Chapter 8 Foundations of Planning

planning

encompasses defining the organization’s objectives or goals, establishing an overall strategy for achieving these goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities.

Why do managers plan?

Provides direction; clarifies organizational goals

Why do managers plan?

Reduces uncertainty; encourages forward-thinking and anticipation of changes

Why do managers plan?

Minimizes waste and redundancy; coordinates work activities to identify inefficiencies

Why do managers plan?

establishes the goals or standards

breadth

strategic versus operational

time frame

short-term versus long-term

specificity

directional versus specific

frequency of use

single use versus standing

strategic plans

Plans that apply to the entire organization, that establish the organization’s overall objectives, and that seek to position the organization in terms of its environment.

mission

The purpose of an organization. For instance, Walmart’s “to save people money so they can live better.”

operational plans

Plans that specify the details of how the overall objectives are to be achieved. For instance, an organization’s monthly, weekly, and day-to-day plans are almost all operational.

short-term plans

Plans covering less than one year

long-term plans

Plans of five-years or more

specific plans

Plans that are clearly defined and leave no room for interpretation. For example, a manager who seeks to increase his or her firm’s sales by 20 percent over a given twelve-month period might establish specific procedures, budget allocations, and schedules of activities to reach that objective.

directional plans

Plans that are flexible and set out general guidelines

single-use plan

A one-time plan specifically designed to meet the needs of a unique situation. For instance, when Walmart wanted to expand the number of its stores in China, top-level executives formulated this as a guide.

standing plans

Ongoing plans that provide guidance for activities performed repeatedly. An example of this is the nondiscrimination and anti-harassment policy developed by Microsoft. It provides guidance to Microsoft executives and staff as they make hiring plans and do their jobs.

What contingency factors affect planning?

Level in organization; For the most part, operational planning dominates the planning activities of lower-level managers. As managers rise in the hierarchy, their planning role becomes more strategy oriented.

What contingency factors affect planning?

Degree of environmental uncertainty