MGT 101 MODULE 7

• Planning

  • Involves defining the organization’s goals, establishing an overall strategy for achieving those goals and developing a comprehensive set of plans to integrate and coordinate organizational work
• Planning

  • Concerned with both ends and means
• Ends = what is to be done
• Means = how it is to be done
• Planning

  • The “Primary Management Function” as it established the basis for all other functions that managers perform
• Importance of Planning

  1. Give the organization legitimacy to its stakeholders
  2. Serve to motivate and increase commitment among employees
  3. Serves as roadmaps or guides to action – towards a targeted outcome
  4. Serve as basis for decision-making and reduces uncertainty of decisions
  5. Provide a set standard of performance or performance criteria
• Goals


  Desired future state that the organization attempts to realize
• Plans


  Blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions
• Approaches to Goal-Setting

  1. Traditional Goal-Setting
  2. Management-by-Objectives
• Traditional Goal-Setting

  • Goals are set at the top of the organization and then broken down into sub-goals for each organizational level
  • Assumes top managers know what is best because they see the big picture
• Traditional Goal-Setting

  • Goals are set and passed down to each succeeding level of org. serve to direct and guide, and in some ways constrain, individual employees’ work behaviors
• Downside of Traditional Goal-Setting

  • Difficult and potentially expensive
  • They lose clarity and unity
• Difficult and potentially expensive

  • Translating corporate goals into departmental, team and, ultimately, individual objectives is difficult and potentially expensive, particularly for large global corporations
• They lose clarity and unity


  as goals make their way down from the top of the organization to the lower
• Management-by-Objectives 


  Specific performance goals are jointly determined by employees and their managers, progress towards accomplishing these goals is periodically reviewed, and rewards are allocated on the basis of this progress
• Four Elements of Management-by-Objectives

  1. Goal specificity
  2. Participate decision making
  3. An explicit time-period
  4. Performance feedback
• Characteristics of a Well-Defined Goal

  1. SMART
  2. FAST
• SMART

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-Bound
• FAST

  • Frequent
  • Ambitious
  • Specific
  • Transparent
• Types of Plans

  1. Breadth (Strategic and Operational)
  2. Time Frame (Long Term and Short Term)
  3. Specificity (Directional and Specific)
  4. Frequency of Use (Single-use and Standing)
• Breadth - Strategic Plans

  • Apply to the entire organization
  • Establish the organization’s goals and seek to position the organization in terms of its environment
• Breadth - Operational Plans

  • Developed at the lower levels of the org
  • Department manager’s tools for daily and weekly operations
• Time Frame - Long-Term

  • Beyond 3 years
• Time Frame - Short-Term

  • One year or less
• Specificity - Directional

  • Flexible plans that set out general guidelines
• Specificity - Specific

  • Clearly defined
  • No room for interpretation
  • Have specifically stated objectives or goals
• Frequency of Use - Single-Use

  • Achieve objectives that are not likely to be repeated in the future
  • Examples: building a new headquarters
• Frequency of Use - Standing

  • Used to provide guidance for tasks that are performed repeatedly
  • Examples: Policies and rules
• Levels in the Organization

  1. Level of Environmental Uncertainty
  2. Length of Future Commitments
• Level of Environmental Uncertainty

  • High EU = plans should be flexible
  • Managers must be prepared to rework and amend plans as they are implemented
• Length of Future Commitments

  • More that current plans affect future commitments = the longer the time frame for which managers should plan
• Contemporary Considerations/Issues in Planning

  1. Criticism in planning
  2. Plans cannot be developed for dynamic environment
  3. Formal plans cannot replace intuition and creativity
  4. Planning focuses manager’s attention on today’s competition, not on tomorrow’s survival
  5. Formal planning reinforces success which may lead to failure
  6. Just planning is not enough
• Strategic Management


  Set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals
• Strategic Management


  Managers should establish the “game plan or road map”
• Strategic Planning Framework: VMV-OKraPiSPATRes
• • V = Vision
  • M = Mission
  • V = Values
  • O = Objectives
  • Kra = Key Result Area
  • Pi = Performance Indicators
  • S = Strategies
  • P = Programs
  • A = Activities
  • T = Tasks
  • Res = Resources
• Vision - Ideal situation of the organization
• Mission - Reason for existence of the organization
• Values - Guiding principles
• Objectives (or Goals) - Measurable end results that approximates the mission and vision