This document discusses the foundation of planning. It defines planning as a process that involves defining organizational goals, establishing strategies to achieve those goals, and developing integrated plans. The purpose of planning is to provide direction, reduce the impact of change, minimize waste, and set standards. The document outlines different types of goals, plans, and approaches to establishing goals, including traditional goal setting and management by objectives.

1. Foundation of Planning

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3. Planning
A process that involves
defining the organization’s
goals. Establishing an
overall strategy for
achieving those goals, and
developing a
comprehensive set of plans
to integrate and coordinate
organizational work.

4. Purpose of Planning
• Gives direction
– When employees know where the
organization or work unit is going and what
they must contribute to reach goals, they can
coordinate their activities, cooperate with
each other, and do what it takes to
accomplish those goals
• Reduces the impact of change
– Reduces uncertainty by forcing managers to
look ahead, anticipate change, consider the
impact of change, and develop appropriate
responses.

5. Purpose of Planning
• Minimize waste and redundancy
– Reduces overlapping and wasteful activities,
when work activities are coordinated around
establishing plans, wasted time and resources
redundancy can be minimized.
• Set the standards
– Planning establishes goals or standards that
are used to controlling. Then Through
controlling, we compare the actual
performance against the goals.

6. Types of Goals
Goals
desired outcomes for
individuals, groups, or
entire organizations.

7. Types of Goals
• Stated Goals
– Official statements of what an organization
says, and what it wants its various stake
holders to believe, its goals are.
• Real Goals
– Goals that an organization actually pursue, as
defined by the actions of its members.

8. Types of Plans
Plans
documents that
outline how goals are
going to be met
including resources
allocations,
schedules, and other
necessary actions to
accomplish the goals.

9. Types of Plans
• Strategic Plans
– Plans that apply to the entire organization,
establish the organization’s overall goals, and
seek to position the organization in terms of
its environment.
• Operational Plans
– Plans that specify the details of how the
overall goals are to be achieved.

10. Types of Plans
• Long Term Plans
– Plans with time frame beyond three years.
• Short Term Plans
– Plans covering one year or less.

11. Types of Plans
• Specific Plans
– Plans that are clearly defined and that leave
no room for interpretation.
• Directional Plans
– Plans that are flexible and that set out
general guidelines.

12. Types of Plans
• Single-use Plan
– A one time plan specifically designed to meet
the needs of a unique situation.
• Standing Plans
– Ongoing plans that provide guidance for
activities performed repeatedly.

13. Approaches to Establishing Goals
Traditional Goal
Setting:
– An approach to
setting the goals in
which goals are set
at the top level of
organization and
then broken down
into sub goals for
each level of the
organization.
Top Management’s
Objective
Division Manager’s Objective
Department Manager’s Objective
Individual Manager’s Objective

14. Approaches to Establishing Goals
Management by Objectives (MBO):
– A management system in which specific
performance goals are jointly determined by
employees and their managers, progress
towards accomplishing those goals is
periodically reviewed, and rewards are
allocated on the basis of this progress.

15. Step in a Typical MBO Program
• The organization’s overall objectives and strategies are
formulated.
• Major objectives are allocated among divisional and
departmental units.
• Unit managers collaboratively set specific objectives for
their units with their managers.
• Specific objectives are collaboratively set with all
department members.
• Action plans, defining how objectives are to be achieved,
are specified and agreed upon by managers and
employees.
• The action plans are implemented.
• Progress toward objectives is periodically reviewed, and
feedback is provided.
• Successful achievement of objectives is reinforced by
performance-based rewards.