ninth editionninth edition

STEPHEN P. ROBBINSSTEPHEN P. ROBBINS

PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie CookThe University of West AlabamaThe University of West Alabama

MARY COULTERMARY COULTER

Planning & Types of Planning & Types of PlansPlans

Lecture Lecture 1010

L E A R N I N G O U T L I N E L E A R N I N G O U T L I N E Follow this Learning Outline as you read and study this chapter.Follow this Learning Outline as you read and study this chapter.

What Is Planning?What Is Planning?• Define planning.Define planning.• Types (Levels) of PlanningTypes (Levels) of Planning• Strategic PlanningStrategic Planning• Intermediate PlanningIntermediate Planning• Operational PlanningOperational Planning• Planning Process/ ProcedurePlanning Process/ Procedure• Barriers to Effective PlanningBarriers to Effective Planning• Planning PremisesPlanning Premises• ForecastingForecasting• Key to PlanningKey to Planning

What Is Planning?What Is Planning?• PlanningPlanning

Planning is the primary function of management. Planning is the primary function of management.

It focuses on the future course of action.It focuses on the future course of action.

A primary managerial activity that specifies the objectives A primary managerial activity that specifies the objectives

to be achieved in future and selects the alternative course to be achieved in future and selects the alternative course

of action to reach defined objectives. Thus, it involves:of action to reach defined objectives. Thus, it involves:

Defining the organization’s goalsDefining the organization’s goals

Establishing an overall strategy for achieving those goalsEstablishing an overall strategy for achieving those goals

Developing plans for organizational work activities.Developing plans for organizational work activities.

What Is Planning?What Is Planning?

•““Determination of future course of actions Determination of future course of actions

in advance”in advance”

•It is the blue print of action and operation.It is the blue print of action and operation.

•Planning is intellectual process which is Planning is intellectual process which is

concerned with deciding in advance what, concerned with deciding in advance what,

when, why, how, and who shall do the work.when, why, how, and who shall do the work.

Definitions:Definitions:

• “ “Generally speaking, planning is deciding in Generally speaking, planning is deciding in advance what is to be doneadvance what is to be done” ”

-W H Newman-W H Newman

•““Planning is deciding in advance what to do, how Planning is deciding in advance what to do, how to do, when to do and who is to do it. Planning to do, when to do and who is to do it. Planning bridges a gap between from where we are to bridges a gap between from where we are to where we want to go” where we want to go”

-Harold, Koontz and O’Donnel-Harold, Koontz and O’Donnel

•““Planning is that function of manner in which he Planning is that function of manner in which he decides in advance what he will do. It is a decides in advance what he will do. It is a decision making process of a special kind, its decision making process of a special kind, its essence is futurity.”essence is futurity.”

-Hayness and Massie-Hayness and Massie

Why Do Managers Plan?Why Do Managers Plan?• Purposes of PlanningPurposes of Planning

Provides directionProvides direction Reduces uncertaintyReduces uncertainty Minimizes waste and redundancyMinimizes waste and redundancy Sets the standards for controllingSets the standards for controlling

• Benefits of planningBenefits of planning Goal FocusGoal Focus Minimize UncertaintyMinimize Uncertainty Improve efficiency Improve efficiency Facilitates to ControlFacilitates to Control Innovation and CreativityInnovation and Creativity Better CoordinationBetter Coordination Ensures CommitmentEnsures Commitment Aid to Business SuccessAid to Business Success Brings Systematization Brings Systematization

REDUNDANCY<===> अति�रि�क्त��

How Do Managers Plan?How Do Managers Plan?

• Elements of PlanningElements of Planning Goals (also Objectives)Goals (also Objectives)

Desired outcomes for individuals, groups, or entire Desired outcomes for individuals, groups, or entire organizationsorganizations

Provide direction and evaluation performance criteriaProvide direction and evaluation performance criteria

PlansPlans Documents that outline how goals are to be accomplishedDocuments that outline how goals are to be accomplished

Describe how resources are to be allocated and establish Describe how resources are to be allocated and establish activity schedulesactivity schedules

Types of PlansTypes of Plans

Types of PlansTypes of Plans

• Strategic PlansStrategic Plans Apply to the entire organization.Apply to the entire organization.

