lec 6: Foundations of Planning

Question 1

planning

Answer 1

is a primary managerial function that involves:
Defining organizational goals.
Establishing an overall strategy for achieving those goals.
**Developing ** plans for organizational work activities.

Question 2

formal planning

Answer 2

Specfic goals covering a** specfic time** period.
written and **shared **with organizational members.

Question 3

purpose of planning

Answer 3

• provide** DIRECTIONS**
• reduce UNCERTAINTY
• minimizes WASTE and REDUNDANCY
• sets the standards for CONTROLLING

Question 4

Planning is associated with

Answer 4

• **Higher profits ** and returns on assets.
• **Postitive finianical results **.

Question 5

what affects performance

Answer 5

the quality of planning and its implementation

Question 6

effect of external environment on performance

Answer 6

external environment can reduce the impact of planning on performance

Question 7

elements of planning

Answer 7

• goals ( objectives)
• plans

Question 8

what is meant by goals?

Answer 8

Desired (measurable) Outcomes for individuals, groups, and entire organizations

Question 9

what is meant by plans?

Answer 9

Documents how goals are to be accomplished. Describe how resources are to be allocated.

Question 10

type of goals

Answer 10

1. strategic goals
2. financial goals
3. stated goals

Question 11

what is meant by strategic goals?

Answer 11

Related to the performance of the firm relative to factors in its external environment and internal environment.

Question 12

what is meant by financial goals?

Answer 12

Related to the expected internal financial performance of the organization.

Question 13

what is meant by stated goals?

Answer 13

Can be found in an organization’s annual report, public relations announcements, or in public statements

Question 14

SMART Objectives

Answer 14

S: specific
M: measurable
A: attainable
R: relevant
T: time bound

Question 15

Types of plans

Answer 15

1. Breadth
2. Time frame
3. Specificity
4. Frequency of use

Question 16

Breadth (2)

Answer 16

• Strategic plan:
  apply to the entire organization and follows the organization’s overall goals.
• operational plans:
  Specify the details of how the overall goals are to be achieved

Question 17

Time Frame (2)

Answer 17

-long term plans:
Plans with time frames extending beyond three years.
- short term plans:
Plans with time frames of one year or less.

Question 18

Specificity (2)

Answer 18

• directional plans:
  Flexible plans that set out general guidelines.
• specific plans:
  Plans that are clearly defined and leave no room for interpretation.

Question 19

Frequency Of Use (2)

Answer 19

• Single use plans:
  A one-time plan specifically designed to meet the need of a unique situation.
• Standing Plans:
  Ongoing plans that provide guidance for activities performed repeatedly.

Question 20

Setting Goals & Developing Plans

Answer 20

• Approaches to Setting Goals
• Developing Plans

Question 21

Approaches to Setting Goals

Answer 21

-Traditional Goal Setting
-Management By Objectives (MBO)
-Steps of Goal Setting

Question 22

Developing Plans

Answer 22

-Contingency factors in Planning
-Approaches to Planning

Question 23

Traditional Goals Setting

Answer 23

are set by the top of the organizations as they are assumed to know better because the see the bigger picture.

Question 24

what happens to goals when they are set?

Answer 24

• Goals are then broken into sub-goals for each organizational level and they are intended to direct and guide. However goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility

Question 25

Management by Objectives (MBO)

Answer 25

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

Question 26

Key elements of MBO:

Answer 26

Goal specificity, participative decision making, an explicit performance/evaluation period, feedback

Question 27

Does MBO Work ?

Answer 27

- reasons for success: Top management commitment and involvement - Potential Problems of MBO Not as effective in dynamic environments that require constant resetting of goals

Question 28

Steps in Goal Setting

Answer 28

1. Review the organization’s mission statement 2. Evaluate available resources 3. Determine goals individually or with others 4. Write down the goals and communicate them 5.Review results and whether goals are being met

Question 29

Developing Plans: Contingency Factors in Planning

Answer 29

1. Manager’s level in the org -Strategic plans at higher levels -Operational plans at lower levels 2. Degree of environmental uncertainty - Stable environment: specific plans -Dynamic environment: specific but flexible plans

Question 30

Developing Plans: Approaches to Planning

Answer 30

1. Establishing a formal planning department -A group of planning specialists who help managers write organizational plans. -Planning is a function of management; it should never become the sole responsibility of planners. 2. Involving organizational members in the process

Question 31

Criticism of Planning

Answer 31

- may create rigidity. - Plans cannot be developed for dynamic environments. - Formal plans cannot replace intuition and creativity. -focuses managers’ attention on today’s competition not tomorrow’s survival. - Just planning isn’t enough.