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

2. 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)

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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