TOPIC 4:

FOUNDATION
OF PLANNING
Learning Objectives

01 Discuss the nature and purposes of planning.

02 Compare and contrast approaches to goal setting and planning.

03 Discuss contemporary issues in planning.

What is Planning and
Why Do Managers
Need to Plan?
 Planning
 The primary management function
 Deciding on the organization’s objectives
or goals and getting the job done by Insert Your Image
establishing an overall strategy for
achieving those goals and developing a
comprehensive hierarchy of plans to
integrate and coordinate activities.
 Planning can be informal or formal.
 Reasons for Planning

SET THE STANDARDS

TO FACILITATE PROVIDE DIRECTION
CONTROL

MINIMIZE WASTE AND REDUCE THE IMPACT OF

REDUNDANCY CHANGE

4
Criticisms of Formal Planning

Reinforces success, which may

lead to failure

Focuses attention on today’s success,

not tomorrow’s survival

Can’t replace intuition and creativity

May create rigidity

Compare and Contrast
Approaches to Goal
Setting and Planning
 Planning
Planning
Two important aspects:
• Goals: Objectives/target/desired outcomes
• Plans: documents that outline how goals are
going to be met
55%
Types of Goals

Strategic Goals related to all other areas of an organization’s performance

Financial Goals related to financial performance of the organization

Stated Goals official statements of what an organization says and what's its
stakeholders to believe, it’s goals
Real Goals those goals an organization actually pursues as shown by what
the organization’s members are doing
Traditional Goal Setting
 Management by Objectives (MBO)
A process of setting mutually agreed-upon goals and using those goals to evaluate
employee performance

Participative
Goal An explicit Performanc
decision
specificity time period e feedback
making
 Well-Written Goals
Written in terms of outcomes rather than actions

Measurable and quantifiable

Clear as to a time frame

Challenging yet attainable

Written down

Communicated to all necessary organizational members

 Steps in Goal Setting

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

Review the Evaluate Determine the Make sure goals Make sure goals Link rewards to
organization’s available goals are well written are well written goal attainment.
mission and resources. individually or and and
employees’ key with input from communicate to communicate to
job tasks. others. all who need to all who need to
know. know.

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 Types of Plans
Breadth of Use Time Frame Specificity Frequency of Use
Strategic Long term Directional Single use
Tactical Short term Specific Standing

Flexibility ↔ Clarity
 Developing Plans

Organizational
level

Degree of
Length of future
environmental
commitments
uncertainty

Planning and Organizational Level

 Approaches to Planning

Development by
Top-down tradi-
organizational
tional approach
members
What Contemporary
Planning Issues Do
Managers Face?
Contemporary Issues in Planning

Planning in
dynamic envi-
ronments

Crisis situa-
tions

Environmental
scanning
Thank you