lecture 6(foundation of planning)

Question 1

Planning

Answer 1

A primary managerial function that involves:
Defining the organization’s goals
Establishing an overall strategy for achieving those goals
Developing plans for organizational work activities

Question 2

Formal Planning

Answer 2

Specific goals covering a specific time period
Written and shared with organizational members

Question 3

Why Do Managers Plan ?

Answer 3

Provides direction
Reduces uncertainty
Minimizes waste and redundancy
Sets the standards for controlling

Question 4

Planning is associated with

Answer 4

Higher profits and returns on assets.

Positive financial results.

Question 5

Elements of Planning

Answer 5

Goals (Objectives) and plan

Question 6

Goals (Objectives)

Answer 6

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

Question 7

Plans

Answer 7

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

Question 8

Type of Goals

Answer 8

1-Strategic Goals
2-Financial Goals
3-Stated Goals

Question 9

Strategic Goals

Answer 9

Related to the performance of the firm relative to factors in its external environment (e.g., competitors).

Question 10

Financial Goals

Answer 10

Related to the expected internal financial performance of the organization

Question 11

Stated Goals

Answer 11

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

Question 12

SMART Objectives

Answer 12

S: SPECIFIC
M: MEASURABLE
A: ATTAINABLE
R: RELEVANT
T: TIME-BOUND

Question 13

Type of Plans

Answer 13

strategic and operational

Question 14

strategic plan breadth

Answer 14

Apply to the entire organization.
Follows the organization’s overall goals.
Seek to position the organization in terms of its environment

Question 15

strategic plan time frame

Answer 15

Plans with time frames extending beyond three years

Question 16

strategic plan specifity

Answer 16

Directional Plans

Flexible plans that set out general guidelines and provide focus

Question 17

strategic plan frequency of use

Answer 17

Single Use Plans

A one-time plan specifically designed to meet the needs of a unique situation

Question 18

Operational Plans breadth

Answer 18

Specify the details of how the overall goals are to be achieved.

Question 19

Operational Plans time frame

Answer 19

Short Term Plans

Plans with time frames of one year or less

Question 20

Operational Plans specificity

Answer 20

Specific Plans
Plans that are clearly defined and leave no room for interpretation

Question 21

Operational Plans frequency of use

Answer 21

Standing Plans
Ongoing plans that provide guidance for activities performed repeatedly

Question 22

Traditional Goals Setting

Answer 22

Broad goals are set at the top of the organization.

Goals are then broken into sub-goals for each organizational level.

Assumes that top management knows best because they can see the “big picture”.

Goals are intended to direct and guide.

Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility.

Question 23

Management by Objectives (MBO)

Answer 23

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 24

Key elements of MBO:

Answer 24

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

Question 25

Reasons for MBO Success

Answer 25

Top management commitment and involvement

Question 26

Potential Problems of MBO

Answer 26

Not as effective in dynamic environments that require constant resetting of goals

Question 27

Characteristics of Well-Written Goals

Answer 27

1-Written in terms of outcomes, not actions 2-Measurable and quantifiable 3-Clear as to time frame 4-Challenging yet attainable 5-Written down 6-Communicated to all necessary organizational members

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

what are the Contingency Factors in Planning

Answer 29

1. Manager’s level in the organization 2. Degree of environmental uncertainty

Question 30

Manager’s level in the organization

Answer 30

Strategic plans at higher levels Operational plans at lower levels

Question 31

Degree of environmental uncertainty

Answer 31

Stable environment: specific plans Dynamic environment: specific but flexible plans

Question 32

what are the Approaches to Planning

Answer 32

1. Establishing a formal planning department 2. Involving organizational members in the process

Question 33

Criticism of Planning

Answer 33

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