INTRODUCTION TO MANAGEMENT

Chapter 7: Planning and tools

CHE KU HARIZ BIN CHE KU AMRAN
18186
MOHAMED HAZSRIM BIN NAZER MOHAMED
18356
AZRIE BIN KINAN
17966
RADHI BIN RAZMANI
18142
MUHAMMAD SAFIQ SAFWAN HADY BIN SUHARDI
18369
ARIF TAJUL
MOHAMAD ISMAIL BIN MOHAMAD ISMOL

II. GENERAL CHARACTERISTICS OF PLANNING

RADHI
A. Definition Of Planning:
Planning is the process of determining how the organization can
get where it wants to go, and what it will do to accomplish its
objectives.
B.
Purposes Of Planning:
1. According to C.W. Roney, there are two purposesprotective and
affirmative:
a. The protective purpose is to minimize risk by reducing
uncertainties
surrounding business conditions and by clarifying the consequences
of related management action.
b. The affirmative purpose is to increase the degree of organizational
success.
2. Another purpose is to establish a coordinated effort within the
organization.

C. Planning: Advantages and Potential Disadvantages

RADHI
1. Advantages:
a. Future-oriented
b. Decision coordination
c. Emphasis on organizational objectives
2. Potential disadvantage:
a. An overemphasized planning program can take up too much
managerial time.
b. Managers must strike an appropriate balance between time spent
planning and time spent on organizing, influencing, and controlling.
D. Primacy of Planning
1. Planning is the function that precedes and is the foundation
for the organizing, influencing, and controlling functions of
managers.

ISMAIL
III. STEPS IN THE PLANNING PROCESS
A. State organizational objectives.
B. List alternative ways of reaching objectives.
C. Develop premises on which to base each alternative.
D. Choose the best alternative for reaching objectives.
E. Develop plans to pursue the chosen alternative.
F. Put the plans into action.
IV. THE PLANNING SUBSYSTEM
A. Once managers understand the basics of planning, they can
transform t he plans into appropriate action.
B. One way of approaching this implementation is to view planning
activities as an organizational subsystem.
C. A subsystem is a system created as part of the process of the
overall management system. (See Figure 7.3)

V. ORGANIZATIONAL OBJECTIVES: PLANNINGS FOUNDATION

ISMAIL
A. Defining Organizational Objectives
1. Organizational objectives are the targets toward which the open
management system is directed. They flow from organizational
purpose or mission.
2. Organizational purpose is what the organization exists to do, given a
particular group of customers and customer needs.
3. If an organization is accomplishing its objectives, it is accomplishing
its purpose and thereby justifying its reason for existence.
4. Table 7.1 contains several statements of organizational purpose, or
mission, as developed by actual companies.
5. John F. Mee summarizes three major business objectives:
a. Profit is the motivating force for managers
b. Service to customers by the provision of desired economic
values (goods and services) justifies the existence of the
business Managers have social responsibilities in accordance
with the
ethical and moral codes of the society in which the
business
operates.

VI. AREAS FOR ORGANIZATIONAL OBJECTIVES

AZRIE
A. Managers should strive to develop and attain a variety of objectives in
management system areas where activity is critical to the operation and
success
of the system.
B. Peter Drucker identifies eight key management system objectives:
1. Market standing
2. Innovation
3. Productivity
4. Physical and financial resources
5. Profitability
6. Managerial performance and development
7. Worker performance and attitude
8. Public responsibility
C. Example of management in the world: ConocoPhillips

1. ConocoPhilipps recently indicated that it plans to sell $10 billion in

assets over a two-year period. The plan is for the company to use the
proceeds to pare down debt and increase shareholder value.

VII. WORKING WITH ORGANIZATIONAL OBJECTIVES

A. In general, an organization should have:
SAFIQ
1. Short-term objectivestargets to be achieved in a year or less
2. Intermediate-term objectivestargets to be achieved in one to
five years.
3. Long-term objectivestargets to be achieved in five to seven
years.
B. The principle of the objective is that before managers initiate any action
organizational objectives should be clearly determined, understood, and
stated.
C. Developing a Hierarchy of Objectives
1.The hierarchy of objectives are the overall organizational
objectives and the sub-objectives assigned to the various people or
units of the organization. (Figure 7.6 presents a sample hierarchy of
objectives)
2. Suboptimization is a condition wherein organizational objectives
are conflicting or not directly aimed at accomplishing organizational
objectives.

HAZSRI
D. Guidelines for Establishing Quality Objectives
M
1. Managers should let the people responsible for attaining the
objectives have a voice in setting them.
2. Managers should state objectives as specifically as possible.
3. Managers should relate objectives to specific actions
whenever necessary.
4. Managers should pinpoint expected results.
5. Managers should set goals high enough that employees will
have to
strive to meet them but not so high that employees give
up trying to meet them.
6. Managers should specify when goals are expected to be
achieved.
7. Managers should set objectives only in relation to other
organizational objectives.
8. Managers should state objectives clearly and simply.

VIII. MANAGEMENT BY OBJECTIVES (MBO)

HAZSRI
A. Management by objectives (MBO) is a management approach
M that
uses
organizational objectives as the primary means by which to manage
organizations.
B. Three major characteristics of the MBO strategy are:
1. All individuals within an organization are assigned a specialized
set of
objectives.
2. Performance reviews are conducted periodically.
3. Rewards are given on the basis of how close they come to
reaching
their goals.
C. The Five Steps in the MBO Process include:
1. Review organizational objectives
2. Set worker objectives
3. Monitor progress
4. Evaluate performance
5. Give rewards

HARIZ
E. MBO Programs: Advantages and Disadvantages
1. Two advantages are:
a. MBO programs continually emphasize what should be
done in an organization to achieve organizational goals.
b. The MBO process secures employee commitment to
attaining organizational goals.
2. Two disadvantages are:
a. Because organization members develop objectives
together, they actually have less time in which to do their
work.
b. Elaborate written goals, careful communication of goals,
and detailed performance evaluations naturally increase the
volume of paperwork in an organization.

IX. PLANNING AND THE CHIEF EXECUTIVE

A. CEOs perform many different roles:
HARIZ
1. Figurehead
2. Leader
3. Liaison
4. Monitor
5. Disturbance handler
6. Resource allocator
7. Final responsibility for organizational planning
B. Final Responsibility
1. CEOs seek answers to broad questions:
a. In what direction should the organization be going?
b. In what direction is the organization going now?
c. Should something be done to change this direction?
d. Is the organization continuing in an appropriate direction?
C. Planning Assistance
1. Because top managers have many time-consuming duties,
many are relying on planning assistants for planning advice.

X. THE PLANNER
A. Perhaps the most important input in the planning subsystem is the planner.ARIF +
B. Qualifications of Planners
CONCLUSION
1. Considerable practical experience within their organization
2. Ability to replace narrow view of organizations with ability to see
organization as a whole.
3. Some knowledge of and interest in the social, political, technical and
economic trends that affect the future of an organization
4. Ability to work well with others
C. Evaluation of Planners
1. Key assessment factors include:
a. Use of appropriate techniques
b. Degree of objectivity displayed
2. Malik suggests the following eight guidelines:
a. Organizational plans are in writing.
b. The plan is the result of all elements of the management
team working together.
c. The plan defines present and possible future businesses of
the organization.
d. The plan specifically mentions organizational objectives.
e. The plan includes future opportunities and suggestions on
how to take advantage of them.
f. The plan emphasizes both internal and external