Business Management

MOHAMED BEN YOUSEF

BMOHAM29@GMAIL.COM
 Business Management

Chapter 6-
Principles Of Planning

Mohamed Ben Youssef

PLANNING
 OBJECTIVES OF THE CHAPTER
1) OUTLINE THE GENERAL CHARACTERISTICS OF PLANNING,
(2) DISCUSS STEPS IN THE PLANNING PROCESS,
(3) DESCRIBE THE PLANNING SUBSYSTEM,
(4) ELABORATE UPON THE RELATIONSHIP BETWEEN
ORGANIZATIONAL OBJECTIVES AND PLANNING,
(5) DISCUSS THE RELATIONSHIP BETWEEN PLANNING AND THE
CHIEF EXECUTIVE, AND
(6) SUMMARIZE THE QUALIFICATIONS OF PLANNERS AND
EXPLAINS HOW PLANNERS CAN BE EVALUATED.
PLANNING CHARACTERISTICS
 WHAT IS PLANNING

• PLANNING IS THE PROCESS OF DETERMINING HOW THE

ORGANIZATION CAN GET WHERE IT WANTS TO GO. THE
FUNDAMENTAL PURPOSE OF PLANNING IS TO HELP THE
ORGANIZATION REACH ITS OBJECTIVES.
 ADVANTAGES OF PLANNING

(1) AN EMPHASIS ON THE FUTURE,

(2) COORDINATION OF DECISIONS, AND
(3) A CLEAR FOCUS ON THE OBJECTIVES.
IF DONE INCORRECTLY OR EXCESSIVELY, PLANNING CAN BE
DISADVANTAGEOUS, BUT ITS BENEFITS OUTWEIGH ITS DISADVANTAGES.
PLANNING PROCESS
 STEPS OF THE PLANNING PROCESS

• THE SIX STEPS OF THE PLANNING PROCESS ARE:

• (1) STATING OBJECTIVES,
• (2) LISTING ALTERNATIVES,
• (3) DEVELOPING PREMISES (ASSUMPTIONS),
• (4) CHOOSING ALTERNATIVES,
• (5) DEVELOPING PLANS TO PURSUE THE CHOSEN OBJECTIVE, AND
• (6) PUTTING THE PLAN INTO ACTION.
 IMPLEMENTATION

• IMPLEMENTATION OF THE PLANNING PROCESS IS THE KEY TO SUCCESS.

ONE WAY OF APPROACHING THIS IMPLEMENTATION IS TO VIEW
PLANNING ACTIVITIES AS ORGANIZATIONAL SUBSYSTEMS. CHIEF
EXECUTIVES HAVE THE FINAL RESPONSIBILITY FOR ORGANIZATIONAL
PLANNING. MANY CHIEF EXECUTIVES, ESPECIALLY OF LARGER FIRMS, SEEK
PLANNING ASSISTANCE FROM ORGANIZATIONAL PLANNERS. THESE
PLANNERS SHOULD BE ABLE TO: (1) USE THEIR ORGANIZATIONAL
EXPERIENCE, (2) SEE THE ORGANIZATION AS A WHOLE, (3) DETECT AND
REACT TO TRENDS, AND (4) GET ALONG WITH OTHERS.
 ORGANIZATIONAL PLANNERS
ORGANIZATIONAL PLANNERS HAVE THREE GENERAL DUTIES TO
PERFORM. THESE ARE:
(1) OVERSEEING THE PLANNING PROCESS,
(2) EVALUATING DEVELOPED PLANS, AND
(3) SOLVING PLANNING PROBLEMS. THE EVALUATION OF PLANNERS
WOULD BE BASED ON BOTH OBJECTIVE AND SUBJECTIVE APPRAISALS
OF THEIR PERFORMANCES. SUCCESS IN IMPLEMENTING A PLANNING
SUBSYSTEM IS NOT EASILY ATTAINABLE. SEVERAL SAFEGUARDS CAN
BE EMPLOYED TO ENSURE THE SUCCESS OF THE PLANNING PROCESS.
THESE INCLUDE: (1) TOP MANAGEMENT SUPPORT, (2) AN EFFECTIVE
AND EFFICIENT PLANNING ORGANIZATION, (3) AN IMPLEMENTATION
FOCUSED PLANNING ORIENTATION, AND (4) INCLUSION OF THE
RIGHT PEOPLE.
 ORGANIZATIONAL OBJECTIVES

