1 foundation of planning. 2 what is planning? a primary functional managerial activity that...
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FOUNDATION OF PLANNING
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What Is Planning?
A primary functional managerial activity that involves: Defining the organization’s goals Establishing an overall strategy for achieving those goals Developing a comprehensive set of plans to integrate and
coordinate organizational work. Types of planning
Informal: not written down, short-term focus; specific to an organizational unit.
Formal: written, specific, and long-term focus, involves shared goals for the organization.
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Why Do Managers Plan?
Provides direction Reduces uncertainty Minimizes waste and redundancy Sets the standards for controlling
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How Do Managers Plan?
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
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Characteristics of Well-Designed Goals Written in terms of
outcomes, not actions Focuses on the ends, not
the means. Measurable and
quantifiable Specifically defines how the
outcome is to be measured and how much is expected.
Clear as to time frame How long before measuring
accomplishment.
Challenging yet attainable Low goals do not motivate. High goals motivate if they
can be achieved. Written down
Focuses, defines, and makes goal visible.
Communicated to all Puts everybody “on the
same page.”
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Example of Company’s Goals
Example 1: Company’s goals for 2015 Become internationally recognized Improve product quality Increase revenue and profit Improve customer’s satisfaction
Example 2: A production team Improve quality Improve productivity Ensure high safety level
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Procter & Gamble’s OGSM Technique
What needs to be done Objectives
written statement of compelling business needs Goals
numerical target and scorecard to track progress toward meeting objectives
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Procter & Gamble’s OGSM Technique (cont.)
How we will achieve our objectives Strategies
written statement of specific actions that must be taken to meet objectives
Measures numerical measures to track progress on executing
specific actions
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Balanced Goals from Different Perspectives Financial Perspective
Profitability, Return on Investment Customer Perspective
Satisfaction, market share, repeated customers Internal Perspective
System, operation, capability Learning Perspective
New technology, management, ideas,
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Characteristics of Good Plan
Prediction of environmental trends Scenarios
Goals SMART: specific, measurable, attainable, realistic,
and time Resources
Feasible but stretching Actions
Specific, clear, integrated, fit with goals Changes: flexible and creative
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Example: A Business Plan
Business objectives Functional objectives:
Finance, marketing, HR, production, R&D, ... Resources
Finance, HR, management, IT, ... Actions
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Case: Bookstore
From Management and Planning perspective, explain:
Why the Bookstore succeeded in early days? Why did it fail later? What do you learn?
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Team Project: Your Team’s Goals and Plans
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