Define the nature and purpose of planning Classify the types of goals organizations might have and the plans they use Compare and contrast approaches to goal-setting and planning Discuss contemporary issues in planning

What Is Planning? Planning - a primary managerial activity that involves: Defining the organization’s goals Establishing an overall strategy for achieving those goals Developing roadmap for organizational work activities

Why Do Managers Plan? Purposes of Planning Provides direction Reduces uncertainty Minimizes waste and redundancy Sets the standards for controlling

Elements of Planning Involves 2 important aspects Goals/Objectives Desired outcomes for individuals, groups, or entire organizations Plans Documents that outline how goals are to be accomplished Describe how resources are to be allocated and establish activity schedules

Types of Goals Stated Goals -official statements of what an organization says, and what it wants its stakeholders to believe, its goals are. Real Goals - those goals an organization actually pursuues.

Types of Plans

Types of Plans Strategic Plans: applies to the entire organization. (Broad) Operational Plans: encompasses a particular operational area of the organization. (Narrow)

Types of Plans Long-Term Plans Short-Term Plans Time frames extending beyond three years. Short-Term Plans Time frames of one year or less.

Types of Plans Specific Plans: Plans that are clearly defined and leave no room for interpretation. (increase sales my 5% in the next 6 months) Directional Plans: Flexible plans that set out general guidelines and provide focus, yet allow discretion in implementation.(employ great artists)

Types of Plans Single-Use Plan: A one-time plan specifically designed to meet the need of a unique situation. (increase number of Walmart stores in China) Standing Plans: Ongoing plans that provide guidance for activities performed repeatedly.(HR policies)

Management By Objectives (MBO) Instead of using traditional goal setting, many organizations use management by objectives (MBO). It is a process of setting mutually agreed-upon goals and using those goals to evaluate performance. Progress toward accomplishing goals is periodically reviewed. Rewards are allocated on the basis of progress towards the goals.

Management By Objectives (MBO) MBO has 4 key elements: goal specificity participative decision making an explicit performance/evaluation period feedback

Characteristics of well-written Goals Written in terms of outcomes rather than actions Measurable and quantifiable Clear, within a timeframe Challenging yet attainable Written Communicated to all necessary organization members.

Developing Plans There are 3 contingency factors needed to be considered while developing plans 1. Manager’s level in the organization Strategic plans at higher levels Operational plans at lower levels 2. Degree of environmental uncertainty Stable environment: specific plans Dynamic environment: specific but flexible plans

Contingency Factors in Planning 3. Length of future commitments -Commitment Concept: plans should extend far enough to meet those commitments made when the plans were developed. Planning for too long or too short a time period is inefficient and ineffective. (AT&T and Iphone)

Planning in Dynamic Environments Develop plans that are specific but flexible. Understand that planning is an ongoing process. Change plans when conditions warrant alterations.

Planning in Dynamic Environments Persistence in planning eventually pays off. Flatten the organizational hierarchy to foster the development of planning skills at all organizational levels.