• ORGANIZATIONAL OBJECTIVES ARE THE GOALS OR TARGETS TOWARD

WHICH THE ORGANIZATION OR MANAGEMENT SYSTEM IS DIRECTED.
OBJECTIVES ARE IMPORTANT TO AN ORGANIZATION BECAUSE THEY
PROVIDE IMPORTANT GUIDELINES FOR ACTIONS BY MANAGERS AND
OTHER ORGANIZATION MEMBERS.
• ORGANIZATIONAL OBJECTIVES FLOW NATURALLY FROM THE
ORGANIZATIONAL PURPOSE: THAT IS, THEY REFLECT THE
ORGANIZATIONAL PURPOSE. THE ORGANIZATIONAL PURPOSE IS WHAT
THE ORGANIZATION EXISTS TO DO, GIVEN A PARTICULAR GROUP OF
CUSTOMERS AND CUSTOMER NEEDS.
ORGANIZATIONAL OBJECTIVES
 AREAS OF ORGANIZATIONAL
OBJECTIVES
Managers should strive to develop and attain a variety of objectives in all
management system areas where activity is critical to the operation and success of
the system. Peter Drucker identifies eight key management system objectives:
•Market standing
•Innovation
•Productivity Physical and financial resources
•Profitability
•Managerial performance and development .
•Worker performance and attitude
•Public responsibility
 OBJECTIVES

• IN GENERAL, AN ORGANIZATION SHOULD HAVE:

• 1. SHORT-TERM OBJECTIVES—TARGETS TO BE ACHIEVED IN A YEAR
OR LESS
• 2. INTERMEDIATE-TERM OBJECTIVES—TARGETS TO BE ACHIEVED IN
ONE TO FIVE YEARS
• 3. LONG-TERM OBJECTIVES—TARGETS TO BE ACHIEVED IN FIVE TO
SEVEN YEARS
 GUIDELINES

• THE QUALITY OF GOAL STATEMENTS CAN VARY DRASTICALLY. THE

FOLLOWING ARE GENERAL GUIDELINES THAT MANAGERS CAN USE TO
INCREASE THE QUALITY OF THEIR OBJECTIVES. EIGHT GUIDELINES A
MANAGER SHOULD FOLLOW ARE:
• 1. MANAGERS SHOULD LET THE PEOPLE RESPONSIBLE FOR ATTAINING THE
OBJECTIVES HAVE A VOICE IN SETTING THEM.
• 2. MANAGERS SHOULD STATE OBJECTIVES AS SPECIFICALLY AS POSSIBLE.
• 3. MANAGERS SHOULD RELATE OBJECTIVES TO SPECIFIC ACTIONS
WHENEVER NECESSARY.
• 4. MANAGERS SHOULD PINPOINT EXPECTED RESULTS.
• 5. MANAGERS SHOULD SET GOALS HIGH ENOUGH THAT EMPLOYEES
WILL HAVE TO STRIVE TO MEET THEM BUT NOT SO HIGH THAT
EMPLOYEES GIVE UP TRYING TO MEET THEM.
• 6. MANAGERS SHOULD SPECIFY WHEN GOALS ARE EXPECTED TO BE
ACHIEVED.
7. MANAGERS SHOULD SET OBJECTIVES ONLY IN RELATION TO OTHER
ORGANIZATIONAL OBJECTIVES.
• 8. MANAGERS SHOULD STATE OBJECTIVES CLEARLY AND SIMPLY.
 FACTORS FOR SUCCESSFUL MBO
• THE FACTORS NECESSARY FOR A SUCCESSFUL MBO PROGRAM INCLUDE:
• 1. APPROPRIATE GOALS MUST BE SET BY TOP MANAGERS IN THE
ORGANIZATION. ALL INDIVIDUAL MBO GOALS ARE BASED ON THESE
OVERALL OBJECTIVES. IF THE OVERALL OBJECTIVES ARE INAPPROPRIATE,
INDIVIDUAL MBO OBJECTIVES WILL ALSO BE INAPPROPRIATE, AND THE
RELATED INDIVIDUAL WORK ACTIVITY WILL BE NON-PRODUCTIVE.
• 2. MANAGERS AND SUBORDINATES TOGETHER MUST DEVELOP AND
AGREE ON EACH INDIVIDUAL’S GOALS. BOTH PARTIES MUST FEEL THAT THE
INDIVIDUAL OBJECTIVES ARE JUST AND APPROPRIATE IF EACH PARTY IS TO
USE THEM SERIOUSLY AS A GUIDE FOR ACTION.
• 3. EMPLOYEE PERFORMANCE MUST BE CONSCIENTIOUSLY EVALUATED
AGAINST ESTABLISHED OBJECTIVES. THIS EVALUATION WILL HELP TO
DETERMINE IF THE OBJECTIVES ARE FAIR AND IF APPROPRIATE MEANS ARE
BEING USED TO ATTAIN THEM.
• 4. ONCE THE MBO PROGRAM HAS BEEN INSTITUTED, MANAGEMENT
MUST FOLLOW THROUGH ON THE EMPLOYEE PERFORMANCE
EVALUATIONS AND REWARD EMPLOYEES ACCORDINGLY. ALL
ORGANIZATION MEMBERS MUST REALIZE THAT THE MBO EFFORT IS A
SERIOUS ONE AND THAT EMPLOYEES SHOULD PERFORM THEIR
DESIGNATED ROLES.
 ADVANTAGES AND DISADVANTAGES

