Mgt Ch 7

Front 1

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

Back 1

Planning

Front 2

not written down, short-term focus; specific to an organizational unit.

Back 2

Informal Planning

Front 3

written, specific, and long-term focus, involves shared goals for the organization.

Back 3

Formal Planning

Front 4

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

Back 4

Purposes of Planning

Front 5

Formal planning is associated with:

Back 5

Higher profits and returns on assets.
Positive financial results.

Front 6

Formal planning must be used for _____ _______before planning begins to affect performance

Back 6

several years

Front 7

The quality of planning and implementation affects _________ more than the extent of planning

Back 7

performance

Front 8

-Desired outcomes for individuals, groups, or entire organizations
-Provide direction and evaluation performance criteria

Back 8

Goals (also Objectives)

Front 9

-Documents that outline how goals are to be accomplished
-Describe how resources are to be allocated and establish activity schedules

Back 9

Plans

Front 10

Are related to the expected internal financial performance of the organization.

Back 10

Financial Goals

Front 11

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

Back 11

Strategic Goals

Front 12

Broadly-worded official statements of the organization (intended for public consumption)

Back 12

Stated Goals

Front 13

what actually goes on in the organization

Back 13

Real Goals

Front 14

4 Types pf plans

Back 14

Breadth
Time Frame
Specificity
Frequency of Use

Front 15

Breadth

Back 15

Strategic and Operational

Front 16

Time Frame

Back 16

Long Term and Short term

Front 17

Specificity

Back 17

Directional and Specific

Front 18

Frequency of Use

Back 18

Single use and Standing

Front 19

-Apply to the entire organization.
-Establish the organization’s overall goals.
-Seek to position the organization in terms of its environment.
-Cover extended periods of time.

Back 19

Strategic Plans

Front 20

-Specify the details of how the overall goals are to be achieved.
-Cover short time period.

Back 20

Operational Plans

Front 21

Plans with time frames extending beyond three years

Back 21

Long-Term Plans

Front 22

Plans with time frames on one year or less

Back 22

Short-Term Plans

Front 23

Plans that are clearly defined and leave no room for interpretation

Back 23

Specific Plans

Front 24

Flexible plans that set out general guidelines, provide focus, yet allow discretion in implementation.

Back 24

Directional Plans

Front 25

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

Back 25

Single-Use Plan

Front 26

Ongoing plans that provide guidance for activities performed repeatedly.

Back 26

Standing Plans

Front 27

-Broad goals are set at the top of the organization.
-Goals are then broken into subgoals for each organizational level.
-Assumes that top management knows best because they can see the “big picture.”
-Goals are intended to direct, guide, and constrain from above.
-Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility.

Back 27

Traditional Goal Setting

Front 28

-The integrated network of goals that results from establishing a clearly-defined hierarchy of organizational goals.
-Achievement of lower-level goals is the means by which to reach higher-level goals (ends).

Back 28

Means–Ends Chain

Front 29

-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.

Back 29

Management By Objectives (MBO)

Front 30

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

Back 30

Key elements of MBO:

Front 31

Reason for MBO Success

Back 31

Top management commitment and involvement

Front 32

-Not as effective in dynamic environments that require constant resetting of goals.
-Overemphasis on individual accomplishment may create problems with teamwork.
-Allowing the MBO program to become an annual paperwork shuffle.

Back 32

Potential Problems with MBO Programs

Front 33

Written in terms of outcomes, not actions
-Focuses on the ends, not the means.
Measurable and quantifiable
-Specifically defines how the outcome is to be measured and how much is expected.
Clear as to time frame
-How long before measuring accomplishment.
Challenging yet attainable
-Low goals do not motivate.
-High goals motivate if they can be achieved.
Written down
-Focuses, defines, and makes goals visible.
Communicated to all necessary organizational members
-Puts everybody “on the same page.”

Back 33

Characteristics of Well-Designed Goals

Front 34

Steps in Goal Setting

Back 34

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.

Front 35

-Strategic plans at higher levels
-Operational plans at lower levels

Back 35

Manager’s level in the organization

Front 36

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

Back 36

Degree of environmental uncertainty

Front 37

current plans affecting future commitments must be sufficiently long-term to meet those commitments.

Back 37

Commitment Concept

Front 38

Contingency Factors in A Manager’s Planning

Back 38

Manager’s level in the organization
Degree of environmental uncertainty
Length of future commitments

Front 39

-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.

Back 39

Establishing a formal planning department

Front 40

Plans are developed by members of organizational units at various levels and then coordinated with other units across the organization.

Back 40

Involving organizational members in the process

Front 41

-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.
-Formal planning reinforces today’s success, which may lead to tomorrow’s failure.

Back 41

Criticisms of Planning

Front 42

-Develop plans that are specific but flexible.
-Understand that planning is an ongoing process.
-Change plans when conditions warrant.
-Persistence in planning eventually pay off.
-Flatten the organizational hierarchy to foster the development of planning skills at all organizational levels.

Back 42

Effective Planning in Dynamic Environments