© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 8 Basic Managerial Planning

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives Discuss the nature of planning, including its purpose and where the responsibilities for planning lie within the organization. Define goals, note their purpose, and identify the steps in the goal-setting process. Identify and define three major kinds of plans.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives Describe three major time frames for planning and how these time frames are integrated within organizations. Define contingency planning and describe contingency events. Discuss how to manage the planning process by avoiding the roadblocks to effective planning.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Planning in Organizations Plan: blueprint or framework of how organization expects to achieve its goals. Planning: determining which path to follow in attempting to reach a goal. Planning activities: serve to project image of managerial competence.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Planning in Organizations Responsibilities for Planning – All managers involved in planning process. – In large organizations, planning starts with top management. – In smaller organizations, top managers plan alone or with participation of others in organization.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Planning in Organizations Responsibilities for Planning – Middle managers assist with strategic planning and undertake tactical planning. – First-line managers assist with tactical planning and developing operational plans.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Nature of Organizational Goals Definition and Purpose of Goals – Goal: desired state or condition organization wants to achieve. – Goals: clear purpose or direction for organization. – Essential for both management and employees to know company goals.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Goals – Goals by management level Organization’s purpose: its reason for existence. Organization’s mission: way it attempts to fulfill its purpose. – Goals by organizational area – Goals by time frame and specificity Specificity: extent to which goal is precise or general. The Nature of Organizational Goals

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Nature of Organizational Goals

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Steps in Setting Goals – Scan environment for opportunities and threats. – Assess organizational strengths and weaknesses. – Establish organizational goals that match strengths and weaknesses with opportunities and threats. – Set unit and subunit goals. – Monitor progress. The Nature of Organizational Goals

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Guidelines for Setting Goals (SMART) – S: specific, significant, stretching – M: measurable, meaningful, motivational – A: agreed upon, attainable, achievable, acceptable, action-oriented – R: realistic, relevant, reasonable, rewarding, results- oriented – T: timely, time-based, time-targeted, tangible, trackable, time-bound The Nature of Organizational Goals

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing Multiple Goals – Goal optimization Balancing and trading off between different goals for sake of organizational effectiveness. Allows organization to pursue unified vision and helps managers maintain consistency in their actions. The Nature of Organizational Goals

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kinds of Planning Strategic Planning – Formulates broad goals and plans developed by top managers to guide general directions of organization. Tactical Planning – Focuses on people and actions and how to implement strategic plans already developed.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kinds of Planning Operational Planning – Standing plans: plans for handling recurring and relatively routine situations. Policies Standard operating procedures (SOPs) Rules and regulations

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Kinds of Planning Operational Planning – Single-use plans: plans handling one-time-only events. Program Project

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Time Frames for Planning Long-Range Planning: several years to several decades; associated with activities. Intermediate Planning: one to five years; building blocks of long-range plans. Short-Range Planning: one year or less; day-to-day activities. – Integrating time frames

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Contingency Planning – Identify alternative courses of action if various conditions arise. Develop initial plan Change to contingency plan Change to another contingency plan Identification of contingency events Crises

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Contingency Planning

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing the Planning Process Roadblocks to Effective Planning – Environment – Resistance to change – Situational constraints – Poor goal setting – Time and expense

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing the Planning Process Avoiding the Roadblocks – Start at the top – Recognize the limits – Communicate – Participate – Integrate – Develop contingency plans

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Summary Plan is a blueprint or framework. Planning is determining how best to approach a particular goal. Goal is desired state/condition organization wants to achieve. Goals differentiated by level of management, area, time frame, and specificity. Six steps in goal-setting process.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Summary Goal optimization is balancing and trading off between different goals for sake of organizational effectiveness. Three kinds of plans: strategic, tactical, operational. Three major time frames for planning: long- range, intermediate, short-range. Time frames should be integrated with others to ensure smooth functioning of organization.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Summary Contingency planning: identifies alternative courses of action that organization may follow if various different conditions arise. Critical contingency events: extent to which ongoing plan being accomplished or environmental events.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Summary Roadblocks to effective planning: – Environment – Resistance to change – Situational constraints – Poor goal setting – Time and expense of planning

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Summary Guidelines for avoiding roadblocks: – Starting at the top – Recognizing the limits to planning – Communicating – Participating – Integrating – Developing contingency plans