Management: Planning and Goal Setting

What is Planning?

• Planning is a management function that involves setting goals, establishing strategies, and developing plans to integrate and coordinate work activities.
• It provides direction and reduces uncertainty.

Goals and Plans

• Goals are desired outcomes or targets.
• Plans are documents that outline how goals are going to be met.
• 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 its 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 affects planning.
• Level in the organization affects planning.
• Length of future commitments affects planning.

Planning in the Organizational Hierarchy

• Strategic planning is done by top management.
• Operational planning is done by first-level managers.
• Middle-level managers are involved in both strategic and operational planning.

Approaches to Setting Objectives

• Traditional objective-setting involves top management setting objectives that flow down through the organization.
• Management by Objectives (MBO) involves setting mutually agreed-upon goals and using them to evaluate employee performance.
• MBO involves setting objectives that cascade down through the organization and are translated into operational objectives at each level.

Planning Effectively in a Dynamic Environment

• Involve employees in planning to ensure they understand and can implement the plan.
• Plan for uncertainties by developing specific but flexible plans.

Environmental Scanning

• Environmental scanning involves screening information to detect emerging trends.
• It involves scanning the general environment (political, economic, social, technological) and the specific environment (industry, competitors, suppliers, customers).
• Competitive intelligence involves gathering information about competitors to anticipate their actions.
• Digital tools such as business intelligence, virtual reality, and social media can be used for environmental scanning and data analysis.