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Chapter 8 Planning V,.JcJrk Activ1 11es 25 1
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let's rJ
get i lL.
CAi.... WPes of Plans

\
The Scenario:
Tommy and Kate Larkin ,ecent~y started a restaurant and specialty
tood store in Northern California. The store also s~lls wine and local!
made crafts. Although the business does well durmg the summer Y
'1 tourist months, things get pretty lean from October to April whe . _
numbers dwindle. The Larkins felt that the potential apportunit"ies tn th·
n ~lsitor
l
L-~'."~"'."1
. specificity
location were good. IS of Use
w,,,t,,,,sof plans do the t.,,t;ns need ta survive tbs off•season?

-----~-, i J--
.
strategic . . _ _ •......_)
n,e slow season is a wonderful rime for a business owner. This is t~
perfect opport11nit'! for brand and business development. Jf a n

need to be tested, this would be the perfect rime to run trials.

and development during these months could make the busy se
e

n:::es
Web sfte needs to be designed, this is the time to do it. Jf new :w

arch
more profitable. Tile ·business development" season also pre ason even
Operational
..,,..,,,..,---- ......___.
Short term
Directional

Specific
J--
- Single

Standing
use
WW

great opportunity to deepen ties in the community senrs a

and it is rhe prime time ro diversify business
between would be ~n il.llermediate plan. Although these lime classifications are fairly
offerings. Perhaps the restaurant could . -;
common, an or~amzat1on can use any planning time frame il wants.

focus on hostjng events on site or
catering off-site meals making
themselves more valuable to the local
community rather than depending so
heavily on rourlsm. Finally, it is a great
time for the oWl'lers to rest recover
and rejuvenate themselves from the
last season and gear up f~r the next.
Prudence Rufus
Business Owner/Photographer
close stud ent-faculty relations, and actively involving students in the learning process,
L1 j
·
Intuitively, it would see':"_th at specific plans would be preferable to directional. or
loosely guided, pl~ns. Spec1f1c ~lans ~re .clearly defined and leave no room for inter- specific plans
..,,,
pretation. spec!fic plan ~tat~s its Objectives in a way that eliminates ambiguity and P!frffl' iliat' 3reCiear1y defined and leave
no room IOI InterP<etahon
roblems with m, sund er 5tandmg. For example, a ma nager who seeks to increase his
~r her unit's work output by 8 percent over a given 12-month period might establish
specific procedures, budget a!loca~ion~, and sched ules of activi1ies to reach that goal. dfrectfona'l p·la ns
- - However, when -uncertamty 1s high and-managers-musLbe-Oexible in order to Plans that are flexible and set out general
respond to unexpected changes, directional plans are preferable. Directional plans gUtdel1nes
J j are nexible plans that set out general guide li nes. They provide focus but don't lock siogle-use plan
managers into specific goals or courses of aclion. For example, Sylvia Rhone, A one-IIme plan spec1lica•ty designed to
president of Motown Records, said she has a simple goal- to "sign grea t artists. " 11 meet the needs of a unique sItuaton
So instead of creating a specific plan to produce and market 10 albums from new
artists this year, she might formulate a directional plan to use a network of people p~!~;~hat
provide guidance tor

but then they put students into 300+ student lecture classes! Knowing that real and around the world to alert her to new and promising talent so she can increase the activities perlo,med repeatedly
stated goals may differ is important for recognizing what you might otherwise think number of new artists she has under co n-
tract. Keep in mind , however, that the flex-
are management inconsistencies.
ibility of directional plans must be weighed
against the lack of clarity of specific plans.. LEADER maki~);FERENCE
Types of Plans Some plans that managers develop are
Th~ most popular ways 10 describe orga nizational plans are breadth (strategic versus ongoing while others are used only once. A Jeff Bezos, founder and CEO of Amazon.com, under-
operatjonal). time frame (short term versus long term), specificity (directional versus single-use plan is a one-time plan specifi- stands the importance of goals and plans. As a leader.
specific), and frequency of use (single use versus standing). As Exhibit 8-1 shows, cally designed to meet the needs of a unique
1hese types of plans aren't independent. That is, strategic plans are usually long term, he exudes energy, enthusiasm. and dnve.'1 He 's fun
situation. For instance, when Walman wanted
Jtrateg!f._plans directional. and single use whereas operational plans are usually short term, specific, loving (his legendary laugh has been deswbed as a flock
Aans Thal apply to the ennre 10 expand the number of its stores in China,
and standin&jYhat does each include? of Canadian geese on nitrous oxide) but has pursued his
..-'Id estabhsh the
ClrgantZ.at,on top-level executives formulated a singie-use
Strategic plans are plans that apply to the entire organization and establish vision for Amazon with serious intensity and has demon-
orgaruaocw,~ overall goalS plan as a guide. In contrast, : tand~n~'!$
the organization's overall goals. Plans that encompass a panicular operational area are ongoing plans that provide guidance for strated an ability to inspire his employees through the ups and downs of a
ra';erat1c:mal plans
tnal encompass a par1rcu!ar
of the organization are called operational plans. These t\.VO types of plans differ activities performed repeatedly. Standing rapidly growing company. When Bezos founded the company as an online
ooeraloial area of the organization because strategic plans are broad wfiile operation"al pla ns arc narrow. plans include policies., rules., and procedures, bookstore. his goal was to be the leader in onfine reta//ing. Now 20 years
'.he number of years used to define shon-term and long- term plans has declined which we defined in Chapter 2. An example /arer. Amazon has become the world's general store, selling not only books.
[ !Ong-term plans
co_ns1derably because of environmental uncertainty. Long-term used to mean any- of a standing plan is the nondiscrimination CDs, and DVDs, but LEGOs, power drills, and Jacka/ope Buck tax,dermy
~ --~ ,me trarne beyond three
yea,s thm g over seven _years. Try to imagine what you're likely to be doing in seve n years, and anti-harassment policy developed by the mounts. to name a few of rhe millions of products you can buy. What can
and you can ~gm to appreciate how difficult it would be for managers to establish University of Arizona. It provides guidanc~ IO
shori-,e~ Ja.ns you learn from this leader making a difference?
plans that fa rm the future. We define long-tenn plans as those with a time frame university administrators, facult y. and stafl as
~IS·C(t',enng one year ,A fess
beyond three yea rs.10 Short-term plans coYer one yea r or less. Any time period in they make hiring plans and do their jobs.