Chapter 4 Planning
Planning is choosing a goal and developing a method or strategy to achieve that goal
1. Benefits and Pitfalls of panning
Benefits of Planning: intensified effort, persistence, Planning Pitfalls
direction, and creation of task strategies
- It can impede change and prevent or slow
- Managers and employees put forth greater needed adaptation. Sometimes companies
effort when following a plan become so committed to achieving the goals
set forth in their plans or they become so intent
- Planning leads to persistence – that is working
on following the strategies and tactics spelled
hard for long period. Planning encourages out in them, that they fail to see that their plans
persistence even when there may be little aren’t working out that their goals need to
chance of short-term success
- Plans encourage managers and employees to
- It can create a false sense of certainty.
direct their persistent efforts toward activities Planners sometimes feel that they know
that help accomplish their goals and away from exactly what the future holds for their
activities that don’t
competitors, their suppliers, and their
companies. If the assumptions turn out to be
- Plans encourages the development of task false, then plans based on them are likely to
- The most compelling benefit of planning is that
is has been proven to work for both companies - The detachment of planners: planner and
mangers are supposed to focus on the big
and individuals. Companies with plans have
larger profits and grow much faster than picture and not concern themselves with the
companies that don’t details of implantation, which is carrying out the
plan. Detachment leads planners to plan for
- There is no better way to improve the things they don’t understand. Planners need to
performance of the people who work in a be familiar with the daily details of their
company than to have them set goals and businesses if they are to produce plans that
develop strategies for achieving those goals can work
2. How to make a plan that works?
Step 1: Setting Goals
- Planning is choosing a goal and developing a method or strategy to achieve that goal, the first step in
planning is to set goals.
- To direct behaviour and increase effort, goals need to be specific and challenging.
- Specific, challenging goals provide a target for which to aim and a standard against which to measure
- S.M.A.R.T goals are specific, measureable, attainable, results-oriented, and time-bounded.
Step 2: Developing Commitment to Goals
- Goal Commitment is the determination to achieve a goal.
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- Managers and workers must choose to commit themselves to a goal
- The popular approach is set goals participatively. Rather than assigning goals to workers, managers
and employees choose goals together. The goals are more likely to be realistic and attainable if
employees participate in setting them
- Another technique is to make the goal public by having individual or work units tell others about their
- Third way to increase goal commitment is to obtain top management’s support. Top management can
show support for a plan or program by providing funds, speaking publicly about the plan, or participating
in the plan itself.
Step 3: Developing Effective Action Plans
- An action plan lists the specific steps, people, resources, and time period for accomplishing a goal.
Step 4: Tracking Progress
There are two accepted methods of tracking progress
- The first is to set proximal goals and distal goals, which proximal goals are short-term goals or sub-
goals, whereas distal goals are long-term or primary goals
- Setting proximal goals is that they may be more motivating and rewarding than waiting to achieve far-off
- The second method of tracking progress is to gather and provide performance feedback
- Frequent performance feedback allows workers and managers to track their progress toward goal
achievement and make adjustments in effort, direction, and strategies.
Step 5: Maintaining flexibility
- One method of maintain flexibility while planning is to adopt an options-based approach
- The goal of options-based planning is to keep options open by making small, simultaneous
investments in many options or plans. Then when one or a few of these plans emerge as likely winners,
you invest even more in these plans these plans while discontinuing or reducing investment in the others
- Another method of maintaining flexibility while planning is to take a learning-based approach. In
contrast to traditional planning, which assumes that initial action plans are correct and will lead to
success, learning-based planning assumes that action plans need to be continually tested, changed, and
improved as companies learn better ways of achieving goals.
3. Planning from Top to Bottom
Starting at the Top
- Top management is responsible for developing long-term strategic plans that make clear how the
company will serve customers and position itself against competitors in the next two to five years
- A vision is a statement of a company’s purpose or reason for existing. They should be brief - no more
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than two sentences. They also should be inspirational, clear, ad consistent with widely shared company
beliefs and values.
- The mission, which flows from the vision, is a more specific goal that unifies company-wide efforts,
stretches and challenges the organization, and possesses a finish line and a timeframe.
- Companies can set missions in four ways. 1) Targeting, setting a clear, specific target and “aiming” for it.
2) Common-enemy mission, in which the company vows to defeat one of its corporate rivals, example:
Pepsi’s aspiration of beating Coke. 3) The role-model mission, in which rather than focusing on
defeating specific competitors, as in the common-enemy mission, the company emulates the
characteristics and practices of as successful company. 4) The internal-transformation mission, in
which the company aims to achieve dramatic change to remain competitive in its markets.
Bending弯弯 in the Middle
- Middle management is responsible for developing and carrying out tactical plans to accomplish the
- Tactical plans specify how a company will use resources, budgets and people to accomplish specific
goals within its mission.
- Whereas strategic plans and objectives are used to focus company efforts over the next two to five
years, tactical plans and objectives are used to direct behaviour, efforts, and attention over the next six
months to two years.
- Management by objectives is a management technique often used to develop and carry out tactical
- Management by o