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Planning in Organizations
Why supervisors and managers plan:Knowing what the organization is trying to accomplish helps
them set priorities and make decisions aimed at accomplishing their goals.
Planning forces managers to spend time focusing on the future and establishes a fair way for evaluating performance.
Planning helps managers use resources efficiently.The functions that managers perform all depend on good
planning.Supervisors rarely have much input into the way an
organization does its planning; they participate in whatever process already exists.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-1
Objectives
Planning centers on the setting of goals and objectives.Objectives specify the desired
accomplishments of the organization as a whole or as a part of it.
Goals are objectives with a broad focus.
An organization’s goals identify what its people should be striving toward.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-2
Characteristics of Effective Objectives
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-3
Policies, Procedures, and Rules
PoliciesBroad guidelines for how to act
ProceduresSteps that must be complete to achieve a
specific purposeRules
Specific statements of what to do or not do in a given situation
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-4
Action Plans
The supervisor creates an action plan by answering the following questions:What actions need to be taken?Who will take the necessary steps?When must each step be completed?Where will the work take place?How will the work be done?
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-5
Contingency Planning
Review all objectivesLook for areas where
something might go wrongDetermine how to respond
if those problems do arise
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-6
Contingency planning
Planning what to do if the original plans don’t work out. Does not have to be formal or written down.
Management by Objectives
1. All individuals in the organization work with their managers to set objectives, specifying what they are to do in the next operating period.
2. Each individual’s manager periodically reviews the individual’s performance to whether he or she is meeting the objectives.
3. The organization rewards the individuals based on how close they come to fulfilling the objectives.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-7
Management by Objective (MBO) involves three steps:
The Supervisor as a Planner
In most organizations, supervisors are responsible for the creation of plans that specify:GoalsTasksResourcesResponsibilities
Providing information and estimatesHigher management relies on supervisors to provide
estimates of the personnel and other resources they will need to accomplish their work.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-8
Allocating Resources
Allocating human resourcesDetermining how many and what kind of employees
the department will needAllocating equipment resources
Determining how much equipment is needed to get the job done
Allocating money resourcesDeveloping a budget
SchedulingGantt chartsPERT networks
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-9
Involving Employees
Employees who are involved in the process tend to feel more committed to the objectives, and they may be able to introduce ideas that the supervisor has not considered.
To get employees involved:Set objectives and have employees write down what
they think they can accomplish in the coming year.Hold a meeting of the entire work group at which
employees and supervisors develop objectives as a group.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-10
Planning with a Team and Updating Objectives
Many times teams, not individual managers, are charged with planning.Supervisors should clearly communicate the scope
of the plan and encourage team members to cooperateAfter objectives have been set, the supervisor should
monitor performance and compare it with the objectives and update objectives as necessary.Organizations with a regular procedure for planning will
specify when supervisors must review and update their objectives.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-11
The Supervisor as a Controller
Supervisors need to know what is going on in the area they supervise.Do employees understand what they are
supposed to do, and can they do it?Is all equipment operating properly?Is work getting out correctly and on time?
Detection of problems is at the heart of the control function.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-12
The Process of Controlling
Establish performance standardsEffective performance standards should be written,
measurable, clear, specific, and challenging but achievable.
Monitor performance and compare with standardsThe supervisor should focus on how actual
performance compares with the standards he or she has set.VarianceException principle
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The Process of Controlling (continued)
Reinforce successes and fix problemsIf performance is satisfactory or better,
the supervisor needs to encourage this.If performance is unacceptable, the
supervisor needs to make changes that either improve performance or adjust the standard.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-14
Types of Control
Feedback controlControl that focuses on past performance
Concurrent controlRefers to work that is being done
PrecontrolRefers to efforts aimed at preventing
behavior that may lead to undesirable results
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Tools for Control
BudgetsA plan for spending money
Performance reportsSummarize performance and compare it
with performance standardsPersonal observation
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Characteristics of Effective Controls
TimelinessTimely controls enable the supervisor to correct
problems in time to improve resultsCost-effectiveness
The cost of using the controls should be less than the benefit derived from using them
AcceptabilityThe controls should be acceptable to supervisors and
employeesFlexibility
Supervisors should be able to ignore a variance if doing so is in the best interest of the organization
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.6-17