Planning
It is the process of thinking regarding the activities required to achieve a desired [Link] involves
setting objectives, identifying tasks, and allocating resources. Planning is a fundamental part of
management.
Planning in management is when a company's leadership team creates goals and outlines the steps
they may follow to reach those goals.
Managers plan by assessing their organization's goals and creating a detailed plan to achieve them.
This plan includes setting goals, allocating resources, and defining roles and responsibilities.
How Managers Plan:
Steps in the management planning process
Define goals: Set short-term and long-term goals for the organization
Analyze the situation: Consider the organization's current state and any potential challenges
Allocate resources: Determine how to best use the organization's resources to achieve its goals
Create a timeline: Establish a schedule for completing tasks and achieving goals
Define roles: Assign responsibilities to team members
Identify actions: Break down the plan into smaller tasks and determine how to accomplish them
Monitor and adjust: Regularly review the plan and make changes as needed to ensure goals are
met.
Types of Plans:
The most popular ways to describe organizational plans are breadth (strategic versus operational),
time frame (short term versus long term), specificity (directional versus specific), and frequency of
use (single use versus standing).
[Link] Plans
● Apply to the entire organization.
● Establish the organization’s overall goals.
● Seek to position the organization in terms of its environment.
● Cover extended periods of time.
2. Operational Plans
● Specify the details of how the overall goals are to be achieved.
● Cover a short time period.
3. Long-Term Plans
● Plans with time frames extending beyond three years
4. Short-Term Plans
● Plans with time frames on one year or less
5. Specific Plans
● Plans that are clearly defined and leave no room for interpretation
6. Directional Plans
● Flexible plans that set out general guidelines, provide focus, yet allow discretion in
implementation.
7. Single-Use Plan
● A one-time plan specifically designed to meet the need of a unique [Link] instance,
when Walmart wanted to expand the number of its stores in China, top-level executives
formulated a single-use plan as a guide.
8. Standing Plans
● Ongoing plans that provide guidance for activities performed repeatedly. Standing plans
include policies, rules, and procedures.
Goals:
“Goals are broad, long-term accomplishments aligned to the company mission and vision.”
“The act of stating clearly what you want to achieve or what you want someone else to achieve.”
Types of Goals:
Financial Goals
Are related to the expected internal financial performance of the organization.
Strategic Goals
Are related to the performance of the firm relative to factors in its external environment (e.g.,
competitors).
Stated Goals versus Real Goals
Broadly-worded official statements of the organization (intended for public consumption) that may be
irrelevant to its real goals (what actually goes on in the organization).
stated goals— which can be found in an organization’s charter, annual report, public relations
announcement.
Real goals : —those goals an organization actually pursues—observe what organizational members
are doing. Actions define priorities.
How can managers plan effectively:
Managers can plan effectively by establishing goals, identifying resources, and creating action plans.
They can also consider risks, manage costs, and monitor progress.
Set goals
Define the company's goals and objectives
Consider the external environment and internal capabilities
Identify resources
Determine what resources are needed to achieve goals
Consider human resources, finance, materials, and information
Create action plans
Create tasks related to goals, Assign tasks and timelines, Establish evaluation methods, and
Develop a contingency plan.
Manage risks
Identify, assess, and control risks that could impact the business
Develop risk mitigation strategies
Manage costs
Include a budget and expenditures section in the plan
Identify who is responsible for managing costs
Monitor progress
Track costs and allocate resources
Make informed decisions to keep the project on track
Manage change
Define the objectives, scope, and expectations of the change
Engage employees, customers, and leaders in the change management process
Traditional Goal Setting
Broad goals are set at the top of the organization.
Goals are then broken into subgoals for each organizational level.
Assumes that top management knows best because they can see the “big picture.”
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.
Traditional goal setting Theory is a method of setting objectives that are broad and long-term, and
that are often difficult to measure. The theory suggests that setting clear, specific, and challenging
goals can improve motivation and performance.
Principles of traditional goal setting
1. Clarity: Goals should be clear and specific so that there's less room for confusion and more
potential for higher performance.
2. Measurability: Goals should be measurable so that progress can be tracked.
3. Commitment: Goals should be committed to so that they can be celebrated when achieved.
4. Challenge: Goals should be challenging but realistic so that they're more motivating.
5. Feedback: Feedback can help regulate goals and improve performance.
Benefits of traditional goal setting
Goal setting can help improve performance and motivation.
Goal setting can help provide direction for employees.
Goal setting can help create a more precise working scenario for employees.
Management By Objectives (MBO):
Management by Objectives (MBO) is a strategic approach to enhance the performance of an
organization. It is a process where the goals of the organization are defined and conveyed by the
management to the members of the organization with the intention to achieve each objective.
● 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.
● Key elements of MBO:
Goal specificity, participative decision making, an explicit performance/evaluation period,
feedback
Steps in Management by Objectives Process
1. Define organization goals
Setting objectives is not only critical to the success of any company, but it also serves a variety of
purposes. It needs to include several different types of managers in setting goals.
2. Define employee objectives
Once the employees are briefed about the general objectives, plan, and the strategies to follow, the
managers can start working with their subordinates on establishing their personal objectives.
3. Continuous monitoring performance and progress
Though the management by objectives approach is necessary for increasing the effectiveness of
managers, it is equally essential for monitoring the performance and progress of each employee in
the organization.
4. Performance evaluation
Within the MBO framework, the performance review is achieved by the participation of the managers
concerned.
5. Providing feedback
In the management by objectives approach, the most essential step is the continuous feedback on
the results and objectives, as it enables the employees to track and make corrections to their
actions.
6. Performance appraisal
Performance reviews are a routine review of the success of employees within MBO organizations.
Steps in Goal Setting:
Review the organization’s mission statement.
Do goals reflect the mission?
Evaluate available resources.
Are resources sufficient to accomplish the mission?
Determine goals individually or with others.
Are goals specific, measurable, and timely?
Write down the goals and communicate them.
Is everybody on the same page?
Review results and whether goals are being met.
What changes are needed in mission, resources, or goals?
