Chap 6 : Objectives and

principles of planning

Dr Antoine TANNOUS

Dr Antoine TANNOUS
TO SET STRATEGIC OBJECTIVES
WE HAVE FIRST TO :
Analyzing trends
Scan external environment
Scan the internal environment
Scan the PLC of the company

OBJECTIVES SHOULD BE REWARDABLE =

Return on Investment = total dollar amount
earned .
total dollar amount invested to keep organization operating

Dr Antoine TANNOUS
 ACCORDING TO STRATIGIC OBEJCTIVES WE
SET THE TACTICALS OBJECTIVES eg :
Top Management :
– Represent stockholders’
interest – net profits of 10%
– Provide service to consumers
– provide reliable products
– Maintain growth of assets and
sales
– Develop favorable image with
public
Production departement
– Keep cost of goods no more
than 50% of sales
– Increase productivity of labor
by 3% per year…
– Maintain rejects at less than
2%
Dr Antoine TANNOUS
Sales Department
– Introduce new products
– Maintain a market share of
15%
– Seek new market areas so
that sales will grow at a 15%
annual rate
Finance and accounting
department
– Borrowing should not exced
50% of assets
– Provide monthly statements to
operating departments by
10th of following month
 ACCORDING TO TACTICALS OBJECTIVES WE
SET OBJECTIVES FOR EACH MANAGER AND
EMPLOYEES (Management By Objectives) eg :
Production departement District Sales Manager
Supervisors – Meet weekly sales quotas
– Handle employe grievances – Visit each large customer
within 24 hours once each month
– Maintain production to – Provide sales
standard or above representatives with
– Keep scrappage to 2% of immediate follow-up
materials usage support
Finance and
accounting
department : Office
Managers
– Maintain cycle billing within
3 days of target date
Dr Antoine TANNOUS– Prepare special reports
within 1 week of request
 Planning
Planning is the process of
determining how the management
system will achieve its objectives.

It is a listing of all the steps that

must be taken to plan for an
organization. It ensures that
planning gets done.
Dr Antoine TANNOUS
 Planning

1. Stating Organizational Objectives

2. listing alternative ways of reaching
objectives
3. choosing best alternative for
reaching objectives
4. developping plans to pursue chosen
alternative
5. putting plans into action
Dr Antoine TANNOUS
The planner = the top management
and the manager

Overseeing the planning process,

everyone according to his level in the
management
Evaluating developed plans
Solving planning problems

Dr Antoine TANNOUS
 A subsystem

Is a system created as part of the

process of the overall management
system.
A planning subsystem increases the
effectiveness of the overall
management system.

Dr Antoine TANNOUS
 A subsystem
Planning Process
1. Stating Organizational
INPUT Objectives
2. listing alternative
1. People ways of reaching
objectives OUTPUT
2. Money 3. choosing best
alternative for
PLANS
3. Row reaching objectives
Materials 4. developping plans to
pursue chosen
4. Machines alternative
5. putting plans into
action
Dr Antoine TANNOUS
To maximizing the effectiveness of
the planning process we need :
Top management support : Unless top
management supports the planning effort, other
organization members may not take it seriously.

An effective and efficient planning

organization :
– It should be designed to use established
management systems within the company.
– It should be complex enough to ensure a
coordinated effort of all planning participants.
– It should be flexible and adaptable.
Dr Antoine TANNOUS
To maximizing the effectiveness of
the planning process we need :
An implementation focused planning
orientation, eg of the failing of the marketing
plan for the Edsel automobile introduced by Ford
in the 1950s : Ford lunch high quality product.
The distribution was to intensive that consumer
found they were buying a poorly manufactured
product.
– The trend toward the purchase of higher priced
cars
– A general income increase in the society that
resulted in all income groups purchasing
higher-priced carsDr Antoine TANNOUS
 To maximizing the effectiveness of
the planning process we need :
Inclusion of the right people :
– Whenever possible, planners should obtain imput
from the managers of the functional areas for which
they are planning. These managers are close to the
everyday activity of their segments of the
organization.
– Feedback on how implementation is working.
– Employees should be asked, for eg, how various
proposed plans will inlfuence the work flow.
– Not all organization members should be involved in
the planning process.
Dr Antoine TANNOUS