2. Chapter 2 Study Questions
Why and how do managers plan?
What types of plans do managers use?
What are the useful planning tools and
techniques?
How can plans be well implemented?
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3. Study Question 1: Why and how do managers plan?
Planning
– The process of setting objectives and determining how to best
accomplish them.
Objectives
– Identify the specific results or desired outcomes that one intends
to achieve.
Plan
– A statement of action steps to be taken in order to accomplish the
objectives.
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4. Study Question 1: Why and how do managers plan?
Steps in the planning process:
– Define your objectives.
– Determine where you stand vis-à-vis objectives.
– Develop premises regarding future conditions.
– Analyze and choose among action alternatives.
– Implement the plan and evaluate results.
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5. Figure 7.1 The roles of planning and controlling in the
management process.
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6. Study Question 1: Why and how do managers plan?
Benefits of planning:
– Improves focus and flexibility.
– Improves action orientation.
– Improves coordination.
– Improves time management.
– Improves control.
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7. Study Question 1: Why and how do managers plan?
Personal Time Management Tips:
– DO say “no” to requests that distract from
what you should be doing.
– DON’T get bogged down in details that can
be addressed later.
– DO screen telephone calls, emails, and
meeting requests.
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8. Study Question 1: Why and how do managers plan?
Personal Time Management Tips:
– DON’T let drop-in visitors instant messaging
use up your time
– DO prioritize your important and urgent work
– DON’T become calendar bound by letting
others control your schedule
– DO follow priorities; do most important and
urgent work first.
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9. Study Question 2: What types of plans do managers use?
Short-range and long-range plans
– Short-range plans = 1 year or less
– Intermediate-range plans = 1 to 2 years
– Long-range plans = 3 or more years
People vary in their capability to deal effectively with different
time horizons.
Higher management levels focus on longer time horizons.
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10. Study Question 2: What types of plans do managers use?
Strategic and operational plans
– Strategic plans — set broad, comprehensive, and longer-term
action directions for the entire organization.
– Operational plans — define what needs to be done in specific
areas to implement strategic plans.
• Production plans
• Financial plans
• Facilities plans
• Marketing plans
• Human resource plans
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11. Study Question 2: What types of plans do managers use?
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.
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12. Study Question 2: What types of plans do managers use?
Budgets and project schedules
– Single-use plans
• Only used once to meet the needs and objectives of a
well-defined situation in a timely manner.
– Budgets
• Single-use plans that commit resources to activities,
projects, or programs.
• Fixed, flexible, and zero-based budgets.
– Projects
• One-time activities that have clear beginning and end
points.
• Project management and project schedules.
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13. Study Question 3: What are the useful planning tools and
techniques?
Forecasting
– Making assumptions about what will happen in the future.
– Qualitative forecasting uses expert opinions.
– Quantitative forecasting uses mathematical and statistical analysis.
– All forecasts rely on human judgment.
– Planning involves deciding on how to deal with the implications of
a forecast.
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14. Study Question 3: What are the useful planning tools and
techniques?
Contingency planning
– Identifying 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.
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15. Study Question 3: What are the useful planning tools and
techniques?
Scenario planning
– A long-term version of contingency planning.
– Identifying alternative future scenarios.
– Plans made for each future scenario.
– Increases organization’s flexibility and preparation
for future shocks.
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16. Study Question 3: What are the useful planning tools and
techniques?
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.
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17. Study Question 3: What are the useful planning tools and
techniques?
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.
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18. Study Question 4: How can plans be well implemented?
Project management…
Makes sure activities required to complete a
project are planned well and accomplished on
time and within budget
Projects – one-time activities with many
component tasks that must be completed in
proper order and within budget
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19. Study Question 4: How can plans be well implemented?
Gantt charts – graphic display of scheduled tasks
required to complete a project
CPM/PERT – a combination of the critical path method
and the program evaluation and review technique
Critical path – pathway from project start to finish that
involves activities with the longest completion times
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20. Study Question 4: How can plans be well implemented?
Key issues and principles in the goal-setting
process:
– Set specific goals.
– Set challenging goals.
– Ensure goals are attainable.
– Goals must be timely.
– Make sure goals are measurable.
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21. Study Question 4: How can plans be well implemented?
Goal-setting theory
– Participation in goal setting
• unlocks the motivational potential of goal setting.
• management by objectives (MBO) promotes
participation.
• when participation is not possible, workers will
respond positively if supervisory trust and support
exist.
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23. Study Question 4: How can plans be well implemented?
Management by Objectives (MBO)
– A structured process of regular communication.
– Supervisor/team leader and workers jointly set
performance objectives.
– Supervisor/team leader and workers jointly review
results.
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24. Study Question 4: How does management by objectives
operate?
MBO involves a formal agreement specifying …
– Workers’ performance objectives for a specific time period.
– Plans through which performance objectives will be accomplished.
– Standards for measuring accomplishment of performance
objectives.
– Procedures for reviewing performance results.
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25. Figure 7.3 Management by objectives as an integrated planning
and control framework.
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26. Study Question 4: How does management by objectives
operate?
The MBO process:
– Supervisor and workers jointly set objectives,
establish standards, and choose actions.
– Workers act individually to perform tasks;
supervisors act individually to provide necessary
support.
– Supervisor and workers jointly review results,
discuss implications, and renew the MBO cycle.
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27. Study Question 4: How does management by objectives operate
Types of MBO performance objectives
– Improvement
– Personal development
– Maintenance
Criteria for effective performance objectives
– Specific
– Time defined
– Challenging
– Measurable
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28. Study Question 4: How does management by objectives
operate?
Pitfalls to avoid in using MBO
– Tying MBO to pay.
– Focusing too much attention on easily quantifiable
objectives.
– Requiring excessive paperwork.
– Having managers tell workers their objectives.
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29. Study Question 4: How does management by objectives
operate?
Advantages of MBO
– Focuses workers on most important tasks and
objectives.
– Focuses supervisor’s efforts on important areas of
support.
– Contributes to relationship building.
– Gives workers a structured opportunity to
participate in decision making.
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30. Study Question 4: How can plans be well implemented?
Participation and involvement
– Participatory planning requires that the planning process
include people who will be affected by the plans and/or will
help implement them.
– Benefits of participation and involvement:
• Promotes creativity in planning.
• Increases available information.
• Fosters understanding, acceptance, and commitment to the
final plan.
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31. Figure 7.4 How participation and involvement help build
commitments to plans.
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