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seven
Foundations of Planning
1. INTRODUCTION.
Planning is one of the four functions of management. The basics of planning are presented in this chapter. The text discusses what planning is, why managers plan, how they plan, and provides some contemporary issues related to planning.
2. WHAT IS PLANNING?
Planning involves defining the organization’s goals, establishing an overall strategy for achieving these goals, and developing a comprehensive set of plans to integrate and coordinate organizational work. The term planning as used in this chapter refers to formal planning.
3. WHY DO MANAGERS PLAN?
A. Purposes of Planning.
Planning is important and serves many significant purposes.
1. Planning gives direction to the organization.
2. Planning reduces the impact of change.
3. Planning establishes a coordinated effort.
4. Planning reduces uncertainty.
5. Planning reduces overlapping and wasteful activities.
6. Planning establishes objectives or standards that are used in controlling.
B. Planning and Performance
Research has shown we cannot assume organizations with formal planning processes always outperform those organizations that don’t have formal planning processes.
1. Generally speaking, however, formal planning is associated with positive financial results.
C. The quality of the planning process and appropriate implementation probably contribute more to high performance than does the extent of planning.
D. When formal planning has been shown not to lead to higher performance, the environment is usually the reason.
4. HOW DO MANAGERS PLAN?
Planning is often called the primary management function because it establishes the basis for all other functions. Planning involves two important elements: goals and plans.
A. The Role of Goals and Plans in Planning.
1. Goals—desired outcomes for individuals, groups, or entire organizations.
2. Goals are objectives—the two terms are used interchangeably.
3. Types of goals.
a. Financial performance versus strategi
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