Management Chapter 7: Foundations of Planning

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary purpose of planning in management?

To create team cohesion

To develop employee skills

To provide direction and reduce uncertainty (correct)

To increase employee satisfaction

Which of the following describes formal planning?

Spontaneous decision making based on current events

Informal agreements between managers

General goals without time constraints

Written plans outlining specific goals for a designated time (correct)

How does planning influence organizational performance?

Planning has no significant impact on performance

The quality of planning is more important than the quantity of planning (correct)

It mainly impacts employee morale

It guarantees success regardless of external conditions

What is a characteristic of well-written goals?

They are specific and measurable Signup and view all the answers

What does MBO stand for in the context of planning?

Management By Objectives Signup and view all the answers

What are contingency factors in planning?

Unforeseen variables affecting organizational plans Signup and view all the answers

Why might planning be criticized in modern management?

It is too inflexible to adapt to rapid changes Signup and view all the answers

What is one of the key benefits of planning as mentioned for organizations?

It minimizes waste and improves efficiency Signup and view all the answers

What is the primary purpose of goals in planning?

To provide direction and performance evaluation criteria Signup and view all the answers

Which type of plan is designed specifically for a one-time unique situation?

Single-Use Plan Signup and view all the answers

What distinguishes strategic plans from operational plans?

Strategic plans set overall organizational goals and cover extended periods Signup and view all the answers

What is the characteristic of a directional plan?

It provides general guidelines but allows for discretion Signup and view all the answers

How do long-term plans differ from short-term plans in terms of timeframe?

Long-term plans extend beyond three years Signup and view all the answers

What is a stated goal?

An official statement intended for public consumption that may not reflect reality Signup and view all the answers

Which of the following types of plans is intended for ongoing guidance?

Standing Plan Signup and view all the answers

What is a primary assumption of traditional goal setting?

Top management can see the big picture. Signup and view all the answers

What role does formal planning play in performance improvement?

It requires several years of use before impacting performance Signup and view all the answers

Which factor is crucial for the success of Management by Objectives (MBO)?

Top management commitment and involvement Signup and view all the answers

What is the main purpose of the means-ends chain in goal setting?

To demonstrate how lower-level goals support higher-level goals. Signup and view all the answers

Which step is NOT part of a typical Management by Objectives (MBO) program?

Defining performance based on subjective measures. Signup and view all the answers

What is a potential problem associated with MBO programs?

MBO becoming an annual paperwork shuffle Signup and view all the answers

What key aspect differentiates MBO from traditional goal setting?

Employee involvement in goal setting. Signup and view all the answers

Well-written goals should be challenging yet which of the following?

Challenging yet attainable Signup and view all the answers

Which of the following is a potential downside of traditional goal setting?

Goals being misinterpreted by lower-level managers. Signup and view all the answers

Which step is NOT part of the goal-setting process?

Ignore the organization’s mission statement Signup and view all the answers

What is a critical element of Management By Objectives (MBO)?

Defined performance goals. Signup and view all the answers

What should well-written goals be written in terms of?

Outcomes, not actions Signup and view all the answers

What is the purpose of reviewing results in the goal-setting process?

To determine if goals were set properly Signup and view all the answers

How does goal specificity in MBO affect employee performance?

It helps employees understand expectations clearly. Signup and view all the answers

Which of the following reflects the feedback element of MBO?

Progress is reviewed periodically. Signup and view all the answers

In what way can high goals impact motivation?

They can motivate if they are achievable Signup and view all the answers

How should planning be viewed within an organization?

As a collaborative function of management Signup and view all the answers

What is one criticism of formal planning mentioned?

It can create rigidity within organizations. Signup and view all the answers

Which approach is recommended for effective planning in dynamic environments?

Develop plans that are specific but flexible. Signup and view all the answers

What is an assumption about planning that can lead to its failure?

