Lesson 2_ Planning.pptx

Planning and Controlling – How and Why Managers Plan BOH4M How and WHY Managers Plan ●Planning – is the process of setting objectives and determining how to accomplish them ●When planning is done it creates a platform for management functions: ● organizing (allocating and arranging resources to ac...

Planning and Controlling – How and Why Managers Plan BOH4M How and WHY Managers Plan ●Planning – is the process of setting objectives and determining how to accomplish them ●When planning is done it creates a platform for management functions: ● organizing (allocating and arranging resources to accomplish tasks), ● Leading (guiding the effort of human resources to ensure high levels of task accomplishments) ● Controlling (monitoring task accomplishments and taking necessary corrective action) The Planning Process ●Objectives – are specific results that one wishes to achieve ●Plan – is a statement of intended means for accomplishing objectives Planning Process 1. Define your objectives – Identify desired outcomes or results in very specific ways; know where you want to go; know how far off you are off the mark, and be specific enough to know exactly when you arrived 2. Determine where you stand vis-à-vis objectives: Evaluate current accomplishment relative to the desired results. Know where you stand in reaching the obj; know what strengths work in your favour and what weaknesses may hold you back Planning Process 3. Develop premises regarding future conditions: Try to anticipate future events. Generate alternative “scenarios” for what may happen; identify, for each scenario, things that may help or hinder progress toward your objectives 4. Analyze and choose among action alternatives; List and carefully evaluate alternatives most likely to accomplish your objectives; describe step by step what must be done to follow the chosen course of action. Planning Process is Systematic ●Setting Performance objectives ●Deciding how to achieve them What are the Benefits of Planning? Benefits of Planning 1. Improves Focus and Flexibility ●An organization with focus knows what it does best, knows the needs of its customers and knows how to serve them well ●An individual with focus knows where he or she wants to go in a career or situation, and is able to retain that objective even when difficulties arise ●An organization with flexibility is willing and able to change and adapt to shifting circumstances, and operates with an orientation toward the future rather than the past ●An individual with flexibility adjusts career plans to fit new and developing opportunities Benefits of Planning 2. Planning Improves Action Orientation – more competitive, avoid complacency trap (getting into the habit of not trying to improve) ●Result orientated – creating a performanceoriented sense of direction ●Priority orientated- making sure the most important things get first attention ●Advantage oriented – ensuring that all resources are used to best advantage ●Change oriented – anticipating problems and opportunities so they can be best dealt with Benefits of Planning 3. Planning Improves Coordination; means-ends chain: lower-level objectives (means) help accomplish higher-level ones (ends) 4. Planning Improves Time Management; priorities help manage your time, “To-do” list, must do, should do , nice to do, really do not need to do…priority 5. Planning Improves Control; When planning is down well it facilitates control, easier to measure. Without planning, control lacks framework to measure how things are going and what could be done to make them go better Planning Theories Comprehensive Incrementalism Rational Comprehensive Planning (RCP) ●Focuses on logical decision-making approach and advocated a holistic approach to problem solving. ●Statistical (mathematical option) ●Easy to understand, not realistic ●It is used in designing neighbourhoods, cities, and regions. The rational planning model is central in the development of modern urban planning and transportation planning RCP Incrementalism ●Look at policy that differs incrementally from existing policies ●Only a relatively small number of policy alternatives are considered ●For each policy alternative, only a restricted number of important consequences are evaluated ●The problem confronting the decision maker is continually redefined; incrementalism allows for countless ends-mean and means-ends adjustments ●No one decision or right solution ●Remedial, alleviation of present, concrete social imperfections than to the promotion of future goals Types of Plans A.Short-range and long range plans B.Strategic and Operational Plan C.Policies and Procedures A.Short-Range and LongRange Plans ●Short-range plans – one year or less (Lower Management) ●Intermediate-range plans – One to two years ●Long-range plans – three or more years (Top Management) B. Strategic Plans ●Set broad, comprehensive, and longer-term action directions ●Determining objectives for the entire organization and describing what the organization wants to be in the future ●Recall – SWOT, PEEST, Porter’s, BCG B. Operating Plans ●Identifies activities to implement strategic plans ●Defines what needs to be done in specific functions or work units to implement strategic plans ●Ex) To achieve our strategic plan of starting to sell hot foods in our convenience stores, let’s make a plan for how the counter department of each