Foundations of Planning Chapter 8

What is Planning?

• Planning is a management function that involves setting goals, establishing strategies, and developing plans to integrate and coordinate work activities.
• Formal planning involves specific, time-oriented goals that are written and shared.
• It provides direction and reduces uncertainty.

Importance of Planning

• Minimizes waste and redundancy.
• Establishes goals and standards for controlling.
• Associated with positive financial results.

Goals and Plans

• Goals are desired outcomes or targets.
• Plans are documents that outline how goals are going to be met.
• Objectives provide management with direction and serve as a means to measure progress.
• Real objectives are what the organization actually pursues, while stated objectives are official statements of what the organization wants the public to believe.

Types of Plans

• Strategic plans apply to the entire organization and establish overall goals.
• Long-term plans have a time frame beyond three years.
• Operational plans encompass a particular area of the organization.
• Short-term plans cover one year or less.
• Directional plans are flexible and set out general guidelines.
• Specific plans are clearly defined and leave no room for interpretation.
• Single-used plans are designed to meet the needs of a unique situation.
• Standing plans provide guidance for activities performed repeatedly.

Contingency Factors in Planning

• Degree of environmental uncertainty.
• Level in the organization.
• Length of future commitments.

Planning in the Organizational Hierarchy

• Strategic planning involves top management.
• Operational planning involves middle-level managers and first-level managers.

Approaches to Setting Objectives

• Traditional approach: top management sets objectives that flow down through the organization.
• Management by Objectives (MBO): a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance.

Planning Effectively

• Get employees involved in planning.
• Develop specific but flexible plans.
• Use environmental scanning to detect emerging trends.

Environmental Scanning

• Involves screening information to detect emerging trends.
• Includes scanning the general environment (political, economic, social, and technological).
• Includes scanning the specific environment (industry, competitors, suppliers, and customers).
• Competitive intelligence involves gathering information about competitors to anticipate their actions.
• Business intelligence involves using digital tools for data analysis and processing.

Digital Tools for Environmental Scanning

• Virtual reality can be used for interviewing job candidates, virtual meetings, complex job training, and previewing office or plant layouts.
• Social media is becoming increasingly important for extracting competitive intelligence.