Professional Documents
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TABLE OF CONTENTS
I. INTRODUCTION ………………………………………….……………………. 3
III. A DILEMMA…………………………………………………….………………… 4
XI. QUIZ…………………………………………………………………………………. 13
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I. INTRODUCTION
Planning is the process of deciding what objectives to pursue during a future time
period and what to do to achieve those objectives. Every plan is divided into two major
segments: 1. Setting Objectives and 2. Determining the course of action to be used in
achieving those objectives. Planning is the management function that produces and
integrates objectives, strategies, and policies.
Planning answers three questions; where are we now? where do we want to be? how
can we get there from here? The first question calls for an assessment of the present
situation. The second question involves determining the desired objectives. And the final
question requires an outline of actions and an analysis of the financial impact on those
actions. Planning is concerned with future implications of current decisions and not with
decisions to be made in the future
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III. A DILEMMA
Planning is easiest where environmental change is least. Planning is most useful
where environmental change is greatest. There is a dilemma presented by Thomas J. Peters
and Robert H. Waterman Jr. in their book, In Search for Excellence.
All types of planning, including strategic, have lately entered the vicious circle. Decisions are becoming
more difficult; so it is necessary to spend longer on planning. If one spends longer in planning, one must
plan further ahead. If one plans further ahead, it means making forecast into the future. The further
ahead one forecasts, the greater the level of uncertainty. The greater the level of uncertainty, the more
difficult the decision – and so back to the start of vicious circle of spending longer on the planning,
planning still further ahead with still more errors in the forecast, and so on.
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Fig. 2
Plans are often classified by function or use. The most frequently encountered types
of functional plans are sales and marketing plans, production plans, financial plans, and
personnel plans.
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Strategic planning – covers a relatively long period of time and affects many parts of
the organization.
no
Yes
Yes
no no
Yes
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Practicing strategic management does not ensure that an organization will meet all
changes successfully – but it does increase the odds.
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X. CASE STUDY
Title: “Planning by a Student”
Susan Good is a senior majoring in management at the local university. She has
been an excellent student with a 3.4 out of a 4.0 grade point average. However, she
really hasn’t decided on what she wants to do. Her interviews for jobs through the
university placement office have confused her even more. Each interview had asked
her on what she wanted to do, and she really had no adequate answer. Because of her
dilemma, Susan went to see Professor Chapman, one of her management profe ssors,
and discussed the problem with him. His reply was, “your problem is not all that
unusual. Many students feel the same way. Why don’t you use some of the planning
concepts you have learned in management and develop a personal career plan?”
Questions
Yes, at any type of plan making the general planning concepts can be applied
even in personal decisions in life. This is also a great way to practice your planning
skills and habits before entering in the work place because you cannot simply make
decisions for others if you cannot make decisions for yourself.
Johnny spent his first year in APD assisting on various project assignments. Then he
was put in charge of a special project to research a chemically processed wood for specialty
applications. During the initial stages of the project, Johnny spent the majority of his time in
the laboratory, becoming familiar with the basic aspects of the treatment process. However,
he soon became tired of the long and tedious experimental work and became more and
more anxious to move quickly into the promotion and marketing of the product. This desire
was soon realized. An article in a national trade publication generated keen interest in a
similar wood product; as a result, Vantage immediately allocated several thousand dollars to
the development and marketing of the chemically processed wood. Simultaneously, a minor
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reorganization occurred, placing Johnny and his project under the direction of Greg Waites,
a close friend of Johnny’s. Thus came Johnny’s opportunity to get out of the lab and become
involved in the more desirable promotion and marketing aspects.
Johnny and Greg soon began traveling nationally, discussing the new product with
potential customers. Traveling enabled Johnny to spend less and less time in the lab; as a
result, many of the experiments required to determine the performance characteristics of
the new product were left unfinished. As the number of companies grew that demonstrated
an interest in purchasing small quantities for trial applications. Johnny suggested to Greg
that a small pilot plant be constructed. In answering Greg’s concerns regarding the
performance characteristics of the wood, Johnny assured him that the preliminary test
indicated the wood could be successfully produced. Johnny contented that Vantage had to
get a head start in the new market before anyone else got into the game; they should build
the pilot plant immediately to fill the sudden influx of orders and then worry about
completing the performance tests. Greg, seeing advantages associated with getting into the
market first, finally agreed. Construction of the pilot plant began shortly thereafter.
