Planning and Strategic Management Chapter 3 Business Management 12 Ms. Stewart

REVIEW What is planning? REVIEW  Planning is a management function that involves defining goals, establishing a strategy for achieving those goals, and developing plans to integrate and coordinate activities  Planning is concerned with both ends (what is to be done) and means (how it is to be done)

Formal vs Informal  Planning can be either formal or informal  Informal planning is not written down and there is little sharing of goals with others; more common in smaller organizations  Formal planning involves planning goals for a specific period of time; they are written down and shared and specific action plans are created to achieve goals

Purposes of Planning  Planning provides direction to managers and nonmanagers: →When employees know the direction that the organization is going in, they can coordinate their activities to accomplish defined goals →Without planning, departments and individuals may actually prevent one another from moving efficiently toward goals →Without planning, departments and individuals may actually prevent one another from moving efficiently toward goals

Purposes of Planning  Planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact of change, and develop appropriate responses → Managers plan in order to anticipate change and develop the most effective responses to it → Managers plan in order to anticipate change and develop the most effective responses to it

Purposes of Planning  Planning reduces overlapping and wasteful activities → When work activities are coordinated around plans, redundancy can be minimized → When work activities are coordinated around plans, redundancy can be minimized

Purposes of Planning  Planning establishes the goals or standards that are used in controlling → Through controlling we can compare actual performance against the goals → Through controlling we can compare actual performance against the goals

Traditional Goal Setting  This is an approach to setting goals in which goals are set at the top of the organization and then broken into subgoals for each organizational level

Characteristics of Well-Designed Goals  Written in terms of outcomes, rather than actions  Measurable  Clear time frame  Challenging yet attainable  Written down  Communicated to all necessary organizational members