Planning
is a primary managerial activity
planning involves:
Defining the organisation’s goals
Establishing an overall strategy for achieving those goals
Developing plans for organisational work activities
informal planning
not written down, short-term focus, specific to an organisational unit
Formal
written, specific, and long term focus, involved shared goals for the organisation
purpose of planning
Provides purpose
Reduces uncertainty
Minimises waste and redundancy
Sets the standards for controlling
elements of planning
goals, plans
Goals (or objectives)
desired outcomes for individuals, groups, or entire organisations, provide direction and evaluation performance criteria
Plans
documents that outline how goals are to be accomplished, describe how resources are to be allocated and establish activity schedules
types of goals
financial goals, strategic goals, stated goals vs real goals
Financial Goals
are related to the expected internal financial performance of the organisation
Strategic Goals
related to the performance of the firm relative to factors in its external environment
Stated goals Vs. Real goals
broadly-worded official statements of the organisation (intended for public consumption) that may be irrelevant to its real goals (what goes on in the organisation)
Breadth; strategic plans
Apply to the entire organisation Establish the organisation’s goals Seek to position the environment in terms of its environment Cover extended periods of time
Breadth; operational plans
Specify the details of how the overall goals are to be achieved Cover short time period
Time frame; long term plans
Plans with time frames extending beyond three years
time frame; short term plans
Plans with time frames on one year or less
specificity; specific plans
Plans that are clearly defined and leave no room for interpretation
specificity; directional plans
Flexible plans that set out general guidelines, provide focus, yet allow discretion in implementation
frequency of use; single use plan
A one-time plan specifically designed to meet the need of a unique situation
Frequency of Use; Standing Plans
Ongoing plans that provide guidance for activities performed repeatedly
Traditional Goal Setting
-Broad goals are set at the top of the organisation -Goals are broken into subgoals for each organisational level -goals are intended to be direct
Means-end Chain
Network of goals that results from establishing a clearly defined hierarchy of organisational goals Achievement of lower-level goals is the means by which to reach higher-level goals (ends)
Management By Objectives (MBO)
Specific performance are determined by employees and managers Progress towards accomplishing goals is periodically reviewed Rewards are allocated on the basis of progress towards the goals Key elements of MBO: goal specificity, participative decision making, an explicit performance/evaluation period, feedback
Manager’s level in the organisation
Strategic plans at higher levels Operational plans at lowers levels
Stable environment
specific plans
Dynamic environment
specific but flexible plans
Commitment concept
current plans affecting future commitments must be sufficiently long-term to meet those commitments
Establishing a formal planning department
Group of planning specialists who help managers write organisational plans
Involving organisational members in the process
Plans are developed by members of organisational units at various levels and then coordinated with other units across the organisation
issues in planning, disadvantages
-May create rigidity -Plans cannot be developed for dynamic environments -Does not replace intuition and creativity
Effective planning in Dynamic Environments
-Develop plans that are specific but flexible -Understand that planning is a process -Plans change depending on the conditions -Flatten the organisational hierarchy to foster the development of planning skills at the organisational levels