1. PowerPoint Presentation to Accompany Management, 8/e John R. Schermerhorn, Jr. Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley & Sons, Inc. Chapter 8: Planning – Processes and Techniques

2. Management 8/e - Chapter 82 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.

3. Management 8/e - Chapter 83 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 premises regarding future conditions. Analyze and choose among action alternatives. Implement the plan and evaluate results.

4. Management 8/e - Chapter 84 Figure 8.1 The roles of planning and controlling in the management process.

5. Management 8/e - Chapter 85 Study Question 1: Why and how do managers plan?  Benefits of planning: Improves focus and flexibility. Improves action orientation. Improves coordination. Improves time management. Improves control.

6. Management 8/e - Chapter 86 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.

7. Management 8/e - Chapter 87 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

8. Management 8/e - Chapter 88 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.

9. Management 8/e - Chapter 89 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.

10. Management 8/e - Chapter 810 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.

11. Management 8/e - Chapter 811 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. Contingency plans contain trigger points.

12. Management 8/e - Chapter 812 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.

13. Management 8/e - Chapter 813 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.

14. Management 8/e - Chapter 814 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.

15. Management 8/e - Chapter 815 Study Question 3: What are the useful planning tools and techniques?  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.

16. Management 8/e - Chapter 816 Study Question 4: How does management by objectives operate?  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.

17. Management 8/e - Chapter 817 Figure 8.4 Management by objectives as an integrated planning and control framework.

18. Management 8/e - Chapter 818 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.

19. Management 8/e - Chapter 819 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.

20. Management 8/e - Chapter 820 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

21. Management 8/e - Chapter 821 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.