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Chapter 8

Chapter 8

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Global Management Studies
GMS 200
Sui Sui

Chapter 8 How and why do managers plan Planning – process of setting objectives and determining how to accomplish them • Importance of planning - creates a solid platform for the other management functions: * organizing – allocating and arranging resource to accomplish tasks * leading – guiding efforts of human resources to ensure high levels of task accomplishment * controlling – monitoring task accomplishments and taking necessary corrective action • The Planning process - objectives – specific results that one wishes to achieve - plan – statement of intended means for accomplishing objectives; systematic planning process: 1. Define your objectives 2. Determine where you stand vis-a-vis objectives 3. Develop premises regarding future conditions 4. Analyze and choose among action alternatives 5. Implement the plan and evaluate results - the above systematic planning approach is for two important tasks: 1) setting performance objectives 2) deciding how to best achieve them • Benefits of planning - Planning improve focus and flexibility - Planning improves action orientation; good planning makes us more 1) results oriented – creating a performance-oriented sense of direction 2) priority oriented – making sure the most important things get first attention 3) advantage oriented – ensuring that all resources are used to best advantage 4) change oriented – anticipating problems and opportunities so they can be best dealt with -Planning improve coordination * means-end chain – lower-level objectives help accomplish high-level ones - planning improves time management - planning improves control • Planning theories - rational comprehensive planning (RCP) – focuses on a logical decision-making approach and advocates a holistic approach to problem solving; planners using this approach gather information from the environment in order to run models that will allow them to determine what the future will be like so that the organization may be adapted accordingly - incrementalism – “muddle through” www.notesolution.com Types of plans used by managers • Short-range and long-range plans - short-range cover 1 year or less - intermediate-range cover 1 to 3 years - long-range 3 or more years - people vary in their capability to deal effectively with different time horizons - higher management levels focus on longer time horizons • Strategic and operational plans - strategic plan – set broad, comprehensive, and longer-term action directions for the entire organization - operational plan –define what needs to be done in specific areas to implement strategic plans O production plans – dealing with the methods and technology needed by people in work O financial plans – dealing with money required to support various operations O facilities plans – dealing with facilities and work layouts O marketing plans – dealing with the requirements of selling and distributing goods/services O human resource plans – dealing with the recruitment, selection and placement of people into various jobs • 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; often found in employee handbooks or manuals as “SOPs” (standard operating procedures) • Budgets and projects - single-use plans – only used once to meet the needs and objectives of a well-defined situation in a timely manner - budgets – sing-le-use plans that commit resources to activities, project, or programs (3 types) 1) fixed budget – fixed amount of resources for a specific purpose 2) flexible budget – allows allocation of resources to vary in proportion with various levels of activity 3) zero-based budget – allocates resources as if each budget were brand new - projects – on-time activities that have clear beginning and end points - project management – makes sure that activities required to complete a project are accomplished on time and correctly www.notesolution.com Planning tools and techniques • Forecasting – process of predicting what will happen in the future - qualitative forecasting uses expert opinions - quantitative forecasting uses mathematical and statistical analysis - all forecasts rely on human judgement - planning involves deciding on how to deal with the implications of a forecast • Contingency planning – identifies alternative courses of action that can be implemented to meet the needs of changing circumstances - contingency plans anticipate changing conditions - contingency plans contain trigger points • Scenario planning – identifies alternative future scenarios and makes plans to deal with each - long-term version of contingency planning - increases organization’s flexibility and preparation for future shocks • 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 - best practices – things that lead to superior performance • 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 • Participation and involvement - participatory planning – includes the persons who will be affected by plans and/or who will implement them - benefits of participation and involvement: O promotes creativity in planning O increases avail
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