LEC 5 - Planning 2011 Student Ed(1)

8/4/2019 LEC 5 - Planning 2011 Student Ed(1)

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Angelo Kinicki &

Brian K. Williams



At the end of the lecture, you will be able to do the following:

1. Define planning2. Describe how planning can help managers cope

with uncertainty

3. Explain why some managers don’t plan

4. Illustrate the benefits of planning

5. Elaborate the fundamentals of planning



HOW CAN PLANNING HELP MANAGERS DEALWITH UNCERTAINTY?

Planning can be defined as setting goals anddeciding how to achieve them

Planning also involves coping with uncertainty byformulating future courses of action to achievespecified results

Planning is used together with strategicmanagement and evolves from the company’smission and vision

Planning covers strategic planning (done by topmanagers, tactical planning (done by middlemanagers), and operational planning (done by first-line managers) Story of the camel



Businessmen continually plan ways to:◦ Increase their business market share

◦ Expand into new markets

◦ Maximize profits / minimize losses

◦ Minimize tax liabilities◦ Boost their company’s image

◦ Satisfy major shareholders

◦ Create strategic alliances

◦ Defeat their competitors◦ etc etc etc



Figure 5.1: Planning and Strategic Management



1. Mission

- organisation’s purpose or reasonfor being

2. Vision

- long-term goal of what anorganisation wants to become



VISION

To be Singapore’s first choice for information,communications and entertainment services.

MISSION

To provide every person, homeand business in Singapore with

world-class multimediaservices and content



Mission: Nurturing enterprising professionals

for the economy through education and

training◦ Whose mission statement is this?

Vision: Connecting Minds,

Unlocking Talents

and Creating Value

NP’s



WHY some managers don’t plan?

Planning requires managers to set aside their

regular responsibilities to develop plans

New events may happen and there may not

always be enough time to plan

Earthquake



Four main benefits of planning:

1. Organizations can use plans to check theirprogress toward their goals

2. Plans define the responsibilities of a firm’sdepartments and coordinates their activities

3. Planning requires managers to consider what mayhappen in the future

4. Planning for unpleasant contingencies helpsmanagers deal with uncertainty (Sars, bird flu, business continuity plan)

My first tutorial



WHAT IS INVOLVED WITH PLANNING?

Planning translates an organization’s mission (purpose or reason for being) into

objectives/goalsThe mission statement answers the question“what is our reason for being?”

The vision statement answers the question“what do we want to become?”

Planning begins with the mission statement



Figure 5.2: Making Plans



Having clearly defined mission and visionstatements allows three things to happen:1. Strategic planning by top management where

long-term goals are determined and

available resources are identified2. Tactical planning by middle management

where contributions their departments orsimilar work units can make are determined

3. Operational planning by first-line managerswhere how specific tasks will beaccomplished using available resources isdetermined



Figure 5.3: Three Levels of Management, ThreeTypes of Planning



1. Planning done by top managers to support

the organisation’s mission and vision.

2. Organisation’s long-term plans for thenext 1 – 5 years

3. Examples:◦ HDB’s strategic plans for Punggol housing estate

◦ Professional accounting body’s strategic plans



Business firms rarely ever announce orpublish in full their current strategic plans

Why?

Answer: Confidentiality and do not want tolet competitors know



1. Planning done by middle management

2. Support the strategic plans

3. Determine what contributionsdepartments can make with their givenresources over the next 6 to 24 months.



1. Planning done by first line managers

2. Support the tactical plans

3. Determine how to accomplish specific taskswith available resources within the next 1 to 52

weeks.



The purpose of planning is to set goals and then

formulate action plans

Specific commitments to achieve a measurable result

within a stated period of time are known as goals or

objectives

Goals/objectives are put in a means-end chain where

the achievement of low-level goals is the means to

achieve high-level goals or ends



Strategic goals focus on objectives for the

organization as a whole, while tactical goals focus

on the actions needed to achieve strategic goals,

and operational goals are concerned with short-

term matters associated with realizing tactical

goals



Once goals are set, the firm makes an action plan which defines the course of action needed to achievestated goals

An operating plan defines how the firm will conduct

business based on the action plan - it identifiesclear targets such as revenues, cash flow, andmarket share.

Operating plan involves first line supervisors and

hence their inputs are very important. E.g SamWalton.



Plans developed for activities that occur repeatedly over aperiod of time are called standing plans

Standing plans consist of policies (a standing plan that outlinesthe general response to a designated problem or situation,

e.g. in event of heavy rain listen to radio for news changes inplan – National Day parade

procedures (a standing plan that outlines the response to aparticular problem or circumstance), e.g. transfer to anotherpoly

rules (a standing plan that designates specific required action) e.g. absent for class: submit MC



A policy outlines thegeneral response to adesignated problem orsituation.

Serves as a general guidefor managers but there is

room for flexibility in itsinterpretation.



A procedure outlines the steps tobe taken in response to a particularproblem or circumstance.

Worker Example:

Staff grievance procedure when adispute arises between an

employee and his/her superior orcompany.



A rule states a specified required action

Rules are rigid compared with policies

Often come with penalty for non-compliance

Business Example: - A construction firm makes it compulsory for

workers to wear safety helmets at theconstruction sites.



WHAT ARE SMART GOALS?

Good goals are SMART:

they should be stated in specific terms

they should be measurable or quantifiable

they should be challenging but attainable

they should be results-oriented and support theorganization’s vision

they should specify target dates by which theyshould be accomplished



It is stated in precise rather than vague terms

Specific business goal example:◦ Nokia aims to produce the world’s first voice-

activated handphone

Specific student goal example:◦

You aim to score an AD for BMGT



It is quantifiable so thatimprovements can be calculated.

Measurable business goal example:◦ To increase sales of our firm’s product

by $200,000

Measurable student goal example:

◦ To improve my GPA by 10% in the nextexam.



It is a realistic goal that is within one’s abilityto achieve

Many goals fail because the goal setter wastoo ambitious or overestimated his/her

abilities by setting targets that are too high.

Attainable business goal example:◦ Because Singapore is just recovering from a

recession, our shop should aim for only 2%increase in sales this year 2011.

Attainable student goal example:◦ To save 10% of one’s monthly pocket allowance is

an attainable goal for many students.



It is aimed at attaining a certain level of achievement which support andcontribute to the mission and vision.

Results-oriented business goal

example:◦ All online enquiries/feedback must beanswered by our customer servicedepartment within 1 working day.

Results-oriented student goal example:◦

To complete at least 75% of my homeworkbefore every tutorial.◦ Can also refer to earlier examples about

GPA and saving pocket money.



Deadlines are stated for achieving the goal.

The deadlines should be as specific as possible.

Business goal with target date example:◦ To achieve 20% increase in our company’s annual sales

by the last quarter of 2012.

Student goal with target date example:◦ To complete our BMGT project by 19 July 2011 so that

we have time to check and make any last minutechanges before the final deadline on 22 July 2011.



1. Define planning2. Describe how planning can help

managers cope with uncertainty3. Explain why some managers don’t plan 4. Illustrate the benefits of planning5. Elaborate the fundamentals of planning

LEC 5 - Planning 2011 Student Ed(1)

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