Topic 8: Foundations of Planning

What is planning?
1. A management function that involves defining goals, establishing strategies for achieving the goals and developing plans to integrate and coordinate activities
Planning Differences
1. Formal Planning
  1. Specific goals covering a specific period of times, goals are written/shared and there is an action program in place for achievement of goals
2. Informal Planning
  1. Nothing is written, goal's aren't shared and planning is general
Why do managers plan?
1. 4 Reasons:
  1. 1. Planning provides Direction
    1. Employees can coordinate activities and without planning departments/individuals might work at cross-purposes
  2. 2. Planning reduces uncertainty
    1. Forces managers to look ahead, anticipate and consider change and the appropriate responses to it
  3. 3. Planning minimises waste and redundancy
    1. Wasted time and resources are minimised when work activities are coordinated and planned and inefficiencies can be corrected/eliminated
  4. 4. Planning sets the standards used in controlling
    1. Goals and plans are developed from planning then through controlling actual performance is compared against goals
Elements of planning
1. Goals (objectives)
  1. Goals are desired outcomes for individuals, groups and organisations and provide direction for all manage,net decisions and the criterion that work accomplishments are measured
    1. Types:
      1. 1. Financial goals: Related to the financial performance of the organisation
      2. 2. Strategic goals: Related to other areas of the organisations performance
      3. Stated goals: Official statements of what an organisation says and what it wants it stakeholders to believe its goals are. Often are conflicting and influenced by societal expectations
      4. Real goals: Goals than an organisation actually pursues
      5. Goals need to be SMART: Specific, measurable, achievable, realistic and time constrained
2. Plans
  1. Documents that outline how foals are to be met and describe necessary actions to accomplish the goals
    1. Types:
      1. 1. Breadth
        Strategic: Apply to entire organisation and establish overall goals/strategies
        Operational: Specifies the details of how the goals are to be achieved
      2. 2. Time Frame
        Short-term: <1 year
        Long-Term: 3+ years
      3. 3. Specificity
        Directional: Flexible and set general guidelines
        Specific: Clearly defined, leave no room for interpretation and have specifically stated objectives
      4. 4. Standing
        Ongoing: Guidance for activities that are performed repeatedly and include policies, rules and procedures
        Single-use: One-time plan specifically designed to meet the needs of a unique situation
Setting goals and developing plans:
1. 1. Traditional goal setting
  1. Goals are set at the top of the organisation and broken down into sub-goals for each organisation level
2. 2. Management by objectives:
  1. Setting mutually agreed upon goals to evaluate employee performance. Goals are used a motivation not just control through performance based rewards
    1. MBO programs have 4 elements:
      1. 1. Goal specificity
        2. Participative decision making
        3. Explicit time frames
        4. Performance Feedback
Characteristics of well designed goals:
1. Written in terms of outcomes rather than actions (end result= most important), measurable/quantifiable (to determine if goal has been met), clear time frame, challenging buy attainable, written down and communicated to all organisational members
Steps in goal setting:
1. There are 5 steps:
  1. 1. Review the organisations mission: This is the organisations purpose-- goals should reflect this
    1. 2. Evaluate available resources: Goals should be possible to achieve/realistic
      1. 3. Determine goals individually or with input from others
        4. Write down the goals and communicate them to all who need to know
        5. Review results to see whether goals are being met
Developing plans:
1. Influenced by 3 contingency/situational factors and by the planning approached followed:
  1. Contingency factors in planning:
    1. 1. Level in the organisation: Higher level-- planning is more strategy orientated, Lower level-- planning is more operational
      1. 2. Degree of environmental uncertainty: When environmental uncertainty is high plans should be specific but flexible
        3. Length of future commitments: The more plans affect future commitments the longer the time frame for which managers should plan
Contemporary issues in planning:
1. 1. Effective planning in dynamic environments
  1. Uncertain environments effect the plans managers develop, in these environments managers need to develop plans that are specific but flexible, managers also need to stay alert for environmental changes that could impact plans, the organisational hierarchy should be flattened as the responsibility for establishing goals/developing plans is pushed to lower organisational levels
2. 2. Assessing the organisations environment:
  1. 1. Environmental scanning
    1. Screening large amounts of information to anticipate/interpret changes in the environment and emerging trends. Scanning can reveal issues/concerns that could affect an organisations current or planned activities
    2. 2. Competitor Intelligence
      1. An area of environmental scanning that involves identifying the competition and how they affect the organisation, intelligence can be sourced from employees, suppliers, customers, trade publications or the internet. Becomes illegal when proprietary material or trade secrets are stolen
      2. 3. Global Scanning
        Information on global sources that might affect the organisation
        4. Forecasting
        Managers need forecasts that allow them to predict future events effectively and in a timely manner. Forecasts are prediction of outcomes and environmental scanning created the foundation for this
        Techniques:
        Qualititative and quantitative
        Effectiveness:
        Most accurate when the environment is not rapidly changing, simple methods should be used and forecasts should be shortened in length for better accuracy
Project Management:
1. A project is a one-time only set of activities that has a definite beginning/ending. Project management is the task of getting a projects activities done on time, within budget and according to specifications
2. Typicallyu work is done by a project team where members are assigned from respective work areas to the project and report to a project manager. Project managers coordinate the projects activities with other departments. When the project teams accomplished goals, members disband and move on to other projects or back to their permanent work teams

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Topic 8: Foundations of Planning

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