planning for graduate students bba classes.ppt

planning chapter ppt

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Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 8-1
Chapter (7) Foundations of Planning

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Publishing as Prentice Hall
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Define the nature and purposes of planning.
Classify the types of goals organizations
might have and the plans they use.
Compare and contrast approaches to goal-
setting and planning.
Discuss contemporary issues in planning.

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What Is Planning?
•Planning -defining the organization’s
goals, establishing strategies for achieving
those goals, and developing plans to
integrate and coordinate work activities.
•Formal planning
–Specific goals covering a specific time period
–These goals are: Written and shared with
organizational members.
–Specific plans exist for achieving these goals.

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Why Do Managers Plan?
•Four reasons for planning
–Provides direction
–Reduces uncertainty
–Minimizes waste and redundancy
–Sets the standards for controlling

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Planning and Performance
•Formal planning is associated with:
–Positive financial results -higher profits,
higher return on assets, and so forth
–The quality of planning and implementation
affects performance more than the extent of
planning
–The external environment can reduce the
impact of planning on performance
–The planning-performance relationship seems
to be influenced by the planning time frame

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Goals and Plans
•Goals (objectives) -desired
outcomes or targets
•Plans -documents that outline how
goals are going to be met

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Types of Plans
•The most popular ways to describe
organizational plans are breadth (strategic
versus operational), time frame (short
term versus long term), specificity
(directional versus specific), and frequency
of use (single use versus standing).
•As Exhibit 7-1 shows page 163

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Exhibit 7-1
Types of Plans

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Types of Plans
•Strategic plans -plans that apply to the
entire organization and establish the
organization’s overall goals
•Operational plans -plans that
encompass a particular operational area of
the organization

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Types of Plans (cont.)
•Long-term plans -plans with a time frame
beyond three years
•Short-term plans -plans covering one year or
less
•Specific plans –plans that are clearly defined
and leave no room for interpretation
•Directional plans -plans that are flexible and
set out general guidelines

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Types of Plans (cont.)
•Single-use plan -a one-time plan
specifically designed to meet the needs of
a unique situation
•Standing plans ongoing plans that
provide guidance for activities performed
repeatedly

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Approaches to Setting Goals and
developing plans:
a) Traditional goal-setting -an approach to
setting goals in which top managers set goals
then flow down through the organization and
become subgoals for each organizational area
•Means-ends chain -an integrated network of
goals in which the accomplishment of goals at
one level serves as the means for achieving the
goals, or ends, at the next level

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•A problem with traditional goal-setting is that when top
managers define the organization’s goals in broad
terms—such as achieving “sufficient” profits or
increasing “market leadership”—these ambiguous goals
have to be made more specific as they flow down
through the organization. Managers at each level define
the goals and apply their own interpretations and biases
as they make them more specific.
•However, what often happens is that clarity is lost as the
goals make their way down from the top of the
organization to lower levels. Exhibit 7-2 page 165
illustrates what can happen.

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Exhibit 7-2
The Downside of Traditional Goal-Setting

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Approaches to Setting Goals (cont.)
b) Management by objectives (MBO) -
a process of setting mutually agreed upon
goals and using those goals to evaluate
employee performance

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•MBO programs have four elements: goal
specificity, participative decision making,
an explicit time period, and performance
feedback.
•Instead of using goals to make sure
employees are doing what they’re
supposed to be doing, MBO uses goals to
motivate them as well. The appeal is that it
focuses on employees working to
accomplish goals they’ve had a hand in
setting.
•Exhibit 7-3 page 166 lists the steps in

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Exhibit 7-3 Steps in MBO

18. What is Strategic Planning?
•Strategic Planning determines where an organization is going over the next year or
more, how it is going to get there and how it will know if it achieved its goals.
•Strategic planning serves a variety of purposes in organization, including to:
–Clearly define the purpose of the organization and to establish realistic goals
and objectives consistent with that mission in a defined time frame within the
organization’s capacity for implementation.
–Communicate those goals and objectives to the organization’s constituents.
–Develop a sense of ownership of the plan.
–Ensure the most effective use is made of the organization’s resources by
focusing the resources on the key priorities.
–Provide a base from which progress can be measured and establish a
mechanism for informed change when needed.
–Bring together of everyone’s best and most reasoned efforts have important
value in building a consensus about where an organization is going.
–Provides clearer focus of organization, producing more efficiency and
effectiveness
–Bridges staff and board of directors (in the case of corporations)
–Builds strong teams in the board and the staff (in the case of corporations)
–Provides the glue that keeps the board together (in the case of corporations)
–Produces great satisfaction among planners around a common vision
–Increases productivity from increased efficiency and effectiveness
–Solves major problems

19. Vision, Mission & Values
•Developing a Vision Statement
–The vision statement includes vivid description of the organization as it effectively carries out
its operations.
–Developing the vision can be the most enjoyable part of planning, but the part where time
easily gets away from you.
–the vision has become more of a motivational tool, too often including highly idealistic
phrasing and activities which the organization cannot realistically aspire.
•Developing a Mission Statement
–The mission statement describes the overall purpose of the organization.
–When wording the mission statement, consider the organization's products, services,
markets, values, and concern for public image, and maybe priorities of activities for survival.
–Consider any changes that may be needed in wording of the mission statement because of
any new suggested strategies during a recent strategic planning process.
–Ensure that wording of the mission is to the extent that management and employees can
infer some order of priorities in how products and services are delivered.
–When refining the mission, a useful exercise is to add or delete a word from the mission to
realize the change in scope of the mission statement and assess how concise is its wording.
–Does the mission statement include sufficient description that the statement clearly
separates the mission of the organization from other organizations?
•Developing a Values Statement
–Values represent the core priorities in the organization’s culture, including what drives
members’ priorities and how they truly act in the organization, etc. Values are increasingly
important in strategic planning.
–Establish four to six core values from which the organization would like to operate. Consider
values of customers, shareholders, employees and the community.

20. SWOT Analysis
Strengths
-internal to entity
-Resources and capabilities that can be
used to develop a competitive advantage
Weaknesses
-Internal to entity
-Absence of certain strengths
Opportunities
-External to entity
-External analysis may reveal new
opportunities for growth
Threats
-External to entity
-Changes in the environment that present
a threat or loss