ch3 foundations of planning.pptx

8/18/2019 ch3 foundations of planning.pptx

1/35

Ch 3:Foundationsof planning


2/35

What is the planning ?

The process of outlining the activities that arenecessary to achieve the goals of the

organization.

Two major items in planning :-

1. Setting goals or objectives

2. Listing or ientifying activities to reach thesegoals ! "ow to reach these goals# $


3/35

What is the plan ?

%s a specific ocumente intention consisting of anobjective !en$ an an action statement !means $.

State what & when & how & something to be one.

'otes :-

(lanning is a future oriente.

(lanning is often calle the primarymanagement function.

(lan is the en result of planning process.


4/35

Purpose ofPlanning

The purpose of planning is simple - to ensurethat the organization is both effective and

efficient in its activities.

What ? ( objectives)

How ? (method)

When ? ( time frame )

Where ? (place)

Who ? (responsibilit)


5/35

Reasons (Benets) ofPlanning

1. )etter *oorination –!lanning provides a founation for the

coorination of a broad range oforganizational activities.

–" plan helps to efine the responsibilities of

iniviuals an wor+ groups and helpscoordinate their activities.


6/35

2. ,ocus on ,orwar Thin+ing

–The planning function forces managers to

thin+ ahea and consider resource nees

and potential opportunities or threats that the organization ma face in the future.


7/35

. (articipatory or+ /nvironment –#uccessful planning re$uires the participation of

a wide range of organizational members. This

creates a more participator wor% environment.


8/35

0 participatory wor+ environment is goo

for two reasons:

The organizationbenefts by havingaccess to a broad

base of experienceand no!ledge in

the planning process.

The organizationbenefts by havingaccess to a broad

base of experienceand no!ledge in

the planning process.

Organizationalmembers are more

likely to "bu# in$ to a

plan that the# ha%ehelped de%elop.

Organizationalmembers are more

likely to "bu# in$ to a

plan that the# ha%ehelped de%elop.


9/35

. ore /ffective *ontrol System

–"n organization&s plan provides a

founation for control. " plan provides amechanism for ensuring that the

organization is moving in the right

irection and ma%ing progress towardachieving its goals.


10/35

Costs of

Planning1. anagerial Time

– 'one properl the planning process re$uires a

substantial amount of managerial time and energ.

2. 3elay in 3ecision a+ing

–!lanning can result in delas in decision ma%ingwhich must be weighed against the importance of

speed in response time. of speed in response time


11/35

Weighing the Benets &gainstthe Costs of Planning

%n the final analysis& managers plan because

planning leas to higher performance. (lanningalso helps managers cope with the many

comple4 situations they face.


12/35

For'al planning andorganiational perfor'ance

For'al planning generally results in:

– Higher profts – Higher return on assets

– Improved quality o planning

– ppropriate implementation o the plan


13/35

Criticis's of For'alPlanningFor'al planning may:

!. "reate rigidity

#. $eplace intuition and creativityote: planning should enhance and supportintuition and creativity .

%. &ocus managers' attention on today'scompetition( not on tomorro)'s survival

*. $einorce success( )hich may lead to ailure


14/35

Where *oes Planning +tart?

Which "pproach is etter - Top-'own or

ottom-*p?


15/35

–Top-own planning

the advantage is that the top managers who are the

most %nowledgeable about the firm as a whole drive

the development of the plan

–0 bottom-up approachThe primar advantages is that the people closes to

operating sstems customers and suppliers drive the

development of the plan .


16/35

Planning as a ,ining-echanis'

+oals+oals "ontrol"ontrol,lans,lans

$elationship among goals(plans( and controls


17/35

+etting .oals and*e%eloping Plans

5oals !objectives$ : are desired outcomes

or targets

'ote that :-

The guide manger&s decisions and form

the criteria against which results are

measured .

(lanning 6 5oals 7 (lans


18/35

(lans : are ocuments that outline how

goals are going to be met .

'ote that :-

The usuall include resource allocations

budgets schedules and other necessar

actions to accomplish the goals.


19/35

+teps in goal setting

!. $evie) the organization'smission and employees' key -obtasks.

#. valuate available resources.

%. /etermine the goalsindividually or )ith input rom

others.


20/35

*. 0ake sure goals are )ell1)ritten

and then communicate them toall )ho need to kno).

2. 3uild in eedback mechanisms toassess goal progress.

4. 5ink re)ards to goal attainment.


21/35

+etting .oals

+oals can be set either through aprocess o :

/0 1raditional goal setting20 -anage'ent b# obecti%es

(-B4)


22/35

/0 1raditional goal setting : goals set by topmangers 6o) do)n through the

organization and become sub goals or eachorganizational area


23/35

rence bet!een goals and obec

4becti%es : state )hat is to beaccomplished in singular ( specifc (and measurable terms )ith a targetdate .

.oals : are general target to beaccomplished that are translated into

actionable ob-ectives

ote that :

+oals include ob-ectives ( or goals are


24/35

Characteristics of e5ecti%egoals settings

!. 7pecifc and measurable

#. /efned time rame

%. "over key result area*. "hallenging but realistic

2. 5inked to re)ards


25/35

+0-0&0R010 .oals are6

7pecifc0easurable

ttainable$ealistic

Timely


26/35

1#pes of planning (plans)


27/35

1he 'anagerial

p#ra'id

Planning horion

1op 'anage'ent"hie e8ecutive+eneral managers

+trategic planning! to !9 years

-iddle 'anage'ent&unctional managers

,roduct line/epartment heads

1actical intermediate ; planning

4 months to # years

,o!er 'anage'ent


28/35

1#pes of plans ( fre7uenc# ofuse )

1. Staning (lans

"re designed to deal with organizationalissues or problems that recur fre$uentl.

#tanding plans include policies procedures

and rules


29/35

(olicies - general guidelines that

govern how certain organizational

situations will be addressed.

(roceures - are more specific andare designed to give e+plicit

instructions on how to complete a

recurring tas%. 8ules - provide detailed and specific

guidelines for action.


30/35

2. Single-9se (lans

– developed for handling non repetitive situation. – #ingle-use plans include programs and budgets .

•(rograms , a set of activities that are designedto accomplish an objective over a specific period

of time .

•)ugets , represent the funds allocated tooperate a unit for a fi+ed period of time


31/35


32/35

8dentif# each t#pe of plan b#categories

+tanding plan : a9 polic# b9procedure c9 rule+ingle9use plan : d9progra' e9budget

. ualit is job one ( ford motor compan)

/. !resident john f.%enned0s plan to land someone on

the moon

%. ho) much )ill it cost to operate yourdepartment ne8t month

*. =earing saety glasses )hile touring the

actory2. &orms or leaves o absence must be

approved by the managers andsubmitted to the personnel o>ce one

month in advance o their e?ective


33/35

•Contingency Plans

–Alternative plans to be implemented ifuncontrollable events occur.

–Developing a contingency plan

• What might go wrong in my department?• How can I prevent it from happening?

• If it does occur, what can I do to minimie its effect?


34/35

*ontingency planning : reuires theevelopment of two or more plans& each

of which is base on a ifferent set of

strategic or operating conitions that

coul occur.


35/35

• hen is *ontingency (lanning 'eee#

1ontingenc planning is necessar in

business environments that change rapily

an in unpreictable ways.

1ontingenc planning is useful when a

firm;s effectiveness is epenent on a

particular set of business conitions.

ch3 foundations of planning.pptx

Documents