Planning

Module 4
LIS 580: Spring, 2006
Instructor- Michael Crandall

Roadmap

Purpose of planning
The planning process
Setting objectives
Building planning premises
Developing plans
Types of plans
Planning pitfalls

April 6, 2006

LIS580- Spring 2006

Purpose of Planning
Set the standards
to facilitate control

Provide
direction

Manager
s engage
in
planning
to:
Minimize waste and
redundancy

Reduce the
impact of change

Prentice Hall, 2002

April 6, 2006

LIS580- Spring 2006

Elements Of Planning
Plan
A method for doing or making something,
consisting of at least one goal and a predefined
course of action for achieving that goal.

Goal
A specific result to be achieved; the end result
of a plan.

Objectives
Specific results toward which effort is directed.

G.Dessler, 2003

April 6, 2006

LIS580- Spring 2006

Elements Of Planning (contd)

Planning
The process of setting goals and courses of action,
developing rules and procedures, and forecasting
future outcomes.

What Planning Entails

Choosing goals and courses of action and deciding
now what to do in the future to achieve those
goals.
Assessing today the consequences of various
future courses of action.
G.Dessler, 2003

April 6, 2006

LIS580- Spring 2006

What Planning Accomplishes

Allows decisions to be made ahead of time.

Permits anticipation of consequences.
Provides direction and a sense of purpose.
Provides a unifying framework; avoiding
piecemeal decision making.
Helps identify threats and opportunities and
reduces risks.
Facilitates managerial control through the
setting of standards for monitoring and
measuring performance.
G.Dessler, 2003

April 6, 2006

LIS580- Spring 2006

The Management Planning

Process
Hierarchy of Plans
A set of plans that includes the company-wide plan
and the derivative plans of subsidiary units
required to help achieve the enterprise-wide plan.
Top management approves a long-term plan; and
each department creates its own budgets

The Planning Hierarchy

Top management formulates its plans based on
upward feedback from the departments, and the
departments in turn draft plans that make sense in
terms of top managements plan.
G.Dessler, 2003

April 6, 2006

LIS580- Spring 2006

Hierarchy of Goals

FIGURE 41
G.Dessler, 2003

April 6, 2006

LIS580- Spring 2006

Who Does the Planning?

Small businesses:
Entrepreneurs do most of the planning.

Large firms:
Traditional:
A central corporate planning group works with
top management and each division to solicit,
challenge, and refine the companys plan.

Current:
Planning is decentralized and includes the firms
product and divisional managers, aided by small
headquarters advisory groups.
G.Dessler, 2003

April 6, 2006

LIS580- Spring 2006

Checklist 4.1
How to Develop a Plan
Set an objective.
Develop forecasts and planning
premises.
Determine your options. The decisionmaking process
Evaluate alternatives.
Choose your plan, and start to
implement it.
Go to Level 2.

G.Dessler, 2003

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Setting Objectives

G.Dessler, 2003

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Checklist 4.2
Principles of Goal-Setting

Set SMART goalsmake them specific,

measurable, attainable, relevant, and
timely. Choose areas (sales revenue, costs,
and so forth) that are relevant and
complete.
Assign specific goals.
Assign measurable goals.
Assign doable but challenging goals.
Encourage participation.
Use executive assignment action plans, or
management by objectives.
G.Dessler, 2003

April 6, 2006

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Forecasts and Planning Premises

Forecasting is used to predict future requirements and
opportunities
Determines the premises on which planning is based
Can be quantitative (e.g., a time series) or qualitative (e.g.,
jury of executive opinion)

Marketing research
Competitive intelligence
Helps build the picture of what others are doing to inform the
planning process

Next step is the decision-making process we talked

about yesterday
Finally, you begin to build your plans (usually more
than one to realize objectives)
April 6, 2006

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The Business Plan And Its

Components
Description of the business (including
ownership and products or services)
Marketing plan
Financial plan
Management
and/or personnel plan.

G.Dessler, 2003

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Outline of a Marketing Plan

Source:
Adapted from
Philip Kotler and
Gary Armstrong,
Principles of
Marketing (Upper
Saddle River,
NJ: Prentice Hall,
2001), p. 70.

FIGURE 43
G.Dessler, 2003

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Acmes Potential Market Segments

FIGURE 44

Source: Business Plan Pro, Palo Alto Software, Palo Alto, CA.

April 6, 2006

G.Dessler, 2003

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Product, Pricing, and Sales Forecasts

FIGURE 45
G.Dessler, 2003

Source: Business Plan Pro, Palo Alto Software, Palo Alto, CA.

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Personnel Plan

Source: Business Plan Pro, Palo Alto Software, Palo Alto, CA.

FIGURE 46
G.Dessler, 2003

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Sales Forecast by Service: Two-Month

Sales Plan for Acme Consulting, 2003

FIGURE 47
G.Dessler, 2003

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Gantt Scheduling Chart for Acme

Strategic Report Projects, Jan 115, 2003

FIGURE 48
G.Dessler, 2003

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Acme Consulting Profit and Loss

Source: Business Plan

Pro, Palo Alto Software,
Palo Alto, CA.

April 6, 2006

FIGURE 49
G.Dessler, 2003

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G.Dessler, 2003

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G.Dessler, 2003

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Types of Plans
Type of
Plan

Time
Frame

Specificity

Frequency
of Use

Strategic

Long Term

Directional

Single Use

Tactical

Short Term

Specific

Standing

Operational

Ongoing

Very
detailed

Day-to-day

Policies,
procedures,
and rules

Varies

Varies

Varies
G Dessler, 2003

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Reporting Improper Behavior

Source:
James Jenks,
The Hiring,
Firing (and
everything in
between)
Personnel
Forms Book
(Ridgefield,
CT: Round
Lake
Publishing,
1996), pp.
22425.

April 6, 2006

FIGURE 410
G.Dessler, 2003

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Pitfalls of Planning
Planning may create rigidity
Plans cannot be developed for a dynamic
environment
Formal plans cannot replace intuition and
creativity
Planning focuses managers attention on
todays competition, not tomorrows survival
Formal planning reinforces success, which
may lead to failure
Prentice Hall, 2002

April 6, 2006

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Elmer L. Anderson Library

What did the planners do right in this effort?
Was the design a result of research or
creativity?
How was the planning process affected by
stakeholder needs?
How much of the planning was related to
political activities and how much to actual
construction activity?
How was success measured for the project?
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Extreme Chaos
Better project success rates due to
lower costs and smaller projects
Difficulty of estimating costs and
schedules accurately
Often tripled up front to avoid failure
Old metrics not appropriate to modern
methods
Difficult to establish benchmarks

Different skills for different roles

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Project Success Factors

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