ch# 7 Foundation of Planning

8/7/2019 ch# 7 Foundation of Planning

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MANAGEMENT

FINAL PROJECT

CH# 7

SUBMITTD TO: PROF. IRFAN SALEEM

SUBMITTED BY:

BILAL ABDUL REHMAN L1F09BBAM0096

ADIL WASEEM L1S10BBAM2001

AZHAR HUSSAIN L1F09BBAM2121

USMAN TAHIR L1F09BBAM0162

ADEEL AZIZ L1S10BBAM2022

HUNAIS FAISAL L1F09BBAM0123

BBA

SECTION: A

DATE: 18TH JANUARY, 2011


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CHAPTER # 7

FOUNDATION OF

PLANNING


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WHAT IS PLNNING?

Definition:

Defining organization goals, establishing strategies for achieving those goals and

developing plans to integrate and coordinate activities.

Planning is preparing a sequence of action steps to achieve some specific goal. If you doit effectively, you can reduce much the necessary time and effort of achieving the goal.

A plan is like a map. When following a plan, you can always see how much you have

progressed towards your project goal and how far you are from your destination.Knowing where you are is essential for making good decisions on where to go or what to

do next.

WHY DO MANAGERS PLAN?

Planning seems to take a lot of effort. It is therefore important to prepare a plan keeping

in view the necessities of the enterprise. There are some following reasons that show whymanagers plan i.e.

y Planning reduces uncertainty by forcing managers to look, anticipate change anddevelop appropriate responses. And although managers plan so they respond

effectively.

y Planning minimizes waste and unemployment.y Planning establishes the goals used in controlling.

PLANNING AND PERFORMANCE

Planning and performance is basically the performance of employees and planning their

task. Doing agood job planning and implementing those plans plays a bigger part in highperformance that how much planning is done. Planning performance relationship seems

to be influenced by the planning time frame.

GOALS AND PLANS

Goals are the desired outcomes or target. They guide management decision and form thecriteria against which work results are measured.

Plans are documents that outline how goals are going to be met. They usually includeresource allocation and other necessary actions to accomplish the goals.


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TYPES OF GOALS

Goals can be strategic or financial, and they can stated or real.

STRATEGIC GOALS

Strategic goals are statements of what you wish to achieve over the period of the strategic

plan (e.g. over the next year, five years, ten years.) They reflect the analysis you do thatstarts with creating a vision, a role statement and a mission statement, and then your

analysis of your environment, strengths, weaknesses, opportunities and threats. Forexample, the plan of Kochi-based JRG that is a leading stock, commodity and insurance

broking company that planned to recruit 500 new employees and open 30 new regionalofficers across the country in the next 1 year so that the company emerges with largest

trading network in the country with 1500 terminals.

STATED GOALS

Official statement of what an organization says and what it wants its various stakeholders

to believe in its goals. E.g. Canadian company EnCanas vision is to be the worlds highperformance benchmark independent oil and Gas Company.

REAL GOALS

Goals that an organization actually pursues, as defined by the by the action of itsmembers e.g. a number of universities say their goals is limited class sizes, facilitating

close student-faculty relationships, and activity involving students in the learning process,but they commonly hold 300+students lecture classes!

PLANS

Definition: Document that outline how goals to be met.

TYPES OF PLANS:

There are eight types of plans.

Strategic plans Operational plans Long-term plans Short-term plans Specific plans Directional plans Single-use up plan Standing plans


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STRATEGIC PLANS: Plans that entire to an organization and established the

organization overall goals.

OPERATIONAL PLANS: A plan, which encompass a particular operational area of an

organization.

LONG-TERM PLANS: Plans with a time frame beyond three years.

SHORT- TERM PLANS:covering one year or less.

SPECIFIC PLANS: Plans that are clearly defined and that leave no room for

interpretation.

DIRECTIONAL PLANS: Plans that are fixable and that set out general guidelines.

SINGL-USE PLANS: A one-time plan specifically designed to meet the needs of a

unique situation.

STANDING PLANS:Ongoing plans that provide for activities performed repeatedly.

Q. In the case what type of planning managers do?

Ans: Managers plans short, medium, long-term planning. Some managers predetermine

and prioritize the deadline to be met and targets to be achieved on a daily or monthly

basis.


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SETTINGS GOALS AND DEVELOPING PLANS

APPROACHES TO SETTING GOALS

When choosing goals and objectives, there are several approaches an organization can

take. Three common approaches are; Traditional goals i.e. the top-down approach andMBO.

