Hospital Management Lec 7 PDF

# The Foundations of Planning ## The Objectives By the end of this day the participant could be able to: - Define the nature and purposes of planning. - Classify the types of goals organizations might have and the plans they use. - Compare and contrast approaches to goal-setting and planning. - D...

# The Foundations of Planning ## The Objectives By the end of this day the participant could be able to: - Define the nature and purposes of planning. - Classify the types of goals organizations might have and the plans they use. - Compare and contrast approaches to goal-setting and planning. - Discuss contemporary issues in planning. ## Planning - **Planning** - A primary managerial activity that involves: - Defining the organization's goals - Establishing an overall strategy for achieving those goals - Developing plans for organizational work activities - **Formal planning** - Specific goals covering a specific time period - Written and shared with organizational members ## What are Purposes of Planning? - **Reasons for Planning** - A diagram illustrating the different reasons for planning. - Set Control Standards - Provide Direction - Minimize Waste or Redundancy - Reduce the Impact of Change ## The Relationship Between Planning and Performance - **Formal planning** is associated with: - Higher profits and returns on assets - Positive financial results - The quality of planning and implementation affects performance more than the extent of planning. - The external environment can reduce the impact of planning on performance. - Formal planning must be used for several years before planning begins to affect performance. ## Elements of Planning - **Goals** (also Objectives) - Desired outcomes for individuals groups or entire organizations - Provide direction and evaluation performance criteria - **Plans** - Documents that outline how goals are to be accomplished - Describe how resources are to be allocated and establish activity schedules ## Types of Goals - **Financial Goals** - Are related to the expected internal financial performance of the organization. - **Strategic Goals** - Are related to the performance of the firm relative to factors in its external environment (e.g. competitors). ## Types of Plans - **Strategic Plans** - Apply to the entire organization. - Establish the organization's overall goals. - Seek to position the organization in terms of its environment. - Cover extended periods of time. - **Operational Plans** - Specify the details of how the overall goals are to be achieved. - Cover a short time period. ## Types of Plans: Categorization - Diagram of Types of plans, categorized by: - **Breadth** - Strategic - Operational - **Time Frame** - Long Term - Short Term - **Specificity** - Directional - Specific - **Frequency of Use** - Single use - Standing ## Types of Plans: Scope and Flexibility - Diagram illustrating a spectrum of objectives and flexibility in two extremes. - **Specific Plans** - Clear objectives - Low flexibility - **Directional Plans** - General objectives - High flexibility ## Single-Use and Standing Plans - Diagram showing a split between two types of plans - **Single-Use Plans** - Unique Situations - **Standing Plans** - Ongoing Operations ## Arguments Against Strategic Planning - 1) Rigid Assumptions of Stability - 2) Environmental Turbulence - 3) Intuition and Creativity - 4) Focus on Today's Competition - 5) Preoccupation with Current Success ## Strategic Management - **Strategic management** is what managers do to develop the organization's strategies. ## Strategic Management Process - A diagram outlining the Strategic Management Process, with steps: - Identify the organization's current mission, goals, and strategies - External Analysis - Opportunities - Threats - Internal Analysis - Strengths - Weaknesses - **SWOT Analysis** - Formulate Strategies - Implement Strategies - Evaluate Results ## Importance of Strategic Management - 1) The organizations that use strategic management do have higher levels of performance - 2) They cope with this uncertainty by using the strategic management process to examine relevant factors and decide what actions to take. - 3) Organizations are complex and diverse. Each part needs to work together toward achieving the organization's goals. ## Strategic Flexibility - It is the ability to recognize major external changes, to quickly commit resources, and to recognize when a strategic decision isn't working. ## Benefits of Developing Strategic Flexibility - 1) Encourage leadership unity by making sure everyone is on the same page - 2) Know what's happening with strategies currently being used by monitoring and measuring results. - 3) Encourage employees to be open about disclosing and sharing negative information. - 4) Multiple alternatives when making strategic decisions. - 5) Learn from mistakes. ## Innovation strategy - They can include applying existing technology to new uses - The organization innovates new and improved ways for employees to do their work in all organizational areas. - This innovation strategy can lead to lower costs, as we know, also can be a significant source of competitive advantage. ## Setting Goals and Developing Plans - 1) **Traditional Goal Setting** - Broad goals are set at the top of the organization. - Goals are then broken into sub-goals for each organizational level. - Assumes that top management knows best because they can see the "big picture". - Goals are intended to direct, guide, and constrain from above. - Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility. ## Maintaining the Hierarchy Of Goals - **Means-Ends Chain** - The integrated network of goals that results from establishing a clearly-defined hierarchy of organizational goals - Achievement of lower-level goals is the means by which to reach higher-level goals (ends). ## Management By Objectives (MBO) - **Specific Performance Goals** are jointly determined by employees and managers. - **Progress** towards accomplishing goals is periodically reviewed. - **Rewards** are allocated on the basis of progress towards the goals. - **Key elements of MBO:** - Goal specificity - Participative decision making - Explicit performance/evaluation period - Feedback ## Common MBO Elements - A diagram illustrating the following elements of MBO: - Goal Specificity - Participative Decision Making - Explicit Time Period - Performance Feedback ## Steps in a Typical MBO Program - 1) The organization's overall objectives and strategies are formulated. - 2) Major objectives are allocated among divisional and departmental units. - 3) Unit managers collaboratively set specific objectives for their units with their managers. - 4) Specific objectives are collaboratively set with all department members. - 5) Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees. - 6) The action plans are implemented. - 7) Progress towards objectives is periodically reviewed, and feedback is provided. - 8) Successful achievement of objectives is reinforced by performance-based rewards. ## Reason for MBO Success - Top management commitment and involvement. ## Potential Problems with MBO Programs - Not as effective in dynamic environments that require constant resetting of goals - Overemphasis on individual accomplishment may create problems with teamwork ## Well-Written Goals - Diagram outlining 5 features of well-written goals. - Written in terms of outcomes, not actions - Measurable and quantifiable - Clear as to time frame - Challenging yet attainable - Written down - Communicated to all necessary organizational members ## Steps in Goal Setting - 1) Review the organization's mission statement. Do goals reflect the mission? - 2) Evaluate available resources. Are resources sufficient to accomplish the mission? - 3) Determine goals individually or with others. Are goals specific, measurable, and timely? - 4) Write down the goals and communicate them. Is everybody on the same page? - 5) Review results and whether goals are being met. What changes are needed in mission, resources, or goals? ## Contingency Factors in a Managers Planning - **Manager's level in the organisation** - Strategic plans at higher levels - Operational plans at lower levels. - **Degree of environmental uncertainty** - Stable enviroment: specific plans - Dynamic environment: specific but flexible plans - **Length of future commitments** - Commitment Concept: current plans affecting future commitments must be sufficiently long-term to meet those commitments. ## Planning in the Hierarchy of Organizations - Diagram outlining the planning hierarchy in an organization: - **Strategic Planning** - Top Executives - **Operational Planning** - Middle-Level Managers - First-Level Managers ## Approaches to Planning - **Establishing a formal planning department**: - A group of planning specialists who help managers write organizational plans. - Planning is a function of management; it should never become the sole responsibility of planners. - **Involving organizational members in the process**: - Plans are developed by members of organizational units at various levels and then coordinated with other units across the organization. ## Contemporary Issues in Planning - **Criticisms of Planning:** - 1) Planning may create rigidity. - 2) Plans cannot be developed for dynamic environments. - 3) Formal plans cannot replace intuition and creativity. - 4) Planning focuses managers' attention on today's competition, not tomorrow's survival. - 5) Formal planning reinforces today's success, which may lead to tomorrow's failure. - 6) Just planning isn't enough. ## Effective Planning in Dynamic Environments - **Develop plans** that are specific but flexible. - **Understand** that planning is an ongoing process. - **Change Plans** when conditions warrant. - **Persistence** in planning eventually pays off. - **Flatten** the organizational hierarchy to foster the development of planning skills at all organizational levels. ## Setting Employee Objectives - Identify key job tasks - Set specific hard goals - Let employees participate - Prioritize goals - Build in feedback - Reward goal attainment ## What is Management by Objectives? - A diagram illustrating the hierarchy of objectives in Management by Objectives, starting from Organizational objectives down to Individual objectives. ## The Strategic Management Process - A diagram outlining the Strategic Management Process, with a focus on the flow of steps: - Set Mission, Objectives, and Strategies - Analyze the Environment - Identify Opportunities and Threats - Analyze Resources - Identify Strengths and Weaknesses - Reassess Mission and Objectives - Formulate Strategies - Implement Strategies - Evaluate Results ## Starting the Strategic Management Process - Diagram showing the focus is on Mission, Obejectives, and Strategies. ## SWOT Analysis - Diagram showing the four components of SWOT analysis: - Strengths - Weaknesses - Opportunities - Threats ## Determining A Competitive Strategy - Diagram outlining the 3 main competitive Strategies: - Cost leadership - Differentiation - Focus ## What Happens After Strategies are Formulated? - Diagram outlining the steps that follow formulation, with focus on **Implementation** and **Evaluation**.