bm035l02planningformanagers

8/6/2019 BM035L02PlanningforManagers

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PlanningPlanning


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Organusational Decisions Slide 2 of 34 BM035-3-2

What Would You Do?

In early 2000 MAS controlled 90% of thedomestic market

By early 2001 MASs sha

re of the ma

rkethad dropped to 73%

AirAsia share had climbed to 14%

AirAsia had a significantly lowercost

structure than MAS

What would you do?


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Who Are You?


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Benefits and Pitfalls

of Planning

Benefits of Planning

Planning Pitfalls


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Benefits of Planning

Intensified Effort

Persistence

Direction

Creation of Task Strategies


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Planning Pitfalls

(criticisms of planning)

Impede change and slow orprevent

adaptation Create a false sense of security

Detachment of planners


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How to Make a

Plan That Works


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Setting Goals

(SMART* Goal)

Specific

Measurable

Attainable

Realistic

Timely

* by Richard and Becky Dufour


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(SMART Goal)

SpecificA specific objective has a much greater chance of being

accomplished.

MeasurableEstablish concrete criteria for measuring progress toward theattainment of each objective you set.

eg. To obtain 5% market share within the first year of operation within ourindustry.

eg. To sell 4000 units per month, which equates to approximately 5% market

share.


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AttainableThe objective needs to be attainable by you based on the skills

and resources you have and the constraints imposed.

RealisticYour objective is probably realistic if you truly believe that it

can be accomplished. To know if your objective is realistic isto determine if you have accomplished anything similar in the

past.

eg. We still have the same set of people, an equal amount of financial

resources, we have succeed in this before, we believe that objectives set

are realistic.

eg. Considering the amount of financial resources and manpower expertise

we have, we believe that the objectives set are attainable.


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(SMART Goal)

TimelyIs there a finish and/or start date clearly stated or defined?

eg. It is the expectation that the 5% market share objective set for our

company will be achieved by the end of Dec 31st2009.

NOW consider

SMARTER Goal


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SMARTER Goal

Specific

Measurable

Attainable Realistic

Timely

Exciting Rewarding


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Goal Commitment

The determination to achieve a goal.

Increased by:

Setting goals participatively Making