Planning should be a one-time event. Signup and view all the answers

Flattening the organizational hierarchy is recommended to enhance what aspect of planning?

Developing planning skills at all organizational levels. Signup and view all the answers

Which type of plans focuses on long-term objectives?

Strategic plans Signup and view all the answers

Why is intuition sometimes considered important in the planning process?

It can help in unpredictable environments. Signup and view all the answers

What should organizations do when conditions change significantly?

Change their plans as warranted. Signup and view all the answers

What is a potential outcome of just planning without execution?

Ineffective strategies in competitive scenarios. Signup and view all the answers

Study Notes

Chapter 7: Foundations of Planning

Planning is a primary managerial activity involving defining organizational goals, establishing an overall strategy for achieving those goals, and developing plans for organizational work activities.
Formal planning involves specific goals covering a specific time period, and is written and shared with organizational members.
Purposes of Planning:
- Provides direction
- Reduces uncertainty
- Minimizes waste and redundancy
- Sets standards for controlling performance.
Relationship Between Planning and Performance:
- Formal planning is associated with higher profits and positive financial results.
- Quality of planning & implementation affect performance more than the extent of planning; external factors such as the environment can reduce the impact of planning on performance.
- Formal planning must be used for several years before it affects performance.

Elements of Planning

Goals (Objectives): Desired outcomes for individuals, groups, or organizations; they provide direction and performance evaluation criteria.
Plans: Documents outlining how goals are achieved; plans describe how resources are allocated and activity schedules are set.

Types of Goals

Financial Goals: Related to internal financial performance.
Strategic Goals: Related to performance relative to external factors such as competitors.
Stated Goals vs. Real Goals: Stated goals are official, public statements; real goals are the actual goals followed by an organization.

Types of Plans (Exhibit 7-1)

Strategic: Long-term, entire organization, positioning in the market.
Operational: Short-term, details of achieving overall goals
Long-Term: Plans extending beyond three years
Short-Term: Plans with a time frame of one year or less
Specific Plans: Clearly defined; leave no room for interpretation
Directional Plans: Flexible; set general guidelines, allow implementation discretion.
Single-Use Plans: One-time; unique situations
Standing Plans: Ongoing; provide guidance for recurring activities.

Setting Goals and Developing Plans

Traditional Goal Setting: Top-down approach (broad goals at top, broken down to sub-goals). Assumes top management understands the "big picture".
Management by Objectives (MBO): Specific performance goals determined jointly by employees and managers. Progress reviewed, rewards based on progress. Key elements are goal specificity, participative decision-making, explicit performance period, and feedback.
Exhibit 7-3: Shows steps in MBO, beginning with setting organization goals, objectives distributed to divisions and departments, unit managers setting specific objectives for their units, action plans agreed upon, action plans implemented, progress reviewed, objectives reinforced by rewards.

Evaluation

Well-written Goals (Exhibit 7-4): Written in terms of outcomes not actions; focused on ends; measurable & quantifiable, clear time frame, challenging yet attainable, communicated to all organizational members, and written down.
Steps in Goal Setting: Review mission, evaluate resources, determine goals, writing & communication (ensuring everyone is on the same page), review results.

Approaches to Planning

Formal Planning Department: A group of experts that assist managers in planning
Involving Organizational Members: Develop plans through organizational units and coordinate across units.

Contemporary Issues in Planning

Criticisms of Planning: Planning may create rigidity, cannot work in dynamic environments, does not replace intuition and creativity, may focus on today's competition rather than future; formal plans can lead to success today, yet to failure tomorrow.
Effective Planning in Dynamic Environments: Plans should be specific but flexible, understanding planning is ongoing, change plans as necessary, flatten organizational hierarchy to support planning skills at all levels.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz focuses on Chapter 7, which explores the foundations of planning in management. It covers the definition of planning, its purposes, and the relationship between planning and performance. Understand how formal planning can influence organizational success and performance outcomes.