Establish the organization’s overall goals.Establish the organization’s overall goals.

Seek to position the organization in terms of its Seek to position the organization in terms of its environment.environment.

Cover extended periods of time.Cover extended periods of time.

• Operational PlansOperational Plans Specify the details of how the overall goals are to be Specify the details of how the overall goals are to be

achieved.achieved.

Cover short time period.Cover short time period.

Types of Plans (cont’d)Types of Plans (cont’d)

• Long-Term PlansLong-Term Plans Plans with time frames extending beyond three yearsPlans with time frames extending beyond three years

• Short-Term PlansShort-Term Plans Plans with time frames on one year or lessPlans with time frames on one year or less

• Specific PlansSpecific Plans Plans that are clearly defined and leave no room for Plans that are clearly defined and leave no room for

interpretationinterpretation

• Directional PlansDirectional Plans Flexible plans that set out general guidelines, provide Flexible plans that set out general guidelines, provide

focus, yet allow discretion in implementation.focus, yet allow discretion in implementation.

DISCRETION<===> ति�चा��शी�ल��

Exhibit 7–3Exhibit 7–3 Specific Versus Directional PlansSpecific Versus Directional Plans

Types of Plans (cont’d)Types of Plans (cont’d)

• Single-Use PlanSingle-Use Plan A one-time plan specifically designed to meet the A one-time plan specifically designed to meet the

need of a unique situation.need of a unique situation.

• Standing PlansStanding Plans Ongoing plans that provide guidance for activities Ongoing plans that provide guidance for activities

performed repeatedly.performed repeatedly.

Establishing Goals and Developing PlansEstablishing Goals and Developing Plans

• Traditional Goal SettingTraditional Goal Setting Broad goals are set at the top of the organization.Broad goals are set at the top of the organization. Goals are then broken into sub-goals for each Goals are then broken into sub-goals for each

organizational level.organizational level. Assumes that top management knows best because Assumes that top management knows best because

they can see the “big picture.”they can see the “big picture.” Goals are intended to direct, guide, and constrain from Goals are intended to direct, guide, and constrain from

above.above. Goals lose clarity and focus as lower-level managers Goals lose clarity and focus as lower-level managers

attempt to interpret and define the goals for their areas attempt to interpret and define the goals for their areas of responsibility.of responsibility.

Exhibit 7–4Exhibit 7–4 The Downside of Traditional Goal SettingThe Downside of Traditional Goal Setting

Exhibit 7–7Exhibit 7–7 Planning in the Hierarchy of OrganizationsPlanning in the Hierarchy of Organizations

Contemporary Issues in PlanningContemporary Issues in Planning

• Criticisms of PlanningCriticisms of Planning

Planning may create rigidity.Planning may create rigidity.

Plans cannot be developed for dynamic Plans cannot be developed for dynamic environments.environments.

Formal plans cannot replace intuition and creativity.Formal plans cannot replace intuition and creativity.

Planning focuses managers’ attention on today’s Planning focuses managers’ attention on today’s competition not tomorrow’s survival.competition not tomorrow’s survival.

Formal planning reinforces today’s success, which Formal planning reinforces today’s success, which may lead to tomorrow’s failure.may lead to tomorrow’s failure.

Establish objectives

Develop Strategies

Determination of premises

Determination of alternatives

Evaluation of alternatives

Selecting a course of action

Formulation of derivative plans

Implantation of plans

Reviewing the planning process

How does a manager Plan?Planning Process:

Analyze OpportunitiesAnalyze Opportunities

• Not a step of Planning, It is pre-step of planning.Not a step of Planning, It is pre-step of planning.• Essential to make a successful plan.Essential to make a successful plan.• SWOT analysisSWOT analysis

Setting objectivesSetting objectives

• First and real starting point of planning.First and real starting point of planning.• Management has to define objectives in clear manner by Management has to define objectives in clear manner by

considering organizational resources and opportunities considering organizational resources and opportunities because abecause a minor mistake in setting objectives might minor mistake in setting objectives might affect in implementation of plan.affect in implementation of plan.