• THE ADVANTAGES OF USING MBO INCLUDE A CONTINUAL EMPHASIS

ON WHAT SHOULD BE DONE TO ACHIEVE THE ORGANIZATION’S GOALS
AND A BUILDING OF EMPLOYEE COMMITMENT TO ATTAINING
ORGANIZATIONAL GOALS. THE JOINT EFFORT IN DEVELOPING THE
OBJECTIVE MAKES BOTH MANAGERS AND EMPLOYEES MORE INTERESTED
IN WORKING HARDER TO REACH THESE GOALS.
• AS FOR DISADVANTAGES, MBO APPEARS TO TAKE A GREAT DEAL OF
TIME AND CREATES A LARGE VOLUME OF PAPERWORK. ORGANIZATION
MEMBERS ARE LEFT WITH LESS REAL TIME TO WORK TOWARD ATTAINING
GOALS.
 CEO
• IN ADDITION TO THE RESPONSIBILITY OF ORGANIZATIONAL
PLANNING, CHIEF EXECUTIVES ARE RESPONSIBLE FOR THE
FOLLOWING ROLES:
•
1. FIGUREHEAD—(SOCIAL, LEGAL, AND CEREMONIAL).
2. LEADERS.
3. LIAISONS.
4. MONITORS.
5. DISTURBANCE HANDLERS.
6. RESOURCE ALLOCATORS.
QUESTIONS SEEKING ANSWERS BY
CEO

• 1. IN WHAT DIRECTION SHOULD THE ORGANIZATION BE GOING?

• 2. IN WHAT DIRECTION IS THE ORGANIZATION GOING NOW?

• 3. SHOULD SOMETHING BE DONE TO CHANGE THIS DIRECTION?

4. IS THE ORGANIZATION CONTINUING IN AN APPROPRIATE
DIRECTION?
 PLANNERS

• SINCE THE CEO HAS A HOST OF OTHER DUTIES AND RESPONSIBILITIES,

ASSISTANCE IS SOUGHT IN THE PLANNING PROCESS. THE PLANNER IS
RESPONSIBLE FOR DEVELOPING PLANS AND ADVISING
MANAGEMENT ON WHAT ACTIONS SHOULD BE TAKEN TO
IMPLEMENT THOSE PLANS.
• THE PLANNER MUST BE EVALUATED WITH THE SAME
GUIDELINES AS ARE OTHER ORGANIZATIONAL MEMBERS:
DOES THE CONTRIBUTION THE INDIVIDUAL MAKES TO THE
ORGANIZATION IN ACHIEVING ITS OBJECTIVES OUTWEIGH
THE COST OF THE INDIVIDUAL? SPECIFIC MEASURES OF
PERFORMANCE MIGHT INCLUDE THE DEGREE TO WHICH THE
PLANNER USES APPROPRIATE PLANNING TECHNIQUES,
ATTEMPTS TO EVALUATE INFORMATION RATIONALLY AND
OBJECTIVELY, AND GATHERS APPROPRIATE INFORMATION.
OTHER OBJECTIVE
MEASURES WHICH AFFECT PLANNING PERFORMANCE INCLUDE
PLANS THAT:
(1) ARE IN WRITING,
(2) ARE A TEAM-PLANNING EFFORT,
(3) INCLUDE PRESENT AND FUTURE BUSINESS OPPORTUNITIES,
(4) MENTION ORGANIZATIONAL OBJECTIVES.
(5) INCLUDE SUGGESTIONS ON TAKING ADVANTAGE OF FUTURE
OPPORTUNITIES,
(6) EMPHASIZE BOTH INTERNAL AND EXTERNAL ENVIRONMENTS,
(7) OPERATE OBJECTIVE ATTAINMENT, AND
(8) INCLUDE BOTH LONG- AND SHORT-RANGE RECOMMENDATIONS.
 SUMMARY