During construction, Johnny and Greg continued traveling around promoting the
wood. When the pilot plant was near completion, Johnny went to Vantage’s personnel
department and requested that three laborers be hired to operate the plant. Johnny
personally intended to direct the technical operations and thus saw no need to establish
elaborate job descriptions for the positions.
A week later, Johnny had his three employees. Due to a workload reduction in the
Electronics Division of Vantage, the employees filling these position had taken the laborers
jobs in order to avoid being laid off. One had been a purchasing agent and the others had
been electronics technicians. At the beginning of the workday, Johnny would drop by the
plant and give directions to the crew for the entire day before departing to make sales calls.
No formal leader had been appointed and the three laborers, knowing little about the
chemical process involved, were instructed to “use common sense and ingenuity”.
A month after the plant operations had gotten underway, a major producer of
archery bows requested an order of 2000 bow handles to be delivered in time to be sold for
the upcoming hunting season. It was too good to be true. Johnny knew if they accepted the
order, the first year of operations would be guaranteed to be in the black. Upon receiving
the product specifications. Johnny persuaded Greg to sign the contract, arguing that they
would be throwing all their hard work down the drain if they didn’t. Subsequently, a crash
program was established at the plant to het the order out on time.
One month after the final shipment of handles had been made. Johnny hired a junior
engineer. Steve Adams, to conduct the performance experiments that had been disbanded
while the plant had been getting the rush order out. Steve examined some of the
experiments handles and discovered hairline cracks at carious stress points that had not
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appeared during the initial examination. He immediately went to Johnny’s office to inform
him of the problem and found Johnny and Greg sitting there with a telegram from the
archery company. It stated that several retailing merchants had returned bows with hairline
cracks at the handles and that the archery company would seek a settlement for their entire
investment in the handles.
Vantage paid the settlement and subsequently cancelled the wood project. ☹
Questions
1. The lack of formal planning is the main reason why the wood project failed. Most
decisions that Johnny made was on the spur of the moment without giving it
proper time and consideration before making the decision. His feeling of wanting
to get promoted and sell his product is what narrowed his mind in his decisions.
2. Yes, if only Johnny waited until his product is complete and stable, then made an
strategic plan for his business before going into the market. The chances of their
success would have been high.
3. At the very start of the planning process, Self-Audit. In the story we can clearly see
that Johnny did not complete the tests for his wood, the quantity and quality of
the personnel he hired is based on a whim and not through proper evaluation, and
there is no organizational structure in the plant.
4. In every planning process, self-audit is very important. To know where you are
standing is important to establish a well-built plan. Hire enough workers that are
aligned with the job that you are giving them and always have an organizational
chart to establish order in the organization. Next, is to set major objectives and
minor ones that will lead to the major objectives. To know where you are going
very important because if you make decisions without an objective, you will tend
to get lost and end up failing. Lastly, always have a long range plan. Your short
range will just follow what you have in the long run so it is very important to have
a long range plan.
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XI. QUIZ
1. It is the process of deciding what objectives to pursue during a future time period
and what to do to achieve those objectives.
Answer: Planning
2. What are the three basic questions in planning?
Answer: where are we now? Where do we want to be? How can we get there from
here?
3. (True or False) Planning enables a manager or organization TO ACCEPT RATHER
THAN AFFECT THE FUTURE.
Answer: False
4. (True or False) No planning is carried out on an informal or casual basis
Answer: False
5. Short-range plans generally cover up to __ year.
Answer: One
6. It covers a relatively long period of time and affects many parts of the organization.
Answer: Strategic Plans/Planning
7. It is the first step in the planning process which is designed to answer the question
“where are we now?”
Answer: Prepare Self-Audit
8. (True or False) Forecasting methods and levels of sophistication vary greatly
Answer: True
9. (True or False) Strategic management is the application of the basic planning process
at the highest levels of the organization.
Answer: True
10. ______ is the MENTAL EXERCISE required to develop a plan.
Answer: Planning
Quotes:
- Random Guy
NOICE!