Managing the Planning Process

1. Managing the Planning Process MANA 3319 A Pandey

2. Planning • A management function that: • assesses the management environment to set future objectives; and • maps out activities necessary to achieve those objectives. • Planned actions require careful resource allocation. • Plans must be accompanied by implementation guidelines.

3. Elements of Planning

4. Benefits of Planning • Assessment of external forces • Develop a sense of direction and purpose • Identifying the factors that affect the organization • Encouraging participation • Coordination of efforts • Establishment of priorities • Focusing attention on different time horizons

5. Benefits of planning (continued) • Understanding circumstances contributing to past success or failure • Ensuring the availability of adequate resources • Establishing performance standards • Supporting organizational control systems • Developing “what if” scenarios • Management development

6. The Pitfalls of Planning • Poor forecasts of future conditions • Plans imposed from above • Planning as a self-contained activity • Extensive bureaucratization • Inflexible adherence to objectives and processes

7. How to plan successfully • Decentralizing the planning powers • Using both numerical and judgmental methods • Viewing planning as continuous and capable of adapting to change • Avoiding paralysis of the analysis • Concentrating on a manageable set of issues

8. Good and Bad Planning GOOD • Decentralize planning process • Use numerical and judgmental methods • Assess external forces • Develop a sense of direction and purpose • Identify factors that affect the organization • Encourage participation • Coordinate efforts • Establish priorities BAD • Poor forecast of future conditions • Plans imposed from poor forecasts • Planning as self-contained activity

9. Formal Planning and Opportunistic Planning • Formal planning • Identify objectives • Structure the major tasks of the organization to accomplish them. • Opportunistic planning • triggered by unforeseen circumstances. • can coexist with formal planning and help the formal plan function more smoothly.

10. The Formal Planning Process Involves • Setting objectives • Charting a course of action to meet the objectives • Implementation

11. Objectives • Specific • Measurable • Achievable • Realistic • Timely • More general at the top and more specific at the lower level • Reflect its mission • Should be prioritized

12. Charting a Course of Action Strategic Action Plans Proactive, congruent, synergistic Tactical Action Plans Division of labor, budgeting Operational Action Plans Inputprocessoutput cycle

13. To be effective, a strategic action plan should meet the following criteria: • Proactivity – The degree to which the strategic action plan takes a long-term view of the future. • Congruency – The extent to which the strategic action plan fits with organizational characteristics and the external environment. • Synergy – The integration of the efforts of various organizational subunits to better accomplish corporate-wide business objectives

14. Tactical Action Plans must include: • Division of Labor – The formal assignment of authority and responsibility to job holders. • Helps ensure that tasks of jobholders are appropriate for accomplishing the department’s tactical action plan, which in turn should support the organization’s strategic action plan. • Budgeting– Controlling and allocating funds. • Variable budgeting • Moving budgeting

15. A Typical Operating System Control Inputs Transformation Outcome Feedback Loop

16. Operational Plans must include • Opportunity to use feedback for continued incremental learning. • Ability to visualize alternative types of operations – that is, alternative ways to use resources to create a product or service. • Ability to predict the effects of modifications in operations on the efficiency of operations. • Ability to evaluate the effectiveness of operations.

17. Implementation • Means of implementation: • Authority • Persuasion • Policy • Feedback mechanism

18. A Six-Stage Approach to Facilitate Organizational Problem Solving • Identify performance gaps. • Identify tasks and work processes. • Check for organizational congruence. • Align in-congruencies or inconsistencies to effectively implement the plan. • Execute the plan. • Learn from the consequences.