1. Basic Elements of Planning and Decision Making
Chapter 7
Basic Elements of Planning and Decision Making

2. Learning Objectives
After studying this chapter, you should be able to:
Summarize the function of decision making and the planning process.
Discuss the purpose of organizational goals, identify different kinds of goals, discuss who sets goals, and describe how to manage multiple goals.
Identify different kinds of organizational plans, note the time frames for planning, discuss who plans, and describe contingency planning.
Discuss how tactical plans are developed and executed.
Describe the basic types of operational plans used by organizations.

3. Decision Making and the Planning Process
Is the cornerstone of planning.
Is the catalyst that drives the planning process.
Underlies every aspect of setting goals and formulating plans.
Planning
All organizations plan, but not in the same fashion.
All planning occurs within an environmental context.
All goals require plans to guide in their achievement.
All goals are tied higher goals and plans

4. The Planning Process

5. The Planning Process
The planning process takes place within an environmental context. Managers must develop a complete and thought understanding of this context to determine the organization’s mission and develop its strategic , tactical and operational goals and plans.

6. Organizational Goals Purposes of Goals
Provide guidance and a unified direction for people in the organization.
Strongly affect on the quality of other aspects of planning.
Serve as a source of motivation for employees.
Provide a mechanism for evaluation and control of the organization.

7. Kinds of Goals By Level By Area By Time Frame Mission statement
Strategic goals
Tactical goals
Operational goals
By Area
Different functional areas of the organization.
By Time Frame
Long-term, intermediate-term, or short-term time frames and explicit time frames or open-ended.

8. Kinds of Organizational Goals for a Regional Fast-Food Chain

9. Learning topics Responsibilities for planning
Goals: responsibilities and optimizing
Plans
Timeframe
Types
Tactical planning
Development
Execution
Operational Planning
Contingency planning
Definition
Crisis Management
Responsibilities for planning

10. Responsibilities of Setting Goals
Who Sets Goals?
All managers: managerial responsibility for goal setting should correspond to the manager’s level in the organization.

11. Responsibilities of Setting Goals
Managing Multiple Goals
Optimizing allows managers to balance and reconcile conflicting goals
Managers can choose to pursue one goal and exclude all others or to seek a mid-range goal.

12. Time Frames for Planning
Long-range Plans
Cover present and future strategic issues extending beyond five years in the future.
Intermediate Plans
Cover from 1 to 5 years and parallel tactical plans.
Are the principal focus of organizational planning efforts.
Short-range Plans
Are operational (action) and contingency (reaction) plans that have a time frame of one year or less.

13. Action Plan Reaction Plan Operationally any other kind of plan
A plan designed to allow the company to react to unforeseen circumstance

14. Kinds of Organizational Plans
Strategic Plans
A general plan set by and for top management that outlines resource allocation, priorities, and action steps to achieve strategic goals.
Tactical Plans
A plan aimed at achieving the tactical goals set by and for middle management.
Operational Plans
Short-term focus plans that are set by and for lower-level managers.

15. Planning in more details ..
Tactical Planning
Operational Planning
Contingency Planning

16. Tactical Planning Developing TP Executing TP
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17. Developing and Executing Tactical Plans

18. Developing TP
Plan
Goals
Resources
Commitment

19. Developing TP Plan Goals Resources Commitment Strategic Tactical
Human, Financial, Physical and Information
Commitment
Human resources

20. Information & Resources
Developing TP
Executing TP
Evaluate
Information & Resources
Monitor
Communication
Plan
Strategic
Goals
Tactical
Resources
Human, Financial, Physical and Information
Commitment
Human resources

21. Information & Resources
Developing TP
Executing TP
Evaluate
On-ongoing activities for goal achievement
Information & Resources
Evaluate actions in light of goals
Monitor
Obtain and distribute
Communication
Horizontally and vertically
Plan
Strategic
Goals
Tactical
Resources
Human, Financial, Physical and Information
Commitment
Human resources

22. Operational Planning - Types
Single Use Plans
Standing plans
Program
Project
Policy
Standard Operating Procedure
Rules and regulations
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23. Types of Operational Plans

24. Contingency Planning
Contingency is the determination of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate. These plans help managers to cope with uncertainty and change.
Crisis Management: managing crisis (disasters) by following a set of procedures

25. Responsibilities for Planning

26. Responsibilities of Planning
Identify BOD and explain their role in planning.
Identify CEO and explain what is her/his role in the planning process.
Identify the Executive Committee and explain what is their planning role.
What is the difference between a line and a staff managers?
What is the planning role of the line managers
Explain the planning role of “Planning Manager”.
Are all planning committees permanent
Can organization's create a planning committee for a specific purpose which will be eliminated when the plans are executed? If yes, what will it be called?

27. Responsibilities of Planning
Line Management
Chief Executive Office
Board of Directors
Planning Staff
Planning Task Force
Line Managers
The only function of this team is to plan. They are responsible to gather information, coordinate planning activities between the different part of the organization. As they are experts in planning, they take a broader view of planning than individual managers
This body is created when the organization wants to address special circumstances. For example to explore how to expand to Europe the team will include representatives from each of the major units within the company, the corporate planning staff, and the management team that would run the European operation. Once the plan for entering the European market was formulated and implemented, this team will be eliminated.
This body is responsible to establish corporate mission and strategy and to govern the overall corporation. Nowadays, this body is more active in the planning process.
Plays a major role in the complete planning process and is responsible for the implementation of the strategy.
This body is usually composed of the top executives in the organization working together as a group. The members usually provide input to the CEO on the proposals that effect their own unit and to review the various strategic plans that develop from this input.
This body plays an important role in an organization’s planning process for two reasons. First, they are a valuable source of inside information for other managers as plans are formulated and implemented. Second, they must executed plans formulated by higher level managers.

29. Responsibilities of Planning
Executive Committee
Chief Executive Office
Board of Directors
Planning Staff
Planning Task Force
Planning staff
The only function of this team is to plan. They are responsible to gather information, coordinate planning activities between the different part of the organization. As they are experts in planning, they take a broader view of planning than individual managers
Planning Task Force
This body is created when the organization wants to address special circumstances. For example to explore how to expand to Europe the team will include representatives from each of the major units within the company, the corporate planning staff, and the management team that would run the European operation. Once the plan for entering the European market was formulated and implemented, this team will be eliminated.
BOD
This body is responsible to establish corporate mission and strategy and to govern the overall corporation. Nowadays, this body is more active in the planning process.
CEO
Plays a major role in the complete planning process and is responsible for the implementation of the strategy.
Executive Committee
This body is usually composed of the top executives in the organization working together as a group. The members usually provide input to the CEO on the proposals that effect their own unit and to review the various strategic plans that develop from this input.
Line Management
This body plays an important role in an organization’s planning process for two reasons. First, they are a valuable source of inside information for other managers as plans are formulated and implemented. Second, they must executed plans formulated by higher level managers.

30. Board of Directors Establishes corporate mission and strategy.
May engage in strategic planning.

31. CEO
Has a major role in planning and implementing the strategy.

32. Executive Committee Top executives within the organization
Frequent input to the CEO
Review strategic plans

33. Planning Staff
Planning staff personnel gather information, coordinate planning activities, and take a broader view than individual managers.

34. Line Managers Providers of Information
Responsible for executing the plans developed by top management.

35. Planning Task Force
Created when the organization wants a special circumstance addressed.

36. Key Terms mission strategic goal tactical goal operational goal
optimizing
strategic plan
tactical plan
operational plan
reaction plan
long-range plan
intermediate plan
short-range plan
crisis management
single-use plan
program
project
standing plan
policy
rules and regulations