1. Management, 6e Schermerhorn Prepared by Cheryl Wyrick California State Polytechnic University Pomona John Wiley & Sons, Inc

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3. Schermerhorn - Chapter 73 Chapter 7 Planning - to Set the Direction 4 Planning Ahead –Why is planning an essential management function? –What types of plans are used by managers? –What are the different approaches to planning? –What planning tools and techniques are useful? –How does Management by Objectives facilitate planning?

4. Schermerhorn - Chapter 74 Planning as a Management Function 4 To plan is to decide what to accomplish and how to do it –define objectives –evaluate accomplishments relative to objectives –develop premises regarding future conditions –analyze possible action alternatives –implement plan and evaluate results

5. Schermerhorn - Chapter 75 Planning as a Management Function 4 Benefits of Planning –more focus and flexibility –improved coordination –better control –better time management

6. Schermerhorn - Chapter 76 Types of Plans in Organizations 4 Short-Range and Long-Range Plans –Short-range = 1 year or less –Intermediate-range plans = 1-2 years –Long-range = 3 or more years

7. Schermerhorn - Chapter 77 Types of Plans in Organizations 4 Strategic and Operational Plans –Strategic plans address long-term needs set comprehensive action directions for an organization responsibility of top management

8. Schermerhorn - Chapter 78 Types of Plans in Organizations 4 Strategic and Operational Plans –Operational plans define what needs to be done in specific areas to implement strategic plans –production –financial –facilities –marketing –human resources

9. Schermerhorn - Chapter 79 Types of Plans in Organizations 4 Policies and Procedures –standing plans policy is a broad guideline for making decisions and taking action in specific circumstances procedures are plans that describe exactly what actions are to be taken in specific circumstances

10. Schermerhorn - Chapter 710 Budgets and Schedules 4 Single-use plans –budgets commit resources to activities, projects, or programs help clarify and reinforce action priorities facilitate the evaluation and control of results types are fixed, flexible, and zero-based

11. Schermerhorn - Chapter 711 Budgets and Schedules 4 Fixed budget –allocates resources on a single estimate of costs 4 Flexible budget –allows allocation of resources to vary in proportion with various levels of activity 4 Zero-based –project is budgeted as if it were brand new

12. Schermerhorn - Chapter 712 Budgets and Schedules 4 Project Schedules –single-use plans that identify the activities required to accomplish a specific major project

13. Schermerhorn - Chapter 713 Budgets and Schedules 4 Business Plan –typically used for new businesses –describes details necessary to set direction and get financing

14. Schermerhorn - Chapter 714 Approaches to Planning 4 Inside-Out Versus Outside-In Planning –inside-out planning focus future effort on what one is already doing, but try to improve –outside-in planning look to external environment for opportunities

15. Schermerhorn - Chapter 715 Top-Down Versus Bottom-Up Planning 4 Top-Down –senior management sets broad objectives –ensures common direction –can fail in implementation due to lack of lower level commitment

16. Schermerhorn - Chapter 716 Top-Down Versus Bottom-Up Planning 4 Bottom-Up –initiative that begins at lower levels of the organization –potential to generate high commitment –does not define an integrated direction

17. Schermerhorn - Chapter 717 Top-Down Versus Bottom-Up Planning 4 Best Planning Approach –begin at top –proceed in a participatory way

18. Schermerhorn - Chapter 718 Top-Down Versus Bottom-Up Planning 4 Contingency Planning –identifying alternative courses of action if and when original plan is inadequate

19. Schermerhorn - Chapter 719 Planning Tools and Techniques 4 Forecasting –making assumptions about what will happen in the future –part of a good plan –ultimately relies on human judgment

20. Schermerhorn - Chapter 720 Planning Tools and Techniques 4 Types of forecasting qualitative quantitative econometric modeling statistical surveys

21. Schermerhorn - Chapter 721 Planning Tools and Techniques 4 Use of Scenarios –identifying alternative future states of affairs –plans made for each scenario –increases organization’s flexibility

22. Schermerhorn - Chapter 722 Planning Tools and Techniques 4 Benchmarking –use of external comparisons to better evaluate one’s current performance –identify possible actions for the future –incorporate successful ideas into one’s own organization

23. Schermerhorn - Chapter 723 Planning Tools and Techniques 4 Participation and Involvement –Participative planning requires that workers who will be affected be included in the planning and/or implementation

24. Schermerhorn - Chapter 724 Planning Tools and Techniques 4 Role of Staff Planners –lead and coordinate planning system –help promote planning throughout organization –sometimes used as advisors to hire managers

25. Schermerhorn - Chapter 725 Management by Objectives (MBO) 4 MBO –structured process of regular communication –supervisor and worker jointly set performance objectives –jointly review results

26. Schermerhorn - Chapter 726 Management by Objectives (MBO) 4 Formal agreement –worker’s performance objectives for a specific time period –plans by which they will be accomplished –standards for measuring results –procedures for reviewing results

27. Schermerhorn - Chapter 727 Management by Objectives (MBO) 4 Advantages –clearly focuses employee work efforts –clearly focuses manager’s work efforts regarding areas of support –relationship building between manager and employee –employee participates in decisions that affect work

28. Schermerhorn - Chapter 728 Management by Objectives (MBO) 4 Performance objectives –improvement –personal development –maintenance

29. Schermerhorn - Chapter 729 Management by Objectives (MBO) 4 Performance objective criteria –specific –time defined –challenging –measurable

30. Schermerhorn - Chapter 730 Management by Objectives (MBO) 4 How to make MBO work –hire best people –work with them to set challenging performance objectives –give best possible support –hold employee accountable

31. Schermerhorn - Chapter 731 Management by Objectives (MBO) 4 Pitfalls to avoid –tying MBO to pay –focusing too much attention on easily quantifiable objectives –requiring excessive paperwork –have managers tell workers their objectives