• PLANNING HAS BEEN LABELED THE PRIMARY MANAGEMENT

FUNCTION BECAUSE IT SETS THE STAGE FOR ALL OTHER ASPECTS OF
MANAGEMENT. ALONG WITH MANY OTHER PRACTICAL REASONS
FOR PLANNING, MANAGERS NEED TO PLAN IN ORDER TO COPE WITH
AN UNCERTAIN ENVIRONMENT. A PROPERLY WRITTEN PLAN TELLS
WHAT, WHEN, AND HOW SOMETHING IS TO BE ACCOMPLISHED.
• DEFINITION: STRATEGIC PLANNING
• STRATEGIC PLANNING IS A MEANS BY WHICH LEADERS CAN INFLUENCE THE
FUTURE. IT IS A PROCESS THAT WORKS TOWARD TWO ENDS: IT
SYSTEMATICALLY SETS A COURSE OF ACTION AND IT PROVIDES A CLEAR
PICTURE OF WHERE A TEAM/ORGANIZATION HAS BEEN AND WHERE IT
WANTS TO BE. STRATEGIC PLANNING ADDRESSES ESSENTIAL
TEAM/ORGANIZATIONAL QUESTIONS: WHAT DO WE DO? WHO ARE OUR
CUSTOMERS? WHERE ARE WE RIGHT NOW? WHERE DO WE WANT TO BE IN
THE FUTURE? HOW DO WE CHART A COURSE OF ACTION? HOW DO WE
DEFINE SUCCESS? STRATEGIC PLANNING IS A LEARNING JOURNEY.
• STRATEGIC PLANNING IS NOT A ONETIME EVENT, RATHER IT IS AN ONGOING
PROCESS OF LOOKING DEEPLY INTO WHAT THE TEAM/ORGANIZATION IS,
DETERMINING ITS PRIORITIES, AND ADJUSTING METHODOLOGY. WHILE
LONG-RANGE PLANNING PLACES AN EMPHASIS ON SHAPING A VISION,
STRATEGIC PLANNING FOCUSES MORE ENERGY ON STRATEGIES TO ACHIEVE
A VISION.
 NINE-STEP PROCESS:
• THERE ARE MANY WAYS TO DESIGN AND IMPLEMENT A STRATEGIC PLAN;
ONE NINE-STEP MODEL IS SUMMARIZED BELOW:
• 1. PLANNING PREP: IDENTIFY KEY PLAYERS, GATHER BACKGROUND DATA,
& SET A TIMETABLE. BE CERTAIN THAT YOU DON'T RUSH OR
SHORTCHANGE THE PROCESS.
• 2. PINPOINTING A MISSION: REAFFIRM WHAT YOUR TEAM DOES, WHY IT
DOES IT, FOR WHOM, AND WHAT IT WANTS TO BECOME.
• 3. MAPPING REALITY: ISOLATE WHAT IS CURRENTLY WORKING AND
WHAT ISN’T: STRENGTHS AND IMPEDIMENTS. THIS INCLUDES ASSESSING
BOTH EXTERNAL AND INTERNAL CHALLENGES AND OPPORTUNITIES.
• EXTERNALLY, IDENTIFY FACTORS THAT IMPACT YOUR ABILITY TO ACHIEVE
GOALS AND MEET TARGETS. THIS MAY INCLUDE CONSIDERATION OF THE
ECONOMY, CHANGES IN CUSTOMER NEEDS, CLIENT EXPECTATIONS,
SUPPLIERS, COSTS, REGULATIONS, ETC.
• INTERNALLY, IDENTIFY FACTORS THAT IMPACT YOUR ABILITY TO ACHIEVE
OBJECTIVES, QUOTAS, AND GOALS. THIS MAY INCLUDE
CONSIDERATIONS LIKE PERSONNEL ISSUES, FACILITIES, RESOURCES,
OPERATION REQUIREMENTS, REVENUE PRESSURES, ETC.
• 4. SETTING GOALS AND OBJECTIVES: DEVELOP GOALS. IN A
NUTSHELL, GOALS ANSWER THE CORE QUESTION, “WHAT ARE THE
DESIRED OUTCOMES THAT WE WANT TO ACHIEVE?” OBJECTIVES
BREAK THE GOALS INTO SMALLER SPECIFIC PIECES THAT ARE
MEASURABLE.
• 5. BRAINSTORMING STRATEGIES: DISCUSS HOW YOU WILL ACHIEVE YOUR
GOALS AND OBJECTIVES. IN OTHER WORDS, WHAT ARE THE ACTIONS OR
METHODS THAT YOU WILL USE TO MEET YOUR GOALS AND