• Objectives must be specific, clear and practical.Objectives must be specific, clear and practical.• They should be time bound and expressed in numerical They should be time bound and expressed in numerical

terms.terms.

Determination of premisesDetermination of premises• Premises are the assumptions about the future in which the Premises are the assumptions about the future in which the

planning is implemented.planning is implemented.

• They provide environment and boundaries for the They provide environment and boundaries for the implementation of plan in practical operation.implementation of plan in practical operation.

• These premises may be tangible and intangible and external.These premises may be tangible and intangible and external.

(a)(a) Tangible and intangible: Tangible and intangible: Tangible premises involve Tangible premises involve capital investment, unit of production, units sold, cost per unit, capital investment, unit of production, units sold, cost per unit, time available etc. Similarly, intangible premises involve time available etc. Similarly, intangible premises involve employees moral, goodwill, motivation, managerial attitude, employees moral, goodwill, motivation, managerial attitude, etc.etc.

(b)(b) IInternal and external: nternal and external: Internal premises involve Internal premises involve money, materials, machines and managements. In the similar money, materials, machines and managements. In the similar manner, external factors involve competitors strategy, manner, external factors involve competitors strategy, technological change, government policy, social and cultural technological change, government policy, social and cultural beliefs etc.beliefs etc.

Determination of alternativesDetermination of alternatives

• It is essential to identify all the possible hidden It is essential to identify all the possible hidden alternatives. The information about alternative alternatives. The information about alternative courses of action may be obtained from primary courses of action may be obtained from primary and secondary sources. There must be search and secondary sources. There must be search for the best alternative. The management must for the best alternative. The management must develop alternatives through the support of develop alternatives through the support of experienced and intellectual experts in experienced and intellectual experts in management sectors.management sectors.

Evaluation of alternativesEvaluation of alternatives

• Evaluate the alternatives from their expected Evaluate the alternatives from their expected cost and benefits. This is the logical step to cost and benefits. This is the logical step to evaluate each alternative from its plus and evaluate each alternative from its plus and minus points.minus points.

• Each alternative is studied and evaluated in Each alternative is studied and evaluated in terms of some common factors such as risk, terms of some common factors such as risk, responsibility, planning premises, resources, responsibility, planning premises, resources, technology etc.technology etc.

Selecting a course of actionSelecting a course of action

Formulation of derivative plans:Formulation of derivative plans:

• It is essential to formulate action or derivative It is essential to formulate action or derivative plans for each step of work and to all plans for each step of work and to all departments of the organization. These action departments of the organization. These action plans involve formulation of policies, rules, plans involve formulation of policies, rules, schedule and budget to complete defined schedule and budget to complete defined objectives. Thus, formulation of derivative plans objectives. Thus, formulation of derivative plans is an essential step in planning process. It is is an essential step in planning process. It is difficult to implement main plan without difficult to implement main plan without formulation of derivative plan.formulation of derivative plan.

Implantation of plansImplantation of plans

• Without this step, other this procedure of plan will remain Without this step, other this procedure of plan will remain as paper work.as paper work.

• This step brings all the procedure of plan into action.This step brings all the procedure of plan into action.• For implementation plan, management has to take some For implementation plan, management has to take some

steps such as to communicate with subordinates who steps such as to communicate with subordinates who initiate to plan into action; provide necessary instruction initiate to plan into action; provide necessary instruction and guidance; make arrangement of all resources like and guidance; make arrangement of all resources like materials, machines, money, equipments etc; make materials, machines, money, equipments etc; make timely supervision and control over subordinates.timely supervision and control over subordinates.

Reviewing the planning processReviewing the planning process

Terms to KnowTerms to Know

• PlanningPlanning• GoalsGoals• PlansPlans• Stated goalsStated goals• Real goalsReal goals• FramingFraming• Strategic plansStrategic plans• Operational plansOperational plans• Long-term plansLong-term plans• Short-term plansShort-term plans• Specific plansSpecific plans

• Directional plansDirectional plans• Single-use planSingle-use plan• Standing plansStanding plans• Traditional goal settingTraditional goal setting• Means-ends chainMeans-ends chain• MissionMission• Formal planning Formal planning

departmentdepartment

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