Part4 mgmt.ppt

Chapter Five

Planning: The Foundation of

Successful Management

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Planning

Planning: previously defined as setting goals and deciding how to achieve them—another definition: Planning is coping with uncertainty by formulating future courses of action to achieve specified results.

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Why not plan?

Planning requires you to set aside time to do it

- Most managers busy with their works so it’s difficult for them to set a free time.

- Need a lot of procedures such as managers have to go outside to find out more information about products, market and competitor.

You may have to make some decisions without a lot of time to plan

- Suddenly consumer boycott your products.- An important supplier may let you down.- So you may not have the time to make a decision.

The Benefits of Planning1) Planning helps you check on your progress

- Planning shows how well your work is going in an organization.

- You need to have some expectations of what you’re supposed to do.

2) Planning helps you coordinate activities

- The organization should have a plan for dealing with the media during emergencies.

- A plan defines the responsibilities of various departments and coordinates their activities to achieve common goals.

3) Planning helps you think ahead

- At some point the service or product will probably reach maturity and sales will begin to reduce. So at that time you have to think something new.

- So plan will helps you to be ahead compare with your competitors.

4) Above all, planning helps you cope with uncertainty

Three Types of Uncertainty

State Uncertainty: when the environment is considered unpredictable.“What possible harmful event could occur?”

Effect Uncertainty: when the effects of environmental changes are unpredictable. “What possible harmful effect might an environmental change have?”

Response Uncertainty: when the consequences of a decision are uncertain. ”What possible harmful consequence might a decision have?”

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Responding to Uncertainty with 4 basic strategy types

Defenders: are expert at producing and selling narrowly defined products and services.

Analyzers: let the organizations take the risks of product development and marketing and then imitate what seems to work best.

Prospectors: focus on developing new markets or services and in seeking out new markets rather than waiting for things to happen.

Reactors: make adjustments only when finally forced to by environmental pressures.

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Panel 5.1

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Making Plans

Mission Statement “What is our reason for being?”

Vision Statement “What do we want to become?”

Strategic Planning Done by top managers for the next 1-5 years

Goals

Action plans

Tactical Planning Done by middle managers for the next 6-24 months

Goals

Action plans

Operat-ional Planning Done by first-line managers for the next 1-52 weeks

Goals

Action plans

Mission & Vision Statements

Mission Statements: expresses the purpose of the organization.“What is our reason for being?”

Vision Statement: expresses what the organization should become, where it wants to go strategically.“What do we want to become?”

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Types of Planning

Strategic planning: top managers decide what the organization’s long-term goals should be for the next 1-5 years with the resources they expect to have available.

Tactical planning: middle managers decide what contributions their departments or similar work units can make with their given resources during the next 6-24 months.

Operational planning: first-line managers determine how to accomplish specific tasks with available resources within the next 1-52 weeks.

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Panel 5.2

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Three Levels of Management, Three Types of Planning

Top Managers:Chief executive officer,

president, vice presidentgeneral managers,

division heads

Middle Managers:Functional managers,

product-line managers,department managers

First-line Managers:Unit manager, team leaders,

first-line supervisors

Strategic Planning

1-5 Years

Tactical Planning

6-24 Months

Operational Planning

1-52 Weeks

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Types of Goals

Strategic Goals: are set by and for top management and focus on objectives for the organization as a whole.

Tactical Goals: are set by and for middle managers and focus on the actions needed to achieve strategic goals.

Operational Goals: are set by and for first-line managers and are concerned with short-tem matters associated with realizing tactical goals.

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Setting SMART Goals

S pecific

easurable

ttainable

esults-Oriented

arget Dates

M

A

R

T

SMART• Specific—goals should be stated in specific

rather than unclear terms.• Measurable—whenever possible, goals should

be measurable or can calculate.• Attainable—goals should be challenging, but

realistic and attainable.• Results-Oriented—only a few goals be chosen

and they should be results-oriented. Refer page 157 (3rd edition )

• Target Dates—goals should specify the target dates or deadline dates when they are to be attained.

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Panel 5.4

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The Planning Control Cycle

The Two Planning Steps

The Two Control Steps

Make the Plan Carry out the plan

Control the direction in two ways:

(a) By correcting deviations in the plan being carried out (return to Step 2) or

(b) By improving future plans (go to Step 1 to start over

Control the direction in by comparing the results with the plan

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Management By Objectives

Peter Drucker

Is a four-step process in which: Managers and employees jointly set

objectives for the employee Managers develop action plans Managers and employees

periodically review the employee’s performance

The manager makes a performance appraisal and rewards the employee according to the results

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Panel 5.5

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Three Types of Objectives Used in MBO

Improvement objective: Increase sport utility sales by 10%

Personal development objective: attend five days of leadership training

Maintenance by objectives: continue to meet the increased sales goals specified last quarter

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Cascading Objectives: MBO from the Top Down

1) The commitment of top management is essential

2) It must be applied organization wide3) Objectives must “cascade”

THE IMPORTANCE OF PROJECT DEADLINES

• Deadlines are an essential component in the project planning process

• Deadlines help keep managers on track