled on the vertical axis.
Load charts Modified Gantt charts that show whole departments or specific resources on the vertical axis. This allows managers to plan and control for capacity utilisation.
PERT network analysis PERT stands for The Program Evaluation and Review Technique and is used for scheduling complicated projects with large numbers of interdependent activities. There are three key terms used in PERT analysis. Events are the end points that represent the completion of major activities. Activities represent the time or resources required to progress from one event to another. The critical path is the longest or most time-consuming sequence of events and activities in a PERT network.
Developing a PERT network requires identifying, ranking, and estimating the completion of all key activities. Five basic steps in developing a PERT are:
1. Identify every significant activity.
2. Ascertain the order in which these events must be completed.
3. Diagram the flow of activities from start to finish.
4. Compute a time estimate for completing each activity.
5. Schedule the start and finish dates of each activity and the project.
PERT chart components
Events
Activities
Critical path
PERT chart steps
1. Identify
2. Order
3. Diagram
4. Time
5. Schedule

29. Topic Example Video
The following video explains what is a Gantt chart and it’s usefulness in business.
Take note of the key points.

30. Gantt Charts To prepare a Gantt chart: List all significant activities
Place in a logical sequential order
Add estimates of time
Plot activities horizontally by time
Adjust activity timing to eliminate or reduce “slack” time periods.

31. A Sample Gantt Chart Activity Month 1 2 4 3 Edit Manuscript
Design Sample Pages
Draw Artwork
Print Galley Proofs
Print Page Proofs
Design Cover
This CTR refers to Figure 9-1 on p It depicts a simplified Gantt chart that was developed by a production manager in a publishing house.
Time is expressed in months across the top of the chart. The major activities are listed down the left side. The dark shading represents actual progress against the projected time frame.
In this example the print page proofs are running behind schedule. At this point the manager may choose to take some corrective action or expect that the book will be published at least two weeks late if no corrective action is taken.
Actual Progress
Goals
Reporting Date

32. Activity Activity: Gantt Chart Software
Thinking about your project’s action plans (including timelines), it is important to convert these into a schedule so that you can implement the operational components of your project.
To assist you in developing your Gantt Chart, you can download or request a 60 day trial copy of Gantt Chart software.
Suitable software for developing your Gantt chart is Microsoft Project. Go to:
for details.
Alternatively try:

33. A Sample Load Chart Editors Month 1 2 3 4 5 6 Anne Lisa Kim Maurice
Dave
Penny
This load chart refers to Figure 9-2 on p. 323.
A load chart is a modified Gantt chart. Instead of listing activities on the vertical axis, load charts list either whole departments or specific resources. This allows managers to plan and control for capacity utilisation. In this CTR Maurice and Lisa are completely booked for the next 6 months. The other editors have some unassigned time so they might be able to accept one or more new projects.
Work scheduled

34. The Program Evaluation and Review Technique - PERT - was originally developed in the late 1950’s for coordinating the more than 3000 contractors and agencies working on the Polaris submarine weapon system.
PERT is a technique for scheduling complicated projects comprising many activities some of which are interdependent.
A PERT Network is a flow-chart-like diagram showing the sequence of activities needed to complete a project and the time or cost associated with that.
In constructing a PERT Network 4 things need to be considered: events, activities, slack time and critical path.
Events - End points that represent the completion of major activities in a PERT network.
Activities - The time or resources needed to progress from one event to another in a PERT network.
Slack time - Is the amount of time an individual activity can be delayed without delaying the whole project.
Critical Path -The longest sequence of activities in a PERT network.

35. Critical Path Planning
Critical path planning is undertaken after Gantt charts or PERT exercise.
Critical activities need to be selected from list of all activities.
“Critical” relates to those activities that directly affects the project coming in:
on time
within budget
to performance specifications.
Project dependency relationship refers to those activities which are dependent on the critical activity to finish before it can be commenced.

36. Breakeven Analysis $90,000 80,000 70,000 Profit 60,000 Area 50,000
40,000
30,000
20,000
10,000
Profit
Area
Total Revenue
Revenue/Cost ($)
Breakeven Point
Variable
Costs
Fixed
Total Costs
A manager may want to know the number of units that must be sold to achieve profit objectives or whether a current product should continue to be sold or dropped from the organisations product line. Break-even analysis is a widely used technique for helping managers to make profit projections.
This example is Figure 9-4 on p. 327 of your text.
Break even analysis is valuable to managers as it points out the relationship between revenues, costs and profits and identifies the point at which total revenue is just sufficient to cover total costs.
Loss
Area
Output (in thousands)

37. Topic Example Video
The following video explains how to undertake a break even analysis.
Take note of the key points.

38. Project planning process
Define objectives
Identify activities and resources
Establish sequences
Estimate time for activities
Schedule project completion
Compare to objectives
Determine resource requirements
In a typical project the work is done by a project team whose member are temporarily assigned to the project and who report to the project manager.
The planning process begins by clearly defining the projects objectives. Then all the activites in the project and the necessary resources need to be determined.
Once the activities have been identified their sequential relationship needs to be determined as some steps will need to be completed before other activities are begun.
Scheduling of activities then take place. These estimates are then used to determine the completion date.
Then the project schedule is compared with the objectives and any necessary adjustments made.
The project manager at this point may choose to assign more resources to enable the project to be completed on time.

39. Control Steps
1. Planning techniques - charting and critical path planning
2. Budget and review - cost estimates and budgets
3. Review schedule, costs and quality - checking variances
4. Progress inspections - minimise deviations

40. Criticisms of planning
May create rigidity
Can’t be developed for
a dynamic environment
Can’t replace intuition and creativity
Focuses on today’s competition and
not on tomorrow’s survival
Reinforces success, which may lead to
failure

41. Next Session
Task 1:
Undertake Chapter Review: Saylor.org – Principles of Management Ch. 6, pp
Task 2:
Undertake Chapter Multi-choice Question Quizz: Robbins – Management Ch. 7 (Planning)
Task 3:
Undertake Case Study – TNT
How does TNT deliver it’s business strategy?