Planning Processes and Techniques

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Study Questions

Why and how do managers plan? What types of plans do managers

use? What are the useful planning tools

and techniques? How can plans be well implemented?

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Study Question 1: Why and how do managers plan?

Planning The process of setting objectives and

determining how to best accomplish them.

Objectives Identify the specific results or desired

outcomes that one intends to achieve.

Plan A statement of action steps to be taken in

order to accomplish the objectives.

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Study Question 1: Why and how do managers plan?

Steps in the planning process: Define your objectives.

Determine where you stand vis-à-vis objectives.

Develop future plans according to conditions.

Analyze and choose among action alternatives.

Implement the plan and evaluate results.

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Figure 7.1 The roles of planning and controlling in the management process.

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Study Question 1: Why and how do managers plan?

Benefits of planning: Improves focus and flexibility.

Improves action orientation (results,

priority, advantage & change orientation).

Improves coordination.

Improves time management.

Improves control.

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Study Question 1: Why and how do managers plan?

Personal Time Management Tips: DO say “no” to requests that distract

from what you should be doing.

DON’T get bogged down in details that

can be addressed later.

DO screen telephone calls, emails, and

meeting requests.

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Study Question 1: Why and how do managers plan?

Personal Time Management Tips: DON’T let drop-in visitors or instant

messages use up your time

DO prioritize your important and urgent

work

DON’T become calendar bound by letting

others control your schedule

DO follow priorities; do most important

and urgent work first.

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Study Question 2: What types of plans do managers use?

Short-range and long-range plans Short-range plans = 1 year or less

Intermediate-range plans = 1 to 2 years

Long-range plans = 3 or more years

People vary in their capability to deal effectively with different time horizons.

Higher management levels focus on longer time horizons.

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Study Question 2: What types of plans do managers use?

Strategic and operational plans Strategic plans — set broad, comprehensive, and

longer-term action directions for the entire organization.

Operational plans — define what needs to be done in specific areas to implement strategic plans.

Production plans Financial plans Facilities plans Marketing plans Human resource plans Logistic plans

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Study Question 2: What types of plans do managers use?

Policies and procedures Standing plans

Policies and procedures that are designed for repeated use.

Policy Broad guidelines for making decisions and taking

action in specific circumstances.

Rules or procedures Plans that describe exactly what actions are to be

taken in specific situations.

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Study Question 2: What types of plans do managers use?

Budgets and project schedulesSingle-use plans

Only used once to meet the needs and objectives of a well-defined situation in a timely manner.

Budgets Single-use plans that commit resources to

activities, projects, or programs. Fixed, flexible, and zero-based budgets.

Projects One-time activities that have clear beginning

and end points. Project management and project schedules.

Budget

Fixed Allocates a stated amount of resources for a specific

purpose e.g. Rs. 200000 for equipment purchase in a given year

Flexible Allows resources to vary in proportion with level of

activities e.g. having funds for temporary employees if needed

Zero-based In zero-based budget each new budget period is

approached as a budgeting for a brand event

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Projects

Project Management Project management ensures that

activities required to complete a project are planned well and accomplished on time

Project Schedule Project schedule consists of a list of

projects terminal elements with intended start and finish dates

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Study Question 3: What are the useful planning tools and techniques?

Forecasting Making assumptions about what will happen in

the future. Qualitative forecasting uses expert opinions. Quantitative forecasting uses mathematical

and statistical analysis. All forecasts rely on human judgment. Planning involves deciding on how to deal with

the implications of a forecast.

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Study Question 4: How can plans be well implemented?

Gantt charts – graphic display of scheduled tasks required to complete a project

CPM/PERT – a combination of the critical path method and the program evaluation and review technique

Critical path – pathway from project start to finish that involves activities with the longest completion times

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Study Question 3: What are the useful planning tools and techniques?

Contingency planning Identifying alternative courses of action

that can be implemented to meet the needs of changing circumstances.

Contingency plans anticipate changing conditions.

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Study Question 3: What are the useful planning tools and techniques?

Scenario planning A long-term version of contingency

planning.

Identifying alternative future scenarios.

Plans made for each future scenario.

Increases organization’s flexibility and

preparation for future shocks.

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Study Question 3: What are the useful planning tools and techniques?

Benchmarking

Use of external comparisons to better

evaluate current performance and

identify possible actions for the future.

Adopting best practices of other

organizations that achieve superior

performance.

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Study Question 3: What are the useful planning tools and techniques?

Use of staff planners

Coordinating the planning function for

the total organization or one of its

major components.

Possible communication gaps between

staff planners and line management.

Next Lecture

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Study Question 4: How can plans be well implemented?

Project management…

Makes sure activities required to complete

a project are planned well and

accomplished on time and within budget

Projects – one-time activities with many

component tasks that must be completed

in proper order and within budget

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Study Question 4: How can plans be well implemented?

Key issues and principles in the goal-setting process: Set specific goals (Clearly target key results). Set challenging goals (Stretch towards goal). Ensure goals are attainable (Challenging but

realistic and possible to achieve). Goals must be timely (Goals with specific

timetables and due dates). Make sure goals are measurable (Goals should be

measureable without ambiguity).

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Study Question 4: How can plans be well implemented?

Goal-setting theory Participation in goal setting

unlocks the motivational potential of goal setting.

management by objectives (MBO) promotes participation.

when participation is not possible, workers will respond positively if supervisory trust and support exist.

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A sample hierarchy of objectives for quality management in a manufacturing firm

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Study Question 4: How can plans be well implemented?

Management by Objectives (MBO)

A structured process of regular

communication.

Supervisor/team leader and workers

jointly set performance objectives.

Supervisor/team leader and workers

jointly review results.

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Study Question 4: How does management by objectives operate?

MBO involves a formal agreement specifying … Workers’ performance objectives for a specific

time period. Plans through which performance objectives

will be accomplished. Standards for measuring accomplishment of

performance objectives. Procedures for reviewing performance results.

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Figure 7.3 Management by objectives as an integrated planning and control framework.

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Study Question 4: How does management by objectives operate?

The MBO process: Supervisor and workers jointly set

objectives, establish standards, and choose actions.

Workers act individually to perform tasks; supervisors act individually to provide necessary support.

Supervisor and workers jointly review results, discuss implications, and renew the MBO cycle.

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Study Question 4: How does management by objectives operate

Types of MBO performance objectives Improvement Personal development Maintenance

Criteria for effective performance objectives Specific Time defined Challenging Measurable

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Study Question 4: How does management by objectives operate?

Pitfalls to avoid in using MBO Tying MBO to pay.

Focusing too much attention on easily

quantifiable objectives.

Requiring excessive paperwork.

Having managers tell workers their

objectives.

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Study Question 4: How does management by objectives operate?

Advantages of MBO Focuses workers on most important

tasks and objectives. Focuses supervisor’s efforts on

important areas of support. Contributes to relationship building. Gives workers a structured opportunity

to participate in decision making.

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Study Question 4: How can plans be well implemented?

Participation and involvement Participatory planning requires that the planning

process include people who will be affected by the plans and/or will help implement them.

Benefits of participation and involvement: Promotes creativity in planning. Increases available information. Fosters understanding, acceptance, and

commitment to the final plan.

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How participation and involvement help build commitments to plans.