store will start to sell hot dogs. B. Operating Plans ●Production plans - dealing with the methods and technology needed by people in their work ●Financial plans – dealing with money required to support various operations ●Facilities plans – dealing with facilities and work layouts ●Marketing plans – dealing with the requirements of selling and distribution goods or services ●Human resources plans – dealing with the recruitment, selection, and placement of people into various jobs C. Policies and Procedures ●Standing Plans – in the form of organization policies and procedures are designed for use over and over again C. Policies Versus Procedures ● A policy is a standing plan that communicates broad guidelines for making decisions and taking action in specific circumstances. ● Ex. hiring, termination, performance appraisals, pay increases, promotions, sexual harassment and discipline ● A procedure or rule precisely describes actions that are to be taken in specific situations –handbooks and manuals ● A policy sets a broad guideline for action, procedures define precise actions to be taken Personal Planning Worksheet ●Individually complete Worksheet 3-3b 6 Planning Methods 1.Budget 2.Forecast 3.Contingency 4.Scenario 5.Benchmark 6.Participatory Budgets ●A budget is a plan that commits resources to projects or activities ●Budgets are single use plans for activities, projects or programs Budget Fixed Versus Flexible Budgets ●Fixed Budget allocates a fixed amount of resources for a specific purpose ●Flexible Budget allows the allocation of resources to vary in proportion with various levels of activity Budgets and Projects ● Zero-based budget allocates resources as if each budget were brand new; no guarantee of renew ● Without starting fresh (e.g., without these zero-based budgets) the funds from last period (from the last budget we made) can get rolled over. This causes our budget numbers to be too large. With a zero-based budget, we do not bring forward any unused budget dollars from last period. ● Projects are one-time activities that have clear beginning and end points ● Project Management makes sure that activities required to complete a project are accomplished on time and correctly Forecasting Forecasting: Attempts to predict the future ●Qualitative forecasting - expert opinions to predict the future ● I.e., Bob is a toy expert and he predicts that toy sales will decrease in the month of April ●Quantitative forecasting - uses mathematical models and statistical analysis ● I.e., Grace uses last years sales and a regression model to predict that sales will likely decrease in the month of April. Scenario Planning ● Scenario Planning – identifies alternative future scenarios and makes plans to deal with each ● Scenarios are not predictions. Rather, they are plausible accounts of how relevant external forces — such as the future political environment, scientific and technological developments, social dynamics, and economic conditions — might interact and evolve in the future. ● In scenario planning, an organization typically creates three or four scenarios that capture a range of possibilities; examines the opportunities and threats that each may bring; and makes short- and long-term strategic decisions based on these analyses. Scenario Planning Example 1. If there is Poor Economic Growth - Consider relocation - Sell assets - Downsize 3. If there is Somewhat Strong Economic Growth - Make normal purchases - Aim for medium cost R&D initiatives 2. If there is Somewhat Poor Economic Growth - Be careful with purchases - Aim for low cost R&D initiatives 4. If there is Strong Economic Growth - Be aggressive with corporate investments. - Try ambitious R&D projects Contingency Plan ●Identifies alternative courses of action to take when things go wrong Contingency Plan ●Ex) If a natural disaster takes place, we will move our business to another location. Here is how we will switch storefronts... ●Ex) If a competing convenience store opens nearby, here is what we will do… Benchmarking ●Uses external comparison to gain insights for planning ●Successful planning should challenge the status quo ●Find out what other people and organization are doing and figure out how to put their ideas into mine. ●Best Practices are things that lead to superior performance (done by competitors and noncompetitor) ● Ex) 7-Eleven uses a highly effective franchising model. Maybe we should consider trying to adopt the best of their model into our convenience store chain’s plan. Participatory Planning ●Participatory Planning includes the persons who will be affected by plans and/or ill implement them ●Example – Joyce’s Convenience Store needs a new plan to sell hot foods to customers in a more efficient way. Using participatory planning, the managers of this organization would ask for input from front-line workers when actually developing the plan ●One risk is a tendency for a communication gap to develop between staff planners and line managers Participatory Planning ●Participatory planning includes the persons who will be affected by plans and/or who will implement them ●Participation may increase the creativity and information available for planning ●Increases the understanding and acceptance of the plans Think about this question: If you worked at Joyce’s Convenience Store, wouldn’t this make you more likely to care about the plan that was put in place?