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Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-1 Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-2 Define the nature and purpose of planning Classify the types of goals organizations might have and the plans they use Compare and contrast approaches to goal-setting and planning Discuss contemporary issues in planningCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-3 What Is Planning? Planning - a primary managerial activity that involves: Defining the organizations goals Establishing an overall strategy for achieving those goals Developing plans for organizational work activitiesCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-4 Formal Planning Formal planning Specific goals covering a specific time period Written and shared with organizational membersCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-5 Why Do Managers Plan? Purposes of Planning Provides direction Reduces uncertainty Minimizes waste and redundancy Sets the standards for controllingCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-6 Planning and Performance Formal planning is associated with: Higher profits and returns on assets Positive financial results The quality of planning and implementation affects performance more than the extent of planning The external environment can reduce the impact of planning on performanceCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-7 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 schedulesCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-8 Types of Goals Financial Goals - related to the expected internal financial performance of the organization. Strategic Goals - related to the performance of the firm relative to factors in its external environment (e.g., competitors).Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-9 Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-10 Types of Plans Strategic Plans Establish the organizations 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 periodCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-11 Types of Plans Long-Term Plans Time frames extending beyond three years. Short-Term Plans Time frames of one year or less.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-12 Types of Plans 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 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-13 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 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-14 Traditional Goal Setting Broad goals are set at the top of the organization. Goals are then broken into sub-goals for each organizational level. Goals are intended to direct, guide, and constrain from above. Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-15 Exhibit 8-2: The Downsideof Traditional Goal SettingCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-16 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).Maintaining the Hierarchy of GoalsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-17 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.Management By Objectives (MBO)Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-18 Management By Objectives (MBO) Key elements of MBO: goal specificity participative decision making an explicit performance/evaluation period feedbackCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-19 Exhibit 8-3:Steps in a Typical MBO ProgramCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-20 Does MBO Work? Reason for MBO Success Top management commitment and involvement Potential Problems with MBO Programs Are less effective in dynamic environments that require constant resetting of goals Overemphasis on individual accomplishment may create problems with teamwork Allowing the MBO program to become an annual paperwork shuffleCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-21 Exhibit 8-4:Well-Written GoalsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-22 Steps in Goal Setting1. Review the organizations mission statement.Do goals reflect the mission?2. Evaluate available resources.Are resources sufficient to accomplish the mission?3. Determine goals individually or with others.Are goals specific, measurable, and timely?Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-23 Steps in Goal Setting4. Write down the goals and communicate them.Is everybody on the same page?5. Review results and whether goals are being met.What changes are needed in mission, resources, or goals?Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-24 Contingency Factors in Planning Managers level in the organization Strategic plans at higher levels Operational plans at lower levels Degree of environmental uncertainty Stable environment: specific plans Dynamic environment: specific but flexible plansCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-25 Contingency Factors in Planning Length of future commitments Commitment Concept: Current plans affecting future commitments must be sufficiently long-term in order to meet those commitments.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-26 Exhibit 8-5:Planning in the Hierarchy OrganizationsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-27 Approaches to Planning Establishing a formal planning department Create a group of planning specialists that help managers write organizational plans. Planning is a function of management; it should never become the sole responsibility of planners.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-28 Approaches to Planning Involving organizational members in the process Plans are developed by members of organizational units at various levels and then coordinated with other units across the organization.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-29 Criticisms of Planning Planning may create rigidity. Plans cannot be developed for dynamic environments. Formal plans cannot replace intuition and creativity.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-30 Criticisms of Planning Planning focuses managers attention on todays competitionnot tomorrows survival. Formal planning reinforces todays success, which may lead to tomorrows failure. Planning isnt enough.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-31 Planning in Dynamic Environments Develop plans that are specific but flexible. Understand that planning is an ongoing process. Change plans when conditions warrant alterations.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-32 Planning in Dynamic Environments Persistence in planning eventually pays off. Flatten the organizational hierarchy to foster the development of planning skills at all organizational levels.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-33 Terms to Know planning goals plans stated goals real goals framing strategic plans operational plans long-term plans short-term plans specific plans directional plans single-use plan standing plans traditional goal setting means-ends chain management by objectives (MBO) mission commitment concept formal planning departmentCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter2012 Pearson Education, Inc. publishing as Prentice Hall8-34
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