Management

Stephen P. Robbins Mary Coulter

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Planning

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–1

What Is Planning?
• Planning
 A primary managerial activity that involves:
 Defining the organization’s goals
 Establishing an overall strategy for achieving those goals
 Developing plans for organizational work activities

 Types of planning
 Informal: not written down, short-term focus; specific to an
organizational unit
 Formal: written, specific, and long-term focus, involves
shared goals for the organization

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–2

Why Do We Plan?

• Purposes of Planning

 Sets the purpose or objective

 Provides direction
 Reduces the adverse impact of uncertainty
 Minimizes waste and redundancy
 Sets the standards for controlling/monitoring

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–3

How Do Managers Plan?
• Elements of Planning
 Goals (also Objectives)
 Desired outcomes for individuals, groups, or entire
organizations
 Provide direction and evaluation performance criteria
 Plans
 Documents that outline how goals are to be accomplished
 Describe how resources are to be allocated and establish
activity schedules
What + When = Objective
What + When + How = Plan

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–4

Types of Plans
• Strategic Plans
 Apply to the entire organization.
 Establish the organization’s overall goals.
 Seek to position the organization in terms of its
environment.
 Cover extended periods of time.
• Operational Plans
 Specify the details of how the overall goals are to be
achieved.
 Cover a short time period.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–5

Types of Plans
• Long-Term Plans
 Plans with time frames extending beyond three years
• Short-Term Plans
 Plans with time frames of one year or less
• Specific Plans
 Plans that are clearly defined and leave no room for
interpretation
• Directional Plans
 Flexible plans that set out general guidelines and
provide focus, yet allow discretion in implementation

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–6

Types of Plans
• Single-Use Plan
 A one-time plan specifically designed to meet the
need of a unique situation.
• Standing Plans
 Ongoing plans that provide guidance for activities
performed repeatedly.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–7

 Planning Hierarchy
1. Vision: very very long term, “What do we
want to be?”
•Ability to see things invisible
•Difficult to describe, vague, a dream,
Abstract
2. Mission: Also LT, “What do we have to
do” / “What business/activity we are in”
•Less abstract
.
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 Planning Hierarchy (contd….)

3. Objective: Short term goal, concrete /

Clear, easy to describe, SMART
•S- Specific
•M- Measurable
•A – Agreed (Properly communicated /
shared)
•R- Realistic/ Attainable
•T- Time-bound
7–9
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Establishing Goals and
Developing Plans (cont’d)
• Maintaining the Hierarchy of Goals

Means–Ends Chain
 The integrated network of goals that results from
establishing a clearly-defined hierarchy of
organizational goals.
 Achievement of lower-level goals is the means by
which to reach higher-level goals (ends).

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–10

Establishing Goals and
Developing Plans (cont’d)
• Management By Objectives (MBO)
 Specific performance goals are jointly determined by
employees and managers.
 Progress toward accomplishing goals is periodically
reviewed.
 Rewards are allocated on the basis of progress
towards the goals.
 Key elements of MBO:
 Goal specificity, participative decision making, an explicit
performance/evaluation period, feedback

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–11

Exhibit 7–4 Characteristics of Well-
Designed Goals
• Written in terms of • Challenging yet realistic
outcomes  Low goals and impossible
 Focuses on the ends goals do not motivate.
 High goals motivate if they
can be achieved.
• Measurable and
quantifiable • Written down
 Specifically defines how the  Focuses, defines, and
outcome is to be measured makes goals visible.
and how much is expected. • Communicated to all
• Clear as to time frame involved in implementing
 How long before measuring the goal (Agreed)
accomplishment.  Puts everybody “on the
same page.”
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7–12