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Management
Foundations
Of
Planning
After Studying “FOUNDATION OF PLANNING” students will be able
to:
□ Define planning.
□ Explore why planning is important.
□ Contrast approaches to goal setting and planning.
□ Set goals according to SMART criteria.
□ Analyze and conduct the SWOT analysis.
□ Describe the vital role played by strategy implementation in
determining managers ability to achieve an organization’s mission
and goals.
□ Assess importance of scenario planning.
□ Design personal professional development plan.
□ Develop plan by giving their own idea of any event and present
their idea through plan.
•Planning
□ Purposes of Planning
■ Provides direction
■ Reduces uncertainty
■ Minimizes waste and redundancy
■ Sets the standards for controlling
Elements of Planning
□ Financial Goals
■ Are related to the expected internal financial performance of the
organization.
□ Strategic Goals
■ Are related to the performance of the firm relative to factors in its
external environment (e.g., competitors).
□ Stated Goals versus Real Goals
■ Broadly-worded official statements of the organization (intended
for public consumption) that may be irrelevant to its real goals
(what actually goes on in the organization).
Types of Plans
•Planning
Process
Planning Process
i. Goal setting
ii. Forecasting
iii. Strategy formation
iv. Setting specific standards
v. Continual review & revision
•1-Goal Setting
•MBO
Traditional goal setting
An approach in which goals are set at the top level of an
organization and then broken-down into sub goals for each
level of the organization.
■ Broad goals are set at the top of the organization.
■ Goals are then broken into sub-goals for each
organizational level.
■ Assumes that top management knows best because they
can see the “big picture.”
■ Goals are intended to direct, guide, and constrain from
above.
■ Goals lose clarity and focus as lower-level managers
attempt to interpret and define the goals for their areas of
responsibility.
The Downside of Traditional Goal Setting
Management By Objective
SMART
SMART
S Specific
(in terms of outcomes)
M Measurable
(Quantifiable)
A Action oriented
(Contains plan of action)
R Realistic
(Not too small, nor too big)
T Time Bound
d. Write down and communicate the goals
Predictions of outcomes
Types
□ Quantitative Forecasting
■ Forecasting that applies a set of mathematical rules to a
series of past data to predict outcomes
□ Qualitative Forecasting
■ Forecasting that uses the judgment and opinions of
knowledgeable individuals to predict outcomes.
Developing Plans
□ Contingency Factors in A Manager’s Planning
■ Manager’s level in the organization
□ Strategic plans at higher levels
□ Operational plans at lower levels.
•3-Strategy Formulation
•Strategy
Focused
Business level Low cost Differentiation Focused low cost differentiation
strategy strategy strategy strategy
plan