What Is Planning? According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur”.

What Is Planning? Planning Managerial function that involves: Defining the organization’s goals Establishing an overall strategy for achieving those goals Developing a comprehensive set of plans to integrate and coordinate organizational work Answer all W’s and one H. Types of planning Informal: not written down, short-term focus; specific to an organizational unit Formal: written, specific, and long-term focus, involves shared goals for the organization

PLANNING- THE PRIMARY MANAGEMENT FUNCTION Planning lays foundation for other functions of management. All the functions of management are performed within the framework of plans laid out. It serves as a guide for other management functions. Planning for Planning Planning for organizing Planning for Leading Planning for Controlling

Purposes of Planning Provides direction ( coherent Pic of Organization) Reduces uncertainty (Considering Future) Minimizes waste and reduces overlapping activities Sets the standards for controlling ( Budgeting)

Planning and Performance The Relationship Between Planning and Performance Formal planning is associated with: Higher profits Other positive financial results The quality of planning and implementation affects performance more than the extent of planning The external environment can reduce the impact of planning on performance Formal planning must be used for several years (4Years)before planning begins to affect performance

How Do Managers Plan? Elements of Planning Goals (also objectives) Desired outcomes for individuals, groups, or entire organizations Provide direction for all management decisions Represent the performance evaluation criteria against which actual work accomplishments can be measured. Plans Documents that outline how goals are going to be met Describe how resources are to be allocated and establish activity schedules

Types of goals All organizations have multiple objectives. No single measure can evaluate weather an organization is successful or not. Financial Goals Relate to financial performance Strategic Goals Relate to other areas of performance

Types of goals Stated goals Official statements of what an organization says, and what it wants its various stakeholders to believe, its goals are. Real goals Goals that an organization actually pursues , as defined by the actions of its members.

Types of Plans

Types of Plans Apply to the entire organization BREADTH Strategic Plans Apply to the entire organization Establish the organization’s overall goals Seek to position the organization in terms of its environment Cover extended periods of time Operational Plans Specify the details of how the overall goals are to be achieved Cover short time period

Types of Plans (cont’d) TIME FRAME Long-Term Plans Time frames extending beyond three years Short-Term Plans Time frames of one year or less SPECIFICITY Specific Plans Clearly defined and leave no room for interpretation E.g. 3% reduction in cost & Increase revenues by 9% in next six months. Directional Plans Flexible plans that set out general guidelines, provide focus, yet allow discretion in implementation E.g. 5 to 10% Improvement

Types of Plans (cont’d) FREQUENCY OF USE Single-use Plan A one-time plan specifically designed to meet the needs of a unique situation Standing Plans Ongoing plans that provide guidance for activities performed repeatedly E.g. Examination policy

The planning process ‘Setting goals and developing plans that leads to goal attainment and ultimately, to organizational efficiency and effectiveness.’

Goal Attainment(org. efficiency and effectiveness The planning process Mission Goals Plans Goal Attainment(org. efficiency and effectiveness

Characteristics of Well-Designed Goals Goals Should be: Written in terms of outcomes rather than actions Measurable and quantifiable(Quality) Clear as to time frame Challenging yet attainable Written down Communicated to all organizational members who needs to know the goals

Setting goals S.M.A.R.T Specific Measurable Attainable Realistic Timely

Setting smart goals

Steps in Goal Setting Review the organization’s mission statement Do goals reflect the mission? Evaluate available resources Are resources sufficient to accomplish the mission? Determine goals individually or with others Are goals specific, measurable, and timely? Write down the goals and communicate them Is everybody on the same page? Review results and whether goals are being met What changes are needed in mission, resources, or goals?

Approaches to Establishing Goals Traditional Goal Setting Broad goals are set at the top of the organization Goals are then broken into subgoals for each organizational level Goals are intended to direct, guide, and constrain from above Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility

Traditional goal Setting ” We need to improve the company ’ s performance. ” ” I want to see a significant improvement Top in this division ’ s profits. ” Management ’ s Objective ” Increase profits Division regardless of the means. ” Manager ’ s Objective ” Don ’ t worry about quality; just work fast. ” Department Manager ’ s Objective Individual Employee ’ s Objective

Developing Plans Contingency Factors in Planning Manager’s level in the organization Strategic plans at higher levels Operational plans at lower levels Degree of environmental uncertainty Stable environment: specific plans Dynamic environment: specific but flexible plans Length of future commitments Current plans affecting future commitments must be sufficiently long-term to meet the commitments

Planning in the Hierarchy of Organizations

Enough for today. . .