Management Planning Concepts Quiz

Introduction to Management - Foundations of Planning

• This chapter covers the fundamental aspects of planning in management.

What is Planning?

• Planning is a core managerial function involving defining organizational goals, creating strategies to achieve these goals, and developing plans for daily tasks.
• Planning types include informal (non-written, short-term, unit-specific) and formal (written, specific, long-term, organizational-wide).

Why Do Managers Plan?

• Planning provides direction, reducing uncertainty, minimizing waste, and setting control standards.

Planning and Performance

• Formal planning is linked to higher profits, positive financial results, and a positive impact on performance.
• The quality of planning and implementation are more impactful than the extent of planning.
• External factors may impact the effect of planning on performance.

Elements of Planning

• Goals (also known as objectives) are desired outcomes for individuals, groups, or organizations. They provide direction and evaluation criteria.
• Plans document the methods to achieve goals. They detail resource allocation and activity scheduling.

Types of Goals

• Financial goals focus on expected internal financial performance.
• Strategic goals are relative to organizational performance in relation to the external environment, such as competitors.
• Stated goals are publicly declared organizational objectives that may differ from real goals (actual operations).

Types of Plans

• Exhibit 7-2 depicts various plans categorized by breadth, time frame, specificity, and frequency of use.
• Strategic plans apply to the whole organization, outlining overall goals.
• Operational plans detail how overall goals are accomplished and span a shorter period.
• Long-term plans extend beyond three years, whereas short-term plans are a year or less.
• Specific plans are clearly defined, and directional plans set general guidelines.
• Exhibit 7-3 contrasts specific and directional plans.
• Single-use plans are one-time plans for unique situations.
• Standing plans provide ongoing guidance for recurring activities.

Establishing Goals and Developing Plans

• Traditional goal setting starts with broad organizational goals, broken down into sub-goals for each level.
• This model assumes top management has a complete "big picture" view.
• This approach can cause clarity loss at lower levels since lower-level managers interpret goals differently.
• Exhibit 7-4 illustrates the traditional goal setting downside.

Establishing Goals and Developing Plans (cont'd)

• The means-ends chain is an integrated goal network resulting from a defined organizational hierarchy. Lower-level goals achieve higher-level goals.
• Management by Objectives (MBO) is a technique where goals are jointly determined by employees and managers. Progress is reviewed, rewards are based on progress, and keys to effective MBO include goal clarity, participation, explicit evaluation, and feedback.
• Exhibit 7-5 outlines steps in a typical MBO process.

Does MBO Work?

• Top management involvement is crucial for MBO success.
• Dynamic environments may require adjusting goals frequently.
• Emphasis on individual accomplishment could hinder teamwork.
• MBO becoming a burdensome form of paperwork should be avoided.

Characteristics of Well-Designed Goals

• Exhibit 7-6 showcases characteristics of well-designed goals, including being written in terms of outcomes, measurable, specific, clear regarding the timeframe, challenging but attainable, written down, and communicated to necessary members.

Steps in Goal Setting

• Reviewing the organization's mission statement and evaluating whether goals align.
• Assessing resource adequacy for achieving the mission.
• Determining goals individually or collectively, ensuring specificity, measurability, and timeliness.
• Writing down and communicating goals to ensure clarity and shared understanding.
• Reviewing progress and making adjustments as needed in mission, resources, or goals.

Developing Plans (Contingency Factors)

• Contingency factors in planning include the manager's level (strategic plans for higher levels, operational plans for lower levels), environmental uncertainty (stable environments necessitate specific plans, dynamic environments need flexible plans), and length of future commitments (current plans affecting future commitments need long-term perspectives).

Planning in Organizational Hierarchy

• Exhibit 7-7 illustrates planning across organizational levels.

Approaches to Planning

• Developing a formal planning department can aid in plans’ strategic approach.
• Ensuring members from all organizational levels participate in the planning process is advantageous.

Contemporary Issues in Planning

• Criticisms of planning include potentially causing rigidity, inability to adapt to dynamic environments, neglecting creativity and intuition, and focusing on current competition over future survival.
• Effective planning in dynamic environments involves flexibility, ongoing evaluation, adjusting plans with changing conditions, flattening the organizational structure, and improving planning skills across levels.

Glossary of Terms

• The chapter includes a list of key terms related to planning, including directional plans, single-use plans, standing plans, traditional goal setting, means-ends chain, management by objectives (MBO), mission, commitment concept, formal planning, and department planning.