OBJECTIVES. YOUR BRAINSTORMING SHOULD ADDRESS KEY ISSUES, POSSIBLE
CHOICES THAT MUST BE MADE, AND QUESTIONS THAT NEED TO BE
ANSWERED. TEST YOUR SUGGESTED STRATEGIES AGAINST SET CRITERIA:
• IS THE STRATEGY REALISTICALLY DOABLE?
• IS THE STRATEGY ACCEPTABLE TO LEADERSHIP AND STAKEHOLDERS?
• DOES THE STRATEGY FIT OUR MISSION, VALUES, AND OPERATING NORMS?
• IS THE STRATEGY AFFORDABLE?
• CAN THE STRATEGY BE DONE IN A TIMELY WAY?
•
• 6. WRITING THE ACTION PLAN: SELECT THE BEST COURSE OF
ACTION. THIS IS A WORK PLAN OF WHAT WILL GET DONE WHEN
AND BY WHOM. IT SHOULD INCLUDE THE IDENTIFICATION OF
RESOURCES, NEEDS, KEY PLAYERS, AND DECISIONS TO BE MADE.
• BE SURE TO GATHER NECESSARY INPUT, SECURE BUY-IN FOR THE
PLAN, AND SEEK FINAL APPROVAL.
•
• 7. REMOVING THREATS & MAXIMIZING OPPORTUNITIES: DETERMINE
THE BEST WAY TO IMPLEMENT YOUR PLAN. CONSIDER IMPEDIMENTS,
POSSIBLE THREATS, “SELLING” THE ACTION PLAN, WHO CAN HELP,
OBSTACLES, AND POTENTIAL OPPORTUNITIES.
• 8. IDENTIFYING INDICATORS OF SUCCESS: DETERMINE WHAT WILL
INDICATE THAT YOUR ACTIONS ARE WORKING. IN OTHER WORDS,
HOW CAN YOU TELL IF YOU ARE ACTUALLY ACHIEVING YOUR
GOALS. THIS INCLUDES PERFORMANCE MEASURES THAT ARE BASED
ON DATA AND CAN BE MEASURED NUMERICALLY.
•
• 9. MONITORING & ADJUSTING THE PLAN: WORK TO KEEP THE PLAN
ALIVE AND WELL. THIS WILL INCLUDE REGULAR ASSESSMENTS,
REVISIONS, STATEMENTS OF PROGRESS, TWEAKING OF PROCEDURES,
WEIGHING OF FEEDBACK, AND REGULAR UPDATES AND REPORTS TO
LEADERSHIP.
 BEST PRACTICES
• WHEN STRATEGIC PLANNING, CONSIDER THE FOLLOWING
CONSIDERATIONS:
• INCLUDE A DIVERSE GROUP OF PLAYERS IN YOUR STRATEGIC PLANNING
PROCESS
• INCLUDE KEY DECISION MAKERS
• ARTICULATE THE ORGANIZATION’S VALUES AND MISSION
• DON’T RUSH THE PROCESS
• ALLOW AND ENCOURAGE OPEN AND DIVERGENT THINKING
• STRETCH YOUR THINKING; THINK OUTSIDE OF THE BOX
• TAKE AN UNFLINCHING LOOK AT YOUR CURRENT REALITY
• FOCUS ON TAKING ACTION
• BE OPEN TO CHANGE AS THE PROCESS UNFOLDS
• FOCUS ON A LOGICAL, SEQUENCE WORK PLAN
• AGREE ON CRITICAL ISSUES, BARRIERS, STRENGTHS, AND OPPORTUNITIES FOR
IMPROVEMENT BEFORE PUSHING FORWARD
• ESTABLISH A TIMEFRAME AND BE ACCOUNTABLE TO IT
• COMMUNICATE THE PLAN THOROUGHLY
• BE CERTAIN THE STRATEGIC PLAN REALISTICALLY FITS AVAILABLE RESOURCES
•
• THE PLAN SHOULD MEET BUT ALSO STRETCH CAPABILITIES
• KEEP THE STRATEGIC PLAN CONCISE (PLACE EXTENDED
DOCUMENTATION IN AN APPENDIX)
• STRATEGIC PLANNING SHOULD WORK TO STRENGTHEN LEADERSHIP
SKILLS, NURTURE STRATEGIC THINKING, AND EXPAND COMPETENCIES
• ENCOURAGE FEEDBACK AT EVERY STEP OF THE PROCESS
•
 Thank You

Mohamed Ben Youssef