Planning: The Foundation of Successful Management

Planning: The Foundation of Successful Management

I. Introduction to Planning, Strategy, and Strategic Management

• Planning Defined: Planning is the initial function within the four functions of the management process.

  • It entails establishing goals for the organization.

  • It involves determining the specific methods and actions required to achieve these goals.

  • A critical aspect of planning is ensuring that all plans are directly aligned and linked to the broader business strategy.

II. The Crucial Role of Direction and Momentum

• Why Direction and Momentum are Essential: Without effective planning, organizations and their managers face significant challenges:

  • Lack of Direction: Managers may become reactive, focusing solely on immediate issues or "putting out fires" instead of proactive, strategic initiatives.

  • Loss of Momentum: A constant preoccupation with daily operational pressures can cause an organization to lose its strategic impetus and progress.

• Illustrative Examples of Disruptive Change: These highlight the importance of foresight and adaptation through planning:

  • Amazon.com vs. Borders Books: Amazon's strategic planning revolutionized retail, profoundly impacting traditional booksellers like Borders.

  • Uber vs. Taxicabs: Uber leveraged technology and a new business model, challenging the established taxicab industry.

  • Blogs/Internet News vs. Newspapers: The rise of digital content distribution platforms significantly altered the landscape for conventional newspapers.

  • Microbreweries vs. Anheuser-Busch: Craft breweries, through niche marketing and product diversity, began to challenge the dominance of large-scale brewers.

III. Types of Planning and Management Levels

• Planning efforts within an organization are typically structured across three distinct types, corresponding to three different levels of management.

  • (Note: Specific details for these types and levels are not provided in the transcript, as they refer to a figure not included.)

IV. Setting SMART Goals

• SMART Goals Framework: A widely used criterion for effective goal setting, where goals are:

  • S - Specific: Goals must be articulated in clear, precise terms rather than vague generalities.

  • M - Measurable: Wherever feasible, goals should be quantifiable or measurable, allowing for objective assessment of progress and achievement.

  • A - Attainable: While goals should be challenging to foster growth, they must also be realistic and feasible to achieve, preventing demotivation.

  • R - Results-oriented: A select few goals (e.g., 5 per work unit) should be prioritized and expressed in terms of the desired outcomes or results. These goals must directly support the organization's overarching vision.

  • T - Target dates: Each goal must specify a clear deadline or target date by which it is expected to be accomplished.

V. Relationship Between Goal Difficulty and Performance

• There exists a well-researched relationship between the difficulty of a goal and an individual's or team's performance.

  • (Note: The specific details of this relationship, as illustrated in Figure 5.4, are not provided in the transcript text.)

  • Source: Adapted from E.A. Locke and G.P. Latham, A Theory of Goal Setting and Task Performance (Englewood Cliffs, NJ: Prentice Hall, 1990).

VI. Goal Accomplishment Example

• "Facing the Giants": A video example demonstrating principles of goal accomplishment is referenced.

  • (Note: Content details from the video are not provided in the transcript.)

VII. Management By Objectives (MBO): A Four-Step Process

• MBO Defined: MBO is a structured, four-step process primarily used for motivating employees and aligning individual goals with organizational objectives.

• The Four Steps:

  1. Joint Objective Setting: Managers and their employees collaboratively define and agree upon the employee's objectives.

  2. Action Plan Development: Managers then create detailed action plans outlining how the agreed-upon objectives will be achieved.

  3. Periodic Performance Review: Managers and employees regularly review the employee's progress and performance against the set objectives.

  4. Performance Appraisal and Reward: Based on the results achieved, managers conduct a formal performance appraisal and reward the employee accordingly.

VIII. Three Types of Objectives Used in MBO

• Source: Descriptions based on G. Latham, G. Seijts, and J. Slocum, "The Goal Setting and Goal Orientation Labyrinth: Effective Ways for Increasing Employee Performance," Organizational Dynamics, October-December 2016, pp 271-277.

• 1. Performance Objectives Focus: Express the objective as a tangible outcome or end-result.

  • Examples:

    • "Increase sport utility sales by 10\%."

    • "Reduce food spoilage by 15\%."

• 2. Behavioral Objectives Focus: Express the objective in terms of the specific behaviors or actions necessary to achieve a desired outcome.

  • Examples:

    • "Greet all potential automobile customers with a smile and offer to assist."

    • "Ensure food is stored in seal-proof containers."

    • "Attend five days of leadership training."

    • "Learn basics of Microsoft Office software by June 1."

• 3. Learning Objectives Focus: Express the objective in terms of acquiring new knowledge, skills, or competencies.

  • Examples:

    • "Attend sales training class."

    • "Learn how the features in our sports utility vehicles compare to competitors."