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Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education, Inc. publishing as Prentice Hall 8-1
• Define the nature and purpose of planning
• Classify the types of goals organizations might have
and the plans they use
• Compare and contrast approaches to goal-setting and
planning
• Discuss contemporary issues in planning
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education, Inc. publishing as Prentice Hall 8-2
What Is Planning?
• Planning - a primary managerial activity that
involves:
– Defining the organization’s goals
– Establishing an overall strategy for achieving
those goals
– Developing plans for organizational work
activities
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-3
Formal Planning
• Formal planning
– Specific goals covering a specific time period
– Written and shared with organizational members
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-4
Why Do Managers Plan?
• Purposes of Planning
– Provides direction (what is required by work unit)
– Managers and nonmanagers alike
– Reduces uncertainty( ready for change) look ahead
– Minimizes waste and redundancy
– Sets the standards for controlling
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-5
Planning and Performance
• Formal planning is associated with:
– Higher profits and returns on assets
– Positive financial results
– The quality of planning and implementation
affects performance more than the extent of
planning
– The external environment can reduce the impact
of planning on performance(govt regulations,
labor unions)
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-6
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
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-7
Types of Goals
• Financial Goals - related to the expected
internal financial performance of the
organization.
• Strategic Goals - related to the performance
of the firm relative to factors in its external
environment (e.g., competitors).(new hiring,
new branches)
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-8
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education, Inc. publishing as Prentice Hall 8-9
Types of Plans
• Strategic Plans
– Establish the organization’s overall goals
– Seek to position the organization in terms of its
environment
– Cover extended periods of time
• Operational Plans
– Specify the details of how the overall goals are to
be achieved
– Cover a short time period
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-10
Types of Plans
• Long-Term Plans
– Time frames extending beyond three years. 5
years plan south korea
• Short-Term Plans
– Time frames of one year or less.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-11
Types of Plans
• Specific Plans
– Plans that are clearly defined and leave no room
for interpretation.(unit output 8hous for
12months-specificprocedures,budget)
• Directional Plans
– Flexible plans that set out general guidelines and
provide focus, yet allow discretion in
implementation.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-12
Types of Plans
• Single-Use Plan
– A one-time plan specifically designed to meet the
need of a unique situation. coronavirus
• Standing Plans
– Ongoing plans that provide guidance for activities
performed repeatedly.(rules,policies,procedures)
• Floods, earthquakes
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-13
Traditional Goal Setting
• Broad goals are set at the top of the
organization.
• Goals are then broken into sub-goals for each
organizational level.
• Goals are intended to direct, guide, and
constrain from above.
• Goals lose clarity and focus as lower-level
managers attempt to interpret and define the
goals for their areas of responsibility.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-14
Exhibit 8-2: The Downside
of Traditional Goal Setting
Degree goal
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter ©2012 Pearson Education, Inc. publishing as Prentice Hall
Publishing as Prentice Hall 8-15
Maintaining the Hierarchy of Goals
• Means-Ends Chain
– The integrated network of goals that results from
establishing a clearly-defined hierarchy of
organizational goals.
– Achievement of lower-level goals is the means by
which to reach higher-level goals (ends).
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-16
Management By Objectives (MBO)
• Specific performance goals are jointly
determined by employees and managers.
• Progress toward accomplishing goals is
periodically reviewed.
• Rewards are allocated on the basis of
progress towards the goals.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-17
Management By Objectives (MBO)
• Key elements of MBO: MBO motivate
– goal specificity
– participative decision making
– an explicit performance/evaluation period
– feedback
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-18
Exhibit 8-3:
Steps in a Typical MBO Program
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education, Inc. publishing as Prentice Hall 8-19
Does MBO Work?
• Reason for MBO Success
– Top management commitment and involvement
• Potential Problems with MBO Programs
– Are less effective in dynamic environments that
require constant resetting of goals
– Overemphasis on individual accomplishment may
create problems with teamwork
– Allowing the MBO program to become an annual
paperwork shuffle
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-20
Exhibit 8-4:
Well-Written Goals
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education, Inc. publishing as Prentice Hall 8-21
Steps in Goal Setting
1. Review the organization’s mission statement.
Do goals reflect the mission? Do goals represents
org mission
2. Evaluate available resources. Arab money not
knowledge
Are resources sufficient to accomplish the mission?
3. Determine goals individually or with others.
Are goals specific, measurable, and timely?
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-22
Steps in Goal Setting
4. Write down the goals and communicate
them.
Is everybody on the same page?
5. Review results and whether goals are being
met.
What changes are needed in mission, resources, or
goals?
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-23
Contingency Factors in Planning
• Manager’s level in the organization
– Strategic plans at higher levels
– Operational plans at lower levels
• Degree of environmental uncertainty
– Stable environment: specific plans
– Dynamic environment: specific but flexible plans
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-24
Contingency Factors in Planning
• Length of future commitments
– Commitment Concept: Current plans affecting
future commitments must be sufficiently long-
term in order to meet those commitments.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-25
Exhibit 8-5:
Planning in the Hierarchy Organizations
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education, Inc. publishing as Prentice Hall 8-26
Approaches to Planning
• Establishing a formal planning department
top-down planning
– Create a group of planning specialists that help
managers write organizational plans.
– Planning is a function of management; it should
never become the sole responsibility of planners.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-27
Approaches to Planning
• Involving organizational members in the
process cross functional planning
– Plans are developed by members of organizational
units at various levels and then coordinated with
other units across the organization.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-28
Criticisms of Planning
• Planning may create rigidity. Things may change
• Plans cannot be developed for dynamic
environments. Must be flexible
• Formal plans cannot replace intuition and
creativity. Steve jobs apple creativity
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-29
Criticisms of Planning
• Planning focuses managers’ attention on
today’s competition—not tomorrow’s survival.
• Formal planning reinforces today’s success,
which may lead to tomorrow’s failure. Once
winning not necessary to win all time
• Planning isn’t enough. Quick and effective
actions needed
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-30
Planning in Dynamic Environments
• Develop plans that are specific but flexible.
• Understand that planning is an ongoing
process.
• Change plans when conditions warrant
alterations.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-31
Planning in Dynamic Environments
• Persistence in planning eventually pays off.
• Flatten the organizational hierarchy to foster
the development of planning skills at all
organizational levels.
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice©2012
HallPearson Education, Inc. publishing as Prentice Hall 8-32
Terms to Know
• planning • directional plans
• goals • single-use plan
• plans • standing plans
• stated goals • traditional goal setting
• real goals • means-ends chain
• framing • management by objectives
• strategic plans (MBO)
• operational plans • mission
• long-term plans • commitment concept
• short-term plans • formal planning
• specific plans department
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education, Inc. publishing as Prentice Hall 8-33
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education, Inc. publishing as Prentice Hall 8-34
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