1. PowerPoint Presentation to Accompany Management, 10/e John R. Schermerhorn, Jr. Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley & Sons, Inc. Chapter 7: Planning Processes and Techniques

2. Management 10/e - Chapter72 Planning Ahead — Chapter 7 Study Questions  Why and how do managers plan?  What types of plans do managers use?  What are the useful planning tools and techniques?  How can plans be well implemented?

3. Management 10/e - Chapter73 Study Question 1: Why and how do managers plan?  Planning The process of setting objectives and determining how to best accomplish them.  Objectives Identify the specific results or desired outcomes that one intends to achieve.  Plan A statement of action steps to be taken in order to accomplish the objectives.

4. Management 10/e - Chapter74 Study Question 1: Why and how do managers plan?  Steps in the planning process: Define your objectives. Determine where you stand vis-à-vis objectives. Develop premises regarding future conditions. Analyze and choose among action alternatives. Implement the plan and evaluate results.

5. Management 10/e - Chapter75 Figure 7.1 The roles of planning and controlling in the management process.

6. Management 10/e - Chapter76 Study Question 1: Why and how do managers plan?  Benefits of planning: Improves focus and flexibility. Improves action orientation. Improves coordination. Improves time management. Improves control.

7. Management 10/e - Chapter77 Study Question 1: Why and how do managers plan?  Personal Time Management Tips: DO say “no” to requests that distract from what you should be doing. DON’T get bogged down in details that can be addressed later. DO screen telephone calls, emails, and meeting requests.

8. Management 10/e - Chapter78 Study Question 1: Why and how do managers plan?  Personal Time Management Tips: DON’T let drop-in visitors instant messaging use up your time DO prioritize your important and urgent work DON’T become calendar bound by letting others control your schedule DO follow priorities; do most important and urgent work first.

9. Management 10/e - Chapter79 Study Question 2: What types of plans do managers use?  Short-range and long-range plans Short-range plans = 1 year or less Intermediate-range plans = 1 to 2 years Long-range plans = 3 or more years  People vary in their capability to deal effectively with different time horizons.  Higher management levels focus on longer time horizons.

10. Management 10/e - Chapter710 Study Question 2: What types of plans do managers use?  Strategic and operational plans Strategic plans — set broad, comprehensive, and longer-term action directions for the entire organization. Operational plans — define what needs to be done in specific areas to implement strategic plans.  Production plans  Financial plans  Facilities plans  Marketing plans  Human resource plans

11. Management 10/e - Chapter711 Study Question 2: What types of plans do managers use?  Policies and procedures Standing plans  Policies and procedures that are designed for repeated use. Policy  Broad guidelines for making decisions and taking action in specific circumstances. Rules or procedures  Plans that describe exactly what actions are to be taken in specific situations.

12. Management 10/e - Chapter712 Study Question 2: What types of plans do managers use?  Budgets and project schedules Single-use plans  Only used once to meet the needs and objectives of a well-defined situation in a timely manner. Budgets  Single-use plans that commit resources to activities, projects, or programs.  Fixed, flexible, and zero-based budgets. Projects  One-time activities that have clear beginning and end points.  Project management and project schedules.

13. Management 10/e - Chapter713 Study Question 3: What are the useful planning tools and techniques?  Forecasting Making assumptions about what will happen in the future. Qualitative forecasting uses expert opinions. Quantitative forecasting uses mathematical and statistical analysis. All forecasts rely on human judgment. Planning involves deciding on how to deal with the implications of a forecast.

14. Management 10/e - Chapter714 Study Question 3: What are the useful planning tools and techniques?  Contingency planning Identifying alternative courses of action that can be implemented to meet the needs of changing circumstances. Contingency plans anticipate changing conditions. Contingency plans contain trigger points.

15. Management 10/e - Chapter715 Study Question 3: What are the useful planning tools and techniques?  Scenario planning A long-term version of contingency planning. Identifying alternative future scenarios. Plans made for each future scenario. Increases organization’s flexibility and preparation for future shocks.

16. Management 10/e - Chapter716 Study Question 3: What are the useful planning tools and techniques?  Benchmarking Use of external comparisons to better evaluate current performance and identify possible actions for the future. Adopting best practices of other organizations that achieve superior performance.

17. Management 10/e - Chapter717 Study Question 3: What are the useful planning tools and techniques?  Use of staff planners Coordinating the planning function for the total organization or one of its major components. Possible communication gaps between staff planners and line management.

18. Management 10/e - Chapter718 Study Question 4: How can plans be well implemented?  Project management… Makes sure activities required to complete a project are planned well and accomplished on time and within budget  Projects – one-time activities with many component tasks that must be completed in proper order and within budget

19. Management 10/e - Chapter719 Study Question 4: How can plans be well implemented?  Gantt charts – graphic display of scheduled tasks required to complete a project  CPM/PERT – a combination of the critical path method and the program evaluation and review technique  Critical path – pathway from project start to finish that involves activities with the longest completion times

20. Management 10/e - Chapter720 Study Question 4: How can plans be well implemented?  Key issues and principles in the goal-setting process: Set specific goals. Set challenging goals. Ensure goals are attainable. Goals must be timely. Make sure goals are measurable.

21. Management 10/e - Chapter721 Study Question 4: How can plans be well implemented?  Goal-setting theory Participation in goal setting  unlocks the motivational potential of goal setting.  management by objectives (MBO) promotes participation.  when participation is not possible, workers will respond positively if supervisory trust and support exist.

22. Management 10/e - Chapter722 Figure 7.2 A sample hierarchy

23. Management 10/e - Chapter723 Study Question 4: How can plans be well implemented?  Management by Objectives (MBO) A structured process of regular communication. Supervisor/team leader and workers jointly set performance objectives. Supervisor/team leader and workers jointly review results.

24. Management 10/e - Chapter724 Study Question 4: How does management by objectives operate?  MBO involves a formal agreement specifying … Workers’ performance objectives for a specific time period. Plans through which performance objectives will be accomplished. Standards for measuring accomplishment of performance objectives. Procedures for reviewing performance results.

25. Management 10/e - Chapter725 Figure 7.3 Management by objectives as an integrated planning and control framework.

26. Management 10/e - Chapter726 Study Question 4: How does management by objectives operate?  The MBO process: Supervisor and workers jointly set objectives, establish standards, and choose actions. Workers act individually to perform tasks; supervisors act individually to provide necessary support. Supervisor and workers jointly review results, discuss implications, and renew the MBO cycle.

27. Management 10/e - Chapter727 Study Question 4: How does management by objectives operate  Types of MBO performance objectives Improvement Personal development Maintenance  Criteria for effective performance objectives Specific Time defined Challenging Measurable

28. Management 10/e - Chapter728 Study Question 4: How does management by objectives operate?  Pitfalls to avoid in using MBO Tying MBO to pay. Focusing too much attention on easily quantifiable objectives. Requiring excessive paperwork. Having managers tell workers their objectives.

29. Management 10/e - Chapter729 Study Question 4: How does management by objectives operate?  Advantages of MBO Focuses workers on most important tasks and objectives. Focuses supervisor’s efforts on important areas of support. Contributes to relationship building. Gives workers a structured opportunity to participate in decision making.

30. Management 10/e - Chapter730 Study Question 4: How can plans be well implemented?  Participation and involvement Participatory planning requires that the planning process include people who will be affected by the plans and/or will help implement them. Benefits of participation and involvement:  Promotes creativity in planning.  Increases available information.  Fosters understanding, acceptance, and commitment to the final plan.

31. Management 10/e - Chapter731 Figure 7.4 How participation and involvement help build commitments to plans.

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