In traditional goals, first, upper level managers (such as the CEO and other executives)

establish the organizational mission and then determine strategic goals. On the lowestlevel, the supervisor and employee agree upon performance objectives, as well as how

goal attainment will be measured. The top-down approach has several advantages. Ithelps guarantee that the goals and objectives of the organization are directly tied to and

support the mission statement. It increases the likelihood that ambitious goals set byupper-level managers will trickle down to lower levels of the organization. However, the

top-down approach has several disadvantages. Oftentimes, members of upper-level

management are so far removed from the day-to-day activities of the employees that thegoals may be overly ambitious and unrealistic. Goals set at the top of the organization donot change as quickly with the organization, so they are not as flexible as goals set at the

bottom of the organization.

Many organizations are using MBO in which a process of setting mutually agreed upon

goals and using those goals to evaluate employee performance. MBO has four specificelements i.e. goal specifying, participative decision making, an explicit time period and

performance feedback. MBO focuses on employees working to accomplish goals theyvehad a hand in setting.

STEPS IN MBO

1. The organization overall objectives and strategies are formulated.2. Major objectives are allocated among division and department units.3. Unit manager collaboratively set specific objectives for their units with their

managers.

4. Specific objectives are collaboratively set with all departments members.5. Action plans, defining how objectives are to be achieved, are specified and agreed

upon by manager and employees.6. The action plans are implemented.7. Progress toward objectives is periodically reviewed, and feedback is provided.8.

Successful achievements of objectives are reinforced by performance basedrewards.


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CHARACTERISTICS OF WELL WRITTEN GOALS

Goals are not written in the same way. Managers should be able to write well writtengoals.

STEPS IN GOAL SETTING

1. Review the organization mission or purpose.2. Evaluate available resources.3. Determine the goals individually or with input from others.4. Write down the goals and communicate them to all who need to know.5. Review results and whether goals are being met.

DEVELOPING PLANS

The process of developing plan is influenced by three factors i.e.

CONTINGENCY FACTORS IN PLANNING

There are three levels of factors contingency factors i.e.

1. Level in Organization2. Degree of Environmental Uncertainty3. Length of Commitment

1) Level in Organization

TOP EXECUTIVE

MIDDLE LEVEL

MANAGERS

FIRS LINE MANAGERS


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2) Degree of Environmental UncertaintyWhen uncertainty is high. Plans should be specific but flexible. At times managers may

even have to abandon the plans. For example, at continental airlines, the former CEO andhis management team established a specific goal of focusing on what customers wanted

most on time in flights. Because of high level of uncertainty, the management team

identified a destination but not a flight plan and changed plans as necessary to achievegoals on time.

3) Length of Commitment

Commitment concept says that plans should extend far enough to meet the commitmentsmade when the plans were developed. Planning for too long or too short a time period is

inefficient and ineffective.An example of the importance of commitments concept can beseen at data centers where companies computer are housed. Many have found their

power hungry computers created challenges. For instance, at Pomona Valley MedicalCentre, the expansion from 30 to 70 servers generated to much heat that the medical

Centre air conditioning system was overwhelmed.

APPROACHES TO PLANNING

A group of planning specialists whose sole responsibility is to help write the various

organizational plans. Under this approach, plans developed by top-level managers flow

down through other organizational levels, much like the traditional approach to goal

setting. As they flow down through the organization, the plans are designed to the

particular needs of each level. Another approach to planning is to involve more

organizational members in the goal attaining process.

CONTEMPORARY ISSUES IN PLANNING

There are two contemporary issues in planning i.e.

1) CRITICISM OF PLANNING

Planning has some basic assumptions that are

1. Planning may create rigidity.2. Plans cannot be developed for a dynamic environment.3. Formal plans cannot replace intuition and creativity.4. Planning focuses managers attention on today competition, not on tomorrow

survival.

5. Formal planning reinforces success, which may lead to failure.6. Just planning isnt enough.


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2) EFFECTIVE PLANNING IN DYNAMIC ENVIRONMENT

y In the dynamic environment, managers should develop plans that are specific butflexible.

y Managers need to recognize that planning is an outgoing process.y Managers need to stay alert to environmental changes that may affect

implementation and respond as needed.

y Making the organizational hierarchy flatter helps make planning more effectivedynamic environment.

y Managers should teach their employees how to set goals and plans to flow downfrom the top.

ch# 7 Foundation of Planning

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