Chapter 7 summary by Salman Jehangir

What is Planning and Why Is it Important?
Planning: defining organization's goals, establishing overall strategy, and developing plans.
>Formal planning is important because it:
1. provides direction
2. reduces uncertanity
3. minimizes waste and redundancy
4. establishes the goals or standards used in controlling
5. is associated with positive financial results
> external environment impacts this relationship, as does
> planning time frame
How do Managers Plan?
Two important elements:
>Goals (desired outcomes)
>Plans (documents outlining how goals will be met)
Types of goals
> strategic or financial
> stated and real
Types of plans
> breadth: strategic or operational
> time frame: short term or long term
> specificity: directional or specific
> frequency of use: single-use or standing
How Do Managers Set Goals
Traditional approach: top-down
> If hierarcy of goals is clearly defined, a means - end chain is formed
> If not clearly defined, goals lose clarity and unity
Management by objectives (MBO) approach: four elements
1. goal specificity
2. participative decision making
3. explicit time period
4. performance feedback
How Do Managers Develop Plans?
Influenced by:
Cotingency factors
> level in the organization
> environmental uncertainly
> commitment concept
Approaches
> formal planning
> involve more organizational members in process
What Contemporary planning issues face managers?
Criticisms of planning
> creates rigidly
> cant be developed for dynamic environment
> cant replace intituition and creativity
> foccues on today, not tommorrow
> reinforces success, which can lead to failure
> planning isnt enough