Management Chapter 4 - Real

PLANNING IMPROVES FOCUS AND FLEXIBILITY.

- An organization with focus knows what it does best and what it needs to do. Individuals with focus know where they want to go in a career or personal situation, and they keep that focus even when difficulties arise. - An organization with flexibility is willing and able to change and adapt to shifting circumstances. An individual with flexibility adjusts career and life plans to fit new and developing opportunities

Management researcher Elliot Jaques found that very few people have the capacity to think long term.

- most of us work comfortably with only three-month time spans; some can think about a year into the future; only about one person in several million can handle a 20-year time frame.

Best practices

methods that lead to superior performance. - They search for best practices inside and outside the organization and among competitors and noncompetitors alike. These are things that others are doing and that help them to achieve superior performance.

Outcome goals

set targets for actual performance results.

Planning can significantly improve

time management.

Long-range plans

usually cover three years or more.

Management consultant Stephen R. Covey points out that

- planning gives us not just an action orientation, but also one guided by a clear set of priorities. - He says the most successful executives "zero in on what they do that adds value to an organization." They know what is important and what can wait, and they work first on the things that really count. -They are results oriented, quick to avoid the complacency trap, and don't waste time by working on too many things at once.

Management Process

1. Planning - to set direction -Decide where you want to go -Decide how to best to go about it 2. Leading - to inspire effort 3. Controlling - to ensure results 4. Organizing - to create structure

Implelenting the planning process

1: define your objectives and to identify the specific results or desired goals you hope to achieve. 2: compare where you are at present with the objectives. This establishes a baseline for performance; the present becomes a standard against which future progress can be gauged. 3:formulate premises about future conditions. It is where one looks ahead, trying to figure out what may happen and with what potential consequences.

cont

4: planning is to make an actual plan. This is a list of actions that must be taken to accomplish the objectives. 5: implement the plan and evaluate results. This is where action takes place and measurement happens. Results are compared with objectives, and if needed, plans are modified to improve things in the future

_______________ identifies BEST practices used by other organizations.

Benchmarking

__________ are plans that commit resources to activities.

Budgets

By definition, planning involves thinking ahead.

But the more uncertain the environment, the more likely one's original assumptions, forecasts, and intentions are to prove inadequate or wrong. And when they do, the best managers and organizations have alternative plans ready to go.

_____________ planning creates backup plans for when things go wrong.

Contingency

_______________ planning involves others in the organization in the planning process.

Participatory

_____________ is one of the four functions of management.

Planning

ACTION ORIENTED

Planning gives us a results-driven sense of direction

CHANGE ORIENTED

Planning helps us anticipate and deal with problems and opportunities

PRIORITY ORIENTED

Planning highlights the most important things for our attention

ADVANTAGE ORIENTED

Planning makes sure that resources are used to best advantage

___________ bear on more tactical objectives.

Short-range plans

Planning Steps

Step 1. Define your objectives Know where you want to go; be specific enough to know you have arrived when you get there and how far off you are along the way. Step 2. Determine where you stand vis-à-vis objectives Know where you presently stand in reaching the objectives; identify strengths that work in your favor and weaknesses that can hold you back. Step 3. Develop premises regarding future conditions Generate alternative scenarios for what may happen; identify for each scenario things that may help or hinder progress toward your objectives. Step 4. Make a plan Choose the action alternative most likely to accomplish your objectives; describe what must be done to implement this course of action. Step 5. Implement the plan and evaluate results Take action; measure progress toward objectives as implementation proceeds; take corrective actions and revise the plan as needed.

Good planning facilitates coordination by linking people and subsystems in a hierarchy of objectives. Hierarchy of objectives

This is a means-ends chain in which lower-level objectives (the means) lead to the accomplishment of higher-level objectives (the ends). - Strategic quality goals set at the top should be meaningful across all organization levels and for all work units and their members. Good planning helps accomplish this coordination by creating a hierarchy of objectives

Budget

a plan that commits resources to projects or activities. - Financial budgets project cash flows and expenditures. -Operating budgets plot anticipated sales or revenues against expenses. -Nonmonetary budgets allocate resources such as labor, equipment, and space. -A fixed budget allocates a fixed amount of resources for a specific purpose, such as $50,000 for equipment purchases in a year. -A flexible budget allows resources to vary in proportion with various levels of activity, such as monies to hire temporary workers when workloads exceed certain levels.

Policy

a standing plan that communicates broad guidelines for decisions and action - Common human resource policies address such matters as employee hiring, termination, performance appraisals, pay increases, promotions, discipline, and civility.

Plan

a statement of intended means for accomplishing objectives.

