PowerPoint Presentation to Accompany Management Third Canadian Edition John R. Schermerhorn, Jr. Barry Wright Prepared by: Jim LoPresti University of Colorado, Boulder Revised by: Dr. Shavin Malhotra Ryerson University, Toronto, Ontario

Chapter 6: Planning Processes and Techniques Management 3e - Chapter 6 2

Chapter 6 Learning Objectives 6.1 Explain why and how managers plan. 6.2 Describe the types of plans managers use. 6.3 Identify and describe the various planning tools and techniques. 6.4 Explain how to implement plans to achieve results. Management 3e - Chapter 6 3

Why and How 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. Management 3e - Chapter 6 4

Why and How 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. Management 3e - Chapter 6 5

Why and How Managers Plan Figure 6.1 The roles of planning and controlling in the management process. Management 3e - Chapter 6 6

Why and How Managers Plan Benefits of planning: Improves focus and flexibility. Improves action orientation. Improves coordination and Control. Improves time management Management 3e - Chapter 6 7

Why and How Managers Plan Personal Time Management Tips: DO say “no” to requests that distract from what you should be doing. DON’T get bogged down in details that can be addressed later. DO screen telephone calls, emails, and meeting requests. Management 3e - Chapter 6 8

Why and How Managers Plan Personal Time Management Tips: DON’T let drop-in visitors instant messaging use up your time DO prioritize your important and urgent work DON’T become calendar bound by letting others control your schedule DO follow priorities; do most important and urgent work first. Management 3e - Chapter 6 9

Types of Plans Used by Managers 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. Management 3e - Chapter 6 10

Types of Plans Used by Managers Strategic and Tactical Plans Strategic plans — set broad, comprehensive, and longer-term action directions for the entire organization. Tactical plans — define what needs to be done in specific functions to implement strategic plans. Production plans Financial plans Facilities plans Marketing plans Human resource plans Management 3e - Chapter 6 11

Types of Plans Used by Managers Operational plans Policies and procedures 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. Management 3e - Chapter 6 12

Types of Plans Used by Managers Operational plans Budgets Single-use plans that commit resources to activities, projects, or programs. Fixed, flexible, and zero-based budgets. Management 3e - Chapter 6 13

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. Management 3e - Chapter 6 14

Planning Tools and Techniques Contingency planning Identifying alternative courses of action that can be implemented if circumstances change. Contingency plans anticipate changing conditions. Scenario planning A long-term version of contingency planning. Identifying alternative future scenarios. Plans made for each future scenario. “worst-case” and “best-case” scenarios Management 3e - Chapter 6 15

Planning Tools and Techniques Benchmarking Use of external and internal comparisons to better evaluate current performance and identify possible actions for the future. Adopting best practices of other organizations that achieve superior performance. Management 3e - Chapter 6 17

Planning Tools and Techniques Use of staff planners Coordinating and energizing the planning function. Help bring focus and expertise to accomplish important, often strategic, planning tasks. Possible communication gaps between staff planners and line management. Management 3e - Chapter 6 18

Implementing Plans to Achieve Results Goal Setting: Can make a big difference in how well management does in pointing people in the right directions and inspiring them to work hard. Great goals are SMART: Set specific goals. Make sure goals are measurable. Ensure goals are attainable. Goals must be referred to regularly. Goals must be timely. Management 3e - Chapter 6 19

Implementing Plans to Achieve Results Goal Alignment To make sure that goals and plans are well integrated across the many people, work units, and levels of an organization as a whole. Goals set anywhere in the organization should ideally help advance its overall mission or purpose Management 3e - Chapter 6 21

Figure 6.8 A sample hierarchy Implementing Plans to Achieve Results Figure 6.8 A sample hierarchy Management 3e - Chapter 6 22

Implementing Plans to Achieve Results 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. Management 3e - Chapter 6 23

Implementing Plans to Achieve Results 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. Management 3e - Chapter 6 24

Implementing Plans to Achieve Results Figure 6.9 Management by objectives as an integrated planning and control framework. Management 3e - Chapter 6 25

Implementing Plans to Achieve Results Types of MBO performance objectives Improvement Personal development Maintenance Criteria for effective performance objectives Specific Time defined Challenging Measurable Management 3e - Chapter 6 26

Implementing Plans to Achieve Results Pitfalls to avoid in using MBO Tying MBO to pay. Focusing too much attention on easily quantifiable objectives. Requiring excessive paperwork. Having managers tell workers their objectives. Management 3e - Chapter 6 27

Implementing Plans to Achieve Results 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. Management 3e - Chapter 6 28

Implementing Plans to Achieve Results 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. Management 3e - Chapter 6 29

Implementing Plans to Achieve Results Figure 6.10 How participation and involvement help build commitments to plans. Management 3e - Chapter 6 30

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