15–1 What Is Planning? Planning Planning is choosing a goal and developing a strategy to achieve that goal

15–2 What Is Planning? A primary functional managerial activity 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. Types:  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.

15–3 Why Do Managers Plan? Purposes of Planning 1. Planning is primary management function that establishes the basis for all other management functions.

15–4 Why Do Managers Plan? Purposes of Planning in POLCA: Planning for Planning Planning for Organizing Planning for Leading Planning for Controlling Planning for Assurance

15–5 Why Do Managers Plan? Purposes of Planning 2. Planning establishes coordinated effort. 3. Planning reduces uncertainty. (Time) 4. Planning reduces overlapping and wasteful activities. “Every one is responsible then no body is responsible” 5. Planning establishes goals and standards used in controlling.

15–6 Why Do Managers Plan? Planning and Performance Relationship 1. Generally speaking, formal planning is associated with: i.Higher profits ii.Higher return on assets 2. Quality of the planning process and appropriate implementations of plans contribute more to high performance than does the extent of planning.

15–7 Why Do Managers Plan? Planning and Performance 3. External environment may undermine the effects of formal planning. 4. Planning/Performance relationship is influenced by the planning time frame.

15–8 Planning It involves defining the organization’s goals, establishing an overall strategy, and developing a comprehensive set of plans to integrate and coordinate organizational work. “Planning is choosing a goal and developing a strategy to achieve that goal”

15–9 Benefits of Planning Intensified Effort Creation Of Task Strategies PersistenceDirection

15–10 Functions of Planning 1.Identifying future opportunities 2.Exploring and avoiding future problems 3.Developing course of actions 4.Understanding the risks and uncertainties associated with various options

15–11 Why Do Managers Plan? The Role of Goals and Plans In Planning Goals (Desired Outcomes/also Objectives): Provide direction for all management decisions. Represent the criteria against which actual work accomplishments can be measured. Plans Outline how goals are going to meet.

15–12 Why Do Managers Plan? Characteristics of Well-Designed Goals 1.Should be written in terms of outcomes 2.Should be measurable and quantifiable 3.Should be clear as to a time frame 4.Should be challenging but attainable

15–13 Why Do Managers Plan? Characteristics of Well-Designed Goals 5.Should be written down 6.Should be communicated to all organization members who need to know the goals

15–14 Why Do Managers Plan? Types of Goals All organizations have multiple objectives. (Sales obj., marketing, production etc.) No single measure can evaluate whether an organization is successful or not. (Sale is high but financial objective is not achieved) 1.Financial goals Relate to financial performance 2.Strategic Goals Relate to other areas of performance 3.Stated Goals versus Real Goals Broadly-worded official statements of the organization (intended for public consumption) that may be irrelevant to its real goals (what actually goes on in the organization).

15–15 Why Do Managers Plan? Types of Plans Apply to entire organization. Establish organization’s overall long term goals to position the organization in terms of its environment. Operational Plans  Specify the details of how the overall goals to be achieved.  Tend to cover short term periods. 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.

15–16 Why Do Managers Plan? Long-Term Plans  Plans with time frames extending beyond three years Short-Term Plans  Plans with time frames on one year or less Specific Plans  Plans that are clearly defined and leave no room for interpretation Directional Plans  Flexible plans that set out general guidelines, provide focus, yet allow discretion in implementation. Single-Use Plan  A one-time plan specifically designed to meet the need of a unique situation. Standing Plans  Ongoing plans that provide guidance for activities performed repeatedly.

15–17 Why Do Managers Plan? Types of Planning Informal: Nothing is written down Little or no sharing of goals General and in lacking of continuity Formal: Written and defined specific goals Specific action programs exist to achieve goals

15–18 Best Approach to Planning

15–19 Why Do Managers Plan? Developing Plans Approaches to Planning: Traditional, top down approach Planning done by top managers Formal Planning Department: Specialists whose sole responsibility is to help to write organizational plans

15–20 Why Do Managers Plan? Developing Plans Approaches to Planning: Inclusive Approach Employees at each level develop plans suited to their needs. Employees acquire greater sense of the importance of the planning when they participate in the process.

15–21 The Planning Process Setting goals and developing plans that leads to goal attainment and ultimately, to organizational efficiency and effectiveness. (Performance, profitability, decrease customer complaints, increase customer satisfaction, needs, awareness etc.)