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Chapter7FoundationsofPlanningFailtoPlan,
PlantoFailContentsTheWhatandWhyofPlanning?GoalsandPlansSettingGoalsandDevelopingPlansWhatIsPlanning?PlanningAprimarymanagerialactivitythatinvolves:Definingtheorganization’sgoalsEstablishinganoverallstrategyforachievingthosegoalsDevelopingplanstointegrateandcoordinateworkactivities.TypesofplanningInformal:notwrittendown,short-termfocus;specifictoanorganizationalunit.Formal:written,specific,andlong-termfocus,involvessharedgoalsfortheorganization.WhyDoManagersPlan?PurposesofPlanningProvidesdirectionReducesuncertaintyBenjaminFranklinCertainty?Inthisworldnothingiscertainbutdeathandtaxes.
MinimizeswasteandredundancySetsthestandardsforcontrollingPlanningandPerformanceTheRelationshipBetweenPlanningAndPerformanceFormalplanningisassociatedwith:Higherprofitsandreturnsofassets.Positivefinancialresults.Thequalityofplanningprocessandimplementationaffectsperformancemorethantheextentofplanning.Theexternalenvironmentcanreducetheimpactofplanningonperformance,Theplanning/performancerelationshipisinfluencedbytheplanningtimeframe.ContentsTheWhatandWhyofPlanning?GoalsandPlansSettingGoalsandDevelopingPlansHowDoManagersPlan?ElementsofPlanningGoals(alsoObjectives)DesiredoutcomesortargetsProvidedirectionandevaluationperformancecriteriaPlansDocumentsthatoutlinehowgoalsaregoingtobemet.DescribehowresourcesaretobeallocatedandestablishactivityschedulesAliceinWonderlandquotesAlice——Wouldyoutellme,please,whichwayIoughttogofromhere?Cat——Thatdependsagooddealonwhereyouwanttogetto.Alice——Idon’tmuchcarewhere.Cat——Thenitdoesn’tmatterwhichwayyougo.TypesofGoalsFinancialGoalsArerelatedtothefinancialperformanceoftheorganization.StrategicGoalsArerelatedtoallotherareasofanorganization’sperformance.TypesofGoals(Cont.)StatedGoalsversusRealGoalsStatedgoalsareofficialstatementsofwhatanorganizationsays——andwhatitwantsitsvariousstakeholderstobelieve——itsgoalsare.Realgoalsarethosethatanorganizationactuallypursues,asdefinedbytheactionsofitsmembers.Statedgoalsmaybeirrelevanttoitsrealgoals.TypesofPlansTypesofPlans(Cont.)StrategicPlansPlansthatapplytotheentireorganizationandestablishtheorganization’soverallgoals.OperationalPlansPlansthatencompassaparticularoperationalareaofanorganization.Long-TermPlansPlanswithatimeframebeyondthreeyears.Short-TermPlansPlanscoveringoneyearorless.TypesofPlans(cont’d)SpecificPlansPlansthatareclearlydefinedandthatleavenoroomforinterpretationDirectionalPlansPlansthatareflexibleandthatsetoutgeneralguidelines.SpecificVersusDirectionalPlansTypesofPlans(cont’d)Single-UsePlanAone-timeplanspecificallydesignedtomeettheneedofauniquesituation.StandingPlansOngoingplansthatprovideguidanceforactivitiesperformedrepeatedly.ContentsTheWhatandWhyofPlanning?GoalsandPlansSettingGoalsandDevelopingPlansApproachestoEstablishingGoalsTraditionalGoalSettingAnapproachtosettinggoalsinwhichtopmanagerssetgoalsthatflowdownthroughtheorganizationandbecomesubgoalsforeachorganizationalarea.TraditionalObjectiveSettingApproachestoEstablishingGoals(cont’d)MaintainingtheHierarchyofGoalsMeans–EndsChainAnintegratednetworkofgoalsinwhichtheaccomplishmentofgoalsatonelevelservesasthemeansforachievingthegoals,orends,atthenextlevel.ApproachestoEstablishingGoals(cont’d)ManagementByObjectives(MBO)Aprocessofsettingmutuallyagreedupongoalsandusingthosegoalstoevaluateemployeeperformance.StepsinaTypicalMBOProgramTheorganization’soverallobjectivesandstrategiesareformulated.Majorobjectivesareallocatedamongdivisionalanddepartmentalunits.Unitmanagerscollaborativelysetspecificobjectivesfortheirunitswiththeirmanagers.Specificobjectivesarecollaborativelysetwithalldepartmentmembers.Actionplans,defininghowobjectivesaretobeachieved,arespecifiedandagreeduponbymanagersandemployees.Theactionplansareimplemented.Progresstowardobjectivesisperiodicallyreviewed,andfeedbackisprovided.Successfulachievementofobjectivesisreinforcedbyperformance-basedrewards.CharacteristicsofWell-DesignedGoalsWrittenintermsofoutcomes,notactionsFocusesontheends,notthemeans.MeasurableandquantifiableSpecificallydefineshowtheoutcomeistobemeasuredandhowmuchisexpected.ClearastotimeframeHowlongbeforemeasuringaccomplishment.ChallengingyetattainableLowgoalsdonotmotivate.Highgoalsmotivateiftheycanbeachieved.WrittendownFocuses,defines,andmakesgoalvisible.CommunicatedtoallPutseverybody“onthesamepage.”StepsinGoalSettingReviewtheorganization’smissionstatement.Dogoalsreflectthemission?Mission;Astatementofthepurposeofanorganization.Evaluateavailableresources.Areresourcessufficienttoaccomplishthemission?Determinegoalsindividuallyorwithothers.Aregoalsspecific,measurable,andtimely?Writedownthegoalsandcommunicatethem.Iseverybodyonthesamepage?Reviewresultsandwhethergoalsarebeingmet.Whatchangesareneededinmission,resources,orgoals?MissionStatementsCompanyAT&TMissionStatementWearededicatedtobeingtheworld’sbestatbringingpeopletogether--givingthemeasyaccesstoeachotherandtotheinformationandservicestheywantandneed--anytime,anywhere.DevelopingPlansContingencyFactorsinAManager’sPlanningManager’slevelintheorganizationStrategicplansathigherlevelsOperationalplansatlowerlevelsPlanningintheHierarchyofOrganizationsDevelopingPlansContingencyFactorsinAManager’sPlanning(Cont.)DegreeofenvironmentaluncertaintyStableenvironment:specificplansDynamicenvironment:specificbutflexibleplansLengthoffuturecommitmentsCurrentplansaffectingfuturecommitmentsmustbesufficientlylong-termtomeetthecommitments.ApproachestoPlanningEstablishingaformalplanningdepartmentAgroupofplanningspecialistswhohelpmanagerswriteorganizationalplans.Planningisafunctionofmanagement;itshouldneverbecomethesoleresponsibilityofplanners.InvolvingorganizationalmembersintheprocessPlansaredevelopedbymembersoforganizationalunitsatvariouslevelsandthencoordinatedwithotherunitsacrosstheorganizati
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