Professional Documents
Culture Documents
Planning Defined
Process of outlining the activities that are
necessary to achieve the goals of the organization.
Plan
Blueprint for action that prescribes the activities
necessary for an organization to realize their goals.
Purpose of Planning
To ensure that the organization is both effective
and efficient in its activities.
Goals and Controls
Goals
Provide a clear, engaging sense of direction and
specify what is to be accomplished.
Control
Monitor the extent to which goals have been
achieved and ensure the organization is moving in
the right direction.
Figure 4.1 Planning as a Linking Mechanism
The Benefits of Planning
Better Coordination
Planning provides a foundation for the coordination
of a broad range of organizational activities.
A plan helps to define the responsibilities of
individuals and work groups and helps coordinate
their activities.
Top-Down Planning
Planning efforts begin with
the board of directors and top
executives of the firm
Bottom-Up Planning
Planning is initiated at the
lowest level in the
organization
Advantages of Each Planning Approach
Top-Down Planning
Top managers, who are the most knowledgeable
about the firm as a whole, drive the development of
the plan.
Bottom-Up Planning
The people closest to the operating system,
customers, and suppliers drive the development of
the plan.
Top-Down Bottom-Up
Role of As the plan moves down the Units develop goals and plans. As plans
organizational hierarchy, units determine actions move up the hierarchy, they are
evaluated
unit needed to support the plan. and adjusted for accuracy and feasibility.
Strategic Plans
Are to move the organization from where it is to
where it wants to be.
eg. Markets; Customers; products and services delivery to the
market
Operational Planning
Operational Planning
Focuses on the day-to-day activities that are
necessary to achieve the long-term goals of the
organization.
Operational Plans
Are more specific, address shorter-term issues, and
are formulated by mid- and lower-level managers
Can be categorized as either standing or single-use
plans.
Standing Plans
Standing Plans
Designed to deal with organizational issues or
problems that recur frequently. They include:
Policies: general guidelines that govern how
certain organizational situations will be addressed.
Procedures: more specific and are designed to
give explicit instructions on how to complete a
recurring task.
Rules: provide detailed and specific guidelines
and limits for action.
Single-Use Plans
Single-Use Plans
Are developed to address a specific organizational
situation. They include:
Programs: govern a relatively comprehensive set
of activities that are designed to accomplish a
particular set of goals.
Projects:direct the efforts of individuals or work
groups toward the achievement of specific, well-
defined objectives.
Budgets: specify how financial resources should
be allocated.
Individual Plans
Organizations nowadays are looking for ways to
translate boarder organizational plans to the level
of individual employees.
Two approaches for doing so include:
Management by Objectives
The Balanced Scorecard
Figure 4.2 Management by Objectives: The Cycle