ch3 foundations of planning.pptx
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Ch 3:Foundationsof planning
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What is the planning ?
The process of outlining the activities that arenecessary to achieve the goals of the
organization.
Two major items in planning :-
1. Setting goals or objectives
2. Listing or ientifying activities to reach thesegoals ! "ow to reach these goals# $
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What is the plan ?
%s a specific ocumente intention consisting of anobjective !en$ an an action statement !means $.
State what & when & how & something to be one.
'otes :-
(lanning is a future oriente.
(lanning is often calle the primarymanagement function.
(lan is the en result of planning process.
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Purpose ofPlanning
The purpose of planning is simple - to ensurethat the organization is both effective and
efficient in its activities.
What ? ( objectives)
How ? (method)
When ? ( time frame )
Where ? (place)
Who ? (responsibilit)
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Reasons (Benets) ofPlanning
1. )etter *oorination –!lanning provides a founation for the
coorination of a broad range oforganizational activities.
–" plan helps to efine the responsibilities of
iniviuals an wor+ groups and helpscoordinate their activities.
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2. ,ocus on ,orwar Thin+ing
–The planning function forces managers to
thin+ ahea and consider resource nees
and potential opportunities or threats that the organization ma face in the future.
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. (articipatory or+ /nvironment –#uccessful planning re$uires the participation of
a wide range of organizational members. This
creates a more participator wor% environment.
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0 participatory wor+ environment is goo
for two reasons:
The organizationbenefts by havingaccess to a broad
base of experienceand no!ledge in
the planning process.
The organizationbenefts by havingaccess to a broad
base of experienceand no!ledge in
the planning process.
Organizationalmembers are more
likely to "bu# in$ to a
plan that the# ha%ehelped de%elop.
Organizationalmembers are more
likely to "bu# in$ to a
plan that the# ha%ehelped de%elop.
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. ore /ffective *ontrol System
–"n organization&s plan provides a
founation for control. " plan provides amechanism for ensuring that the
organization is moving in the right
irection and ma%ing progress towardachieving its goals.
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Costs of
Planning1. anagerial Time
– 'one properl the planning process re$uires a
substantial amount of managerial time and energ.
2. 3elay in 3ecision a+ing
–!lanning can result in delas in decision ma%ingwhich must be weighed against the importance of
speed in response time. of speed in response time
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Weighing the Benets &gainstthe Costs of Planning
%n the final analysis& managers plan because
planning leas to higher performance. (lanningalso helps managers cope with the many
comple4 situations they face.
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For'al planning andorganiational perfor'ance
For'al planning generally results in:
– Higher profts – Higher return on assets
– Improved quality o planning
– ppropriate implementation o the plan
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Criticis's of For'alPlanningFor'al planning may:
!. "reate rigidity
#. $eplace intuition and creativityote: planning should enhance and supportintuition and creativity .
%. &ocus managers' attention on today'scompetition( not on tomorro)'s survival
*. $einorce success( )hich may lead to ailure
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Where *oes Planning +tart?
Which "pproach is etter - Top-'own or
ottom-*p?
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–Top-own planning
the advantage is that the top managers who are the
most %nowledgeable about the firm as a whole drive
the development of the plan
–0 bottom-up approachThe primar advantages is that the people closes to
operating sstems customers and suppliers drive the
development of the plan .
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Planning as a ,ining-echanis'
+oals+oals "ontrol"ontrol,lans,lans
$elationship among goals(plans( and controls
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+etting .oals and*e%eloping Plans
5oals !objectives$ : are desired outcomes
or targets
'ote that :-
The guide manger&s decisions and form
the criteria against which results are
measured .
(lanning 6 5oals 7 (lans
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(lans : are ocuments that outline how
goals are going to be met .
'ote that :-
The usuall include resource allocations
budgets schedules and other necessar
actions to accomplish the goals.
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+teps in goal setting
!. $evie) the organization'smission and employees' key -obtasks.
#. valuate available resources.
%. /etermine the goalsindividually or )ith input rom
others.
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*. 0ake sure goals are )ell1)ritten
and then communicate them toall )ho need to kno).
2. 3uild in eedback mechanisms toassess goal progress.
4. 5ink re)ards to goal attainment.
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+etting .oals
+oals can be set either through aprocess o :
/0 1raditional goal setting20 -anage'ent b# obecti%es
(-B4)
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/0 1raditional goal setting : goals set by topmangers 6o) do)n through the
organization and become sub goals or eachorganizational area
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rence bet!een goals and obec
4becti%es : state )hat is to beaccomplished in singular ( specifc (and measurable terms )ith a targetdate .
.oals : are general target to beaccomplished that are translated into
actionable ob-ectives
ote that :
+oals include ob-ectives ( or goals are
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Characteristics of e5ecti%egoals settings
!. 7pecifc and measurable
#. /efned time rame
%. "over key result area*. "hallenging but realistic
2. 5inked to re)ards
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+0-0&0R010 .oals are6
7pecifc0easurable
ttainable$ealistic
Timely
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1#pes of planning (plans)
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1he 'anagerial
p#ra'id
Planning horion
1op 'anage'ent"hie e8ecutive+eneral managers
+trategic planning! to !9 years
-iddle 'anage'ent&unctional managers
,roduct line/epartment heads
1actical intermediate ; planning
4 months to # years
,o!er 'anage'ent
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1#pes of plans ( fre7uenc# ofuse )
1. Staning (lans
"re designed to deal with organizationalissues or problems that recur fre$uentl.
#tanding plans include policies procedures
and rules
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(olicies - general guidelines that
govern how certain organizational
situations will be addressed.
(roceures - are more specific andare designed to give e+plicit
instructions on how to complete a
recurring tas%. 8ules - provide detailed and specific
guidelines for action.
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2. Single-9se (lans
– developed for handling non repetitive situation. – #ingle-use plans include programs and budgets .
•(rograms , a set of activities that are designedto accomplish an objective over a specific period
of time .
•)ugets , represent the funds allocated tooperate a unit for a fi+ed period of time
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8dentif# each t#pe of plan b#categories
+tanding plan : a9 polic# b9procedure c9 rule+ingle9use plan : d9progra' e9budget
. ualit is job one ( ford motor compan)
/. !resident john f.%enned0s plan to land someone on
the moon
%. ho) much )ill it cost to operate yourdepartment ne8t month
*. =earing saety glasses )hile touring the
actory2. &orms or leaves o absence must be
approved by the managers andsubmitted to the personnel o>ce one
month in advance o their e?ective
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•Contingency Plans
–Alternative plans to be implemented ifuncontrollable events occur.
–Developing a contingency plan
• What might go wrong in my department?• How can I prevent it from happening?
• If it does occur, what can I do to minimie its effect?
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*ontingency planning : reuires theevelopment of two or more plans& each
of which is base on a ifferent set of
strategic or operating conitions that
coul occur.
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• hen is *ontingency (lanning 'eee#
1ontingenc planning is necessar in
business environments that change rapily
an in unpreictable ways.
1ontingenc planning is useful when a
firm;s effectiveness is epenent on a
particular set of business conitions.
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