Planning Concepts and Practices
Define the planning function and explain how formal and
informal planning differ.
Planning is the foremost function of management, the
first in a cycle of responsibilities that determines what is to
be done, when it is to be done, how it is to be done, and who is
to do it. Planning is accomplished within the framework of the
firms mission, which defines its purpose through its products,
services and major objectives. Informal planning is an intuitive process. Formal
planning requires rigorous investigation, careful definition of
an organization's objectives, and well defined
activities to fulfill those objectives.
Explain management planning responsibilities and how they
relate to different types of objectives.
Responsibilities are related to a management hierarchy
with strategic, tactical, and operational dimensions. These
three strata represent the active managers below the board of
directors. The board has the responsibility to support top
management in instigating and fulfilling major objectives.
Executive constitute top management, and they are concerned with
strategic plans, which include long&-term objectives and
the strategies necessary to fulfill them. At the tactical level,
middle managers break strategies into shorter time periods,
translations major objectives into tactical plans and
objectives. These typically are expressed in annual planning
budgets with specific objectives. At the operational level first&-line
managers and supervisors implement tactical objectives.
Describe the various ways plans are communicated and how
managers document planning activities.
There are standing&-use plans that can be repeated
and single&-use plans that are seldom or never repeated.
Standing&-use plans are documented and communicated through
policies, procedures, and rules. Single&-use plans are
documented and communicated through programs, projects, and
budgets.
Explain why contingency planning is so important.
A contingency plan is an alternative set of objectives
and activities that can be implemented if and when circumstances
change so drastically that the preferred plan is infeasible.
Contingency planning is a vital responsibility for all managers.
Identify the steps in a formal planning process.
A general pattern of planning includes these steps: (1)
establish major objectives; (2) evaluate the environmental
factors and the competitive issues that can affect the firm; (3)
articulate assumptions; (4) identify and involve the proper
managers; (5) develop alternatives; (6) stratify plans; (7)
communicate and document plans; (8)
determine programs, projects, schedules, budgets, and
other activities necessary to accomplish documented objectives;
(9) implement the action plans and (10) immediately plan to
plan.
Contrast the three main approaches to planning.
The top down approach is a method of centralized planning
and reflects the
hierarchical authority
of most organizations. The
bottom&-up approach is a method of decentralizing planning
authority. The team&-planning approach is a participative
method involving as many people as possible at each level.
