Foundations Of Planning.

What is planning and why is it important?

Planning involves defining goals, establishing strategies for achieving these goals and developing plans to integrate and co-ordinate activities.

Formal Planning

Formal planning is important beacause it invloves the specific goals to be covered in a period of years. These goals are written and shared with organizational members to reduce ambiguity and create a common understanding about what needs to b done.

• It provides direction.
• It reduces uncertainity.
• Minimizes waste and redundancy.
• Establishes the goals or standards used in controlling.
• Formal planning is associated with positive financial results.

How Do Managers Plan?

Managers plan by keeping two things in view.

Goals: The desired outcomes for individuals, groups or entire organization's.

Plans: Documents that outline how the goals are going to met.

Types Of Goals

Strategic or Financial: Plans that apply to the entire organzation and strategic plans are usually long-term plans.

Stated and real: Those goals that an organzation actually pursues.

Types Of Plans

Strategic Plans: Plans that apply to the entire organzation and strategic plans are usually long term plans.

Operational Plans: Plans that specify how the overall goals are going to be achieved.

Long-term Plans: Plans with a time frame beyond three years.

Short-term Plans: Plans covering one year or less.

Specific Plans: Plans that are clearly defined and leave no room for interpretation.

Directional Plans: Directional pland are specific pland that set out general outlines.

Standing Plans: Standing plans are ongoing plans that provide guidance for activities performed repeatedly.

How Do Managers set Goals?

Traditional Approach: If hierarchy of goals is clearly defined, a means-end chain is formed.

If not clearly defined, goals loose clarity and unity.

Management By Objectives Approach (MBO): The organizations overall objective and strategies are formulated.

Major objectives are allocated among divisional and departmental units.

Unit managers collaboratively set specific objectives for their units with their managers.

Specific objectives are collaboratively set with all department members.

Action plans definining how objectives are to be achieved are specified and agreed upon by managers and employees.

The action plans are implemented.

Progress towards objectives is periodically reviewed, and feedback is provided.

Successful achievement of objectives is re-informed by performance-based rewards.

How Do Managers Develop Plans:

The planning of managers is influenced by:

• Contigency factors which involves the level in the organization.
• The degree of environmental uncertainity.
• Length of future commitments.

Approaches To Planning

Formal Planning Department: This was a group of planning specialists whose sole responsibility was helping to write the various organizational plans. Under this approach, the plans developed by top level managers flowed down through other organizational levels, much like the traditional approach to goal setting.

Involves More Organzational Members In Process: In this approach, plans arent handed down from one level to the next but instead are develpoped by organizational members at various levels and in various units to meet their specific needs.

What Contemporary Planning Issues Face Managers?

The various criticisms of plannig invloves:

• creating rigidity
• cant be developed for synamic environment.
• cant replace intuition and creativity.
• focuses on today, not tomorrow.
• reinforces success, which can lead to failure.
• planning isnt enough.