1. Introduction to Planning
MGT Principles of Management and Business
Introduction to Planning
Faisal AlSager
Week 5

2. Objectives To discuss the nature and purposes of planning
To compare and contrast approaches to goal setting and planning
To discuss contemporary issues in planning

3. Why Should Managers Formally Plan?
Planning establishes coordinated effort
By forcing managers to look ahead, anticipate change, consider the impact of change, and develop appropriate responses, planning reduces uncertainty
Planning reduces overlapping and wasteful activities
Planning establishes the goals or standards that facilitate control

4. Criticism of Formal Planning
Planning may create rigidity
Formal planning cannot replce intuition and creativity
Planning focuses managers’ attention on today’s competition not tomorrow’s survival
Formal planning reinforces success, which may lead to failure

5. Goals and Plans Goals (objectives): are desired outcomes or targets
Plans: are documents that outline how goals are going to be met

6. Types of Goals
Financial goals relates to the financial performance of the organization
Strategic goals relates to all other areas of the organization’s performance

7. Stated and Real Goals
Stated goals are official statements of what an organization says, and what it wants its stakeholders to believe, its goals are
Real goals are those goals an organization actually pursues as shown by what the organization’s members are doing

8. Setting Goals
Traditional goal setting: are goals set by top managers flow down through the organization and become subgoals for each organization area
Means-End Chain: is an integrated network of goals in which higher-level goals are linked to lower-level goals, which serve as the means for their accomplishment
Management by objectives (MBO): is a process of setting a mutually agreed-upon goals and using those goals to evaluate employee performance

9. Well-Written Goals Characteristics of well-written goals:
Written in terms of outcomes rather than actions
Measurable and quantifiable
Clear as to time frame
Challenging yet attainable
Written down
Communicated to all necessary organizational members

10. Steps in Goal Setting
Managers have to follow six steps when setting goals:
Review the organizations’s mission and the employee’s key job tasks.
Evaluate available resources.
Determine the goals individually or with input of others.
Make sure goals are well-written and then communicate them to all who need to know.
Build in feedback mechanisms to assess goal progress.
Link rewards to goal attainment.

11. Types of Plans
The most popular ways to describe plans are in terms of:
breadth (strategic plans vs. tactical plans),
time frame (long-term plans vs. short-term plans),
specificity (specific plans vs. directional plans), and
frequency of use (single use plans vs. standing plans)

12. Breadth
Strategic plans are plans that apply to the entire organization and encompass the organization’s overall goals
Tactical plans are plans that specify the details of how the overall goals are to be achieved

13. Time Frame
Long-term plans are plans with a time frame beyond three years
Short-term plans are plans with a time frame of one year or less

14. Specificity
Specific plans are plans that are clearly defined and leave no room for interpretation
Directional plans are plans that are flexible and set general guidlines

15. Frequency of Use
Single-use plan is a one-time plan specifically designed to meet the needs of a unique situation
Standing plans are plans that are ongoing and provide guidance for activities performed repeatedly

16. Contingency Factors in Planning
Three contingency factors affect the choice of planning:
Organizational level
Degree of environmental uncertainty
Length of future commitments

17. The Commitment Concept
Definition
The idea that plans should extend far enough to meet those commitments made when the plans where developed

18. Approaches to Planning
Traditional approach: top managers develop plans with the assistance of a formal planning department
Formal planning department a group of planning specialists whose sole responsibility is to help write the various organizational plans
Another approach: involve more organizational members in the process

19. Planning in a Dynamic Environment
Plans need to be specific and flexible
Planning should be an ongoing process
Managers need to stay alert to environmental changes
Make the organizational hierarchy flatter

20. Environmental Scanning
Environmental scanning: an analysis of the external environment that involves screening large amounts of information to detect emerging trends
Competitive intelligence: a type of environmental scanning that gives managers accurate information about competitors

21. Learning Outcomes
Planning is an essential element for the success of an organization
There different types of goals and plans, and each serve different needs and work in different contexts
Also, there different approaches to planning: top manager’s approach and integrated approach
Managers are surrounded by dynamic environment where rigid plans will not be able to adapt