Zero-based budget

allocates resources as if each budget were brand new. - No guarantee exists for renewing any past funding. Instead, all proposals compete with a fresh start for available resources. This helps eliminate waste by making sure scarce resources are not spent on unproductive, outdated, or low-priority activities

Scholars Gary Latham and Gerard Seijts

also distinguish between learning goals focused on acquiring knowledge and skills necessary for performance, and outcome goals that set actual performance targets. - They point out that undesirable effects of goal setting are likely when outcome goals are emphasized at the expense of learning goals prerequisite to them. -Latham and Seijts say: "It is foolish and even immoral for organizations to assign employees stretch goals without equipping them with the resources to succeed—and still punish them when they fail to reach those goals."

Forecasting

attempts to predict the future. - Some rely on qualitative forecasting, which uses expert opinions to predict the future. - Others involve quantitative forecasting, which uses mathematical models and statistical analysis of historical data and surveys. - any forecast should be used with caution. Forecasts are planning aids, not planning substitutes. - they always rely on human judgment, and that judgment can be wrong.

Complacency trap

being lulled into inaction by current successes or failures. - Instead of being caught in the present, however, planning keeps us alert and actively moving toward the future.

vision

clarifies the purpose of the organization and expresses what it hopes to be in the future.

Planning improves _____________ and

coordination;control.

Managers provide employees with a sense of organizational

direction.

With scenario planning, managers consider __________ that can impact organization performance.

factors

Planning improves

focus and flexibility, action orientation, coordination and control, and time management.

Managers use ____________ to make informed guesses regarding what the future is going to look like.

forecasting

Contingency planning

identifies alternative courses of action to take when things go wrong. - A really good contingency plan will contain "trigger points" for activating preselected alternatives. - Contingency planning can't prevent crises from occurring. But when things do go wrong, there's nothing better to have in place than good contingency plans. - BP oil spill

Scenario planning

identifies alternative future scenarios and makes plans to deal with each. - it helps "condition the organization to think" and better prepare for "future shocks." - "What will Shell do after its oil supplies run out?"

Functional plan

identifies how different parts of an enterprise will contribute to accomplishing strategic plans. - Such functional plans might include things like: • Financial plans deal with money required to support various operations. • Facilities plans deal with facilities development and work layouts. • Marketing plans deal with the requirements of selling and distributing goods or services. • Human resource plans deal with the recruitment, selection, and placement of people into various jobs. • Production plans deal with the methods and technology needed by people in their

Strategic plan

identifies long-term directions for the organization.

Participatory planning

includes the persons who will be affected by plans and/or who will be asked to implement them.And, it unlocks the advantages of group decision making. - can increase the creativity and information available, it can increase understanding and acceptance of plans, and it can build stronger commitments to a plan's success.

Procedure

or rule precisely describes actions to take in specific situations. - A sexual harassment policy, for example, should be backed up with procedures that spell out how to file a sexual harassment complaint, as well as the steps through which any complaint will be handled.

Operational plan

or tactical plan sets out ways to implement a strategic plan. - They are shorter-term and step-by-step means for putting the strategies into action. In the sports context, you might think of tactical plans as involving the use of "special teams" plans or as "special plays" designed to meet a particular threat or opportunity.

When done well, it sets the stage for the others:

organizing—allocating and arranging resources to accomplish tasks; leading—guiding the efforts of human resources to ensure high levels of task accomplishment; and controlling—monitoring task accomplishments and taking necessary corrective action.

Stretch goals

performance targets that we have to work extra hard and stretch to reach. - Goals that are set unrealistically high can have negative consequences that include excessive stress for the goal seeker, poor performance results, and possible unethical or illegal behavior. -This is especially the case when people are expected to meet high goals over and over again, and when those striving to meet high goals don't have the support needed to accomplish

Organizational policies and procedures are types of

plans

Plans are formalized where situations are ____________ over time.

recurring

Learning goals

set targets to create the knowledge and skills required for performance.

Planning is the process of

setting objectives.

Objectives

specific results that one wishes to achieve.

Big-picture objectives require managers to adopt a __________ mindset.

strategic

Planning

the process of setting performance objectives and determining how to accomplish them.

Planning fallacy

underestimating the time required to complete a task. - Research suggested the typical error can be as high as 40%. -It also indicates that breaking a large task into smaller ones and mentally going through a task before starting the work makes for more realistic time estimates.

Benchmarking

uses external comparisons to gain insights for planning. - Managers use benchmarking to discover what other people and organizations are doing well and plan how to incorporate these ideas into their own operations. - As a planning tool, benchmarking is basically a way of learning from the successes of others.

Short-range plans

usually cover a year or less.