Badua, Adrian Ultado, John Benjamin

After discussing this section you should be able to: 1. discuss the costs and benefits of planning. 2. describe how to make a plan that works.

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.

Informal not written down, short term focus specific to an organization.

Formal Involved shared goals for the organization Written Specific Long term focus

Purposes of Planning Provides direction Reduces uncertainty Minimizes waste and redundancy Sets the standards for controlling

The Benefits The Pitfalls of Planning

Intensified Effort Persistence Direction Creation of Task Strategies It Works!

Impede Change & Prevent Adaptation Create a False Sense of Certainty Detachment of Planners

Leaders must have a vision Planners must be close to events Plans must be flexible

Set Goals Develop Commitment to Goals Develop Effective Action Plans Track Progress Toward Goal Achievement Maintain Flexibility in Planning Adapted from Exhibit 4.1

S pecific M easurable A ttainable R ealistic T imely

The determination to achieve a goal Increased by: Setting goals through participation Making goals reasonable Making goals public Obtaining top management support

For accomplishing a goal, these list the: specific steps people resources time period

One method, setting: proximal goals - short-term distal goals - long-term Second method: gather and provide performance feedback make adjustments in: effort direction strategies

Option-based planning keep options open through simultaneous investment invest more in promising options Learning-based planning plans need to be continuously adjusted encourages frequent reassessment and revision of goals

After discussing this section you should be able to: 3. discuss how companies can use plans at all management levels, from top to bottom, 4. describe the different kinds of special-purpose plans that companies use for change, contingencies, and product development.

Vision Adapted from Exhibit 4.3

Vision Mission Tactical Plans Management by Objectives Operational Plans Standing Plans Single-Use Plans Adapted from Exhibit 4.4 Top Managers Middle Managers First-Level Managers

Vision statement of purpose enduring, inspirational, clear, and consistent with company beliefs and values Mission flows from vision more specific goal statements

Targeting set a clear, specific target Common-Enemy vow to defeat a rival Role-Model emulate a successful company Internal-Transformation strive to dramatically change the company

Tactical Plans specify how a company will use resources, budgets, and people to accomplish goals Management by Objectives develop and carry out tactical plans four steps discuss goals participatively select goals jointly develop tactical plans meet to review performance

Management by Objectives (MBO) MBO & Production 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 97% 68% MBO is based on goals, participation and feedback. Companies that use MBO are 97% more likely to outproduce companies that don’t!

Operational plans day-to-day plans Single-use plans cover one-time-only events Standing plans plans for recurring events three kinds policies procedures rules & regulations Budgeting

Planning for Change Planning for Contingencies Planning for Product Development

Stretch goals extremely ambitious goals initially employees don’t know how to accomplish Benchmarking identify outstanding practices in other companies adapt them to your company

Stretch goals are more than just demanding more from employees Give employees the tools to succeed Don’t punish failure Steve Kerr on Stretch Goals at GE

 Define the scope of the scenario  Identify the major stakeholders  Identify environmental trends  Identify key uncertainties and outcomes of these trends  Using steps 1-4, create initial scenarios  Check each scenario for consistency and plausibility of facts  Create contingency plans from each scenario

Aggregate product plans Four keys to faster product development cross-functional teams internal and external communication overlapping development phases frequent testing of product prototypes

January July January July January Block Diagram Evolution of System Specification Simulation ASIC and Board Design Hardware Mock-ups & Models “Bring-up” Full System Prototype Ship Date ConceptualizationSimulationImplementation Adapted from Figure 4.7

plan/main plan/main Williams, Chuck, (2009), Management, Planning, Shahrol Aman Ahmad, Azhari Ramli, Nasri Nalimi, Azelin Aziz, Dr. Santhi Raghavan, (2009), Fundamentals Of Management, Planning and Decision Making, Quin, Susan, (2010), Management Basics, Planning in the Organization,

Boeing vs Airbus Reference: Douglas A. Irwin, Nina Pavcnik, (2003), Airbus versus Boeing Revisited: International Competition in the Aircraft Market Cola Wars: The New Coke Reference: Ford Motor Company Reference: Williams, Chuck, (2009), Management, Planning, 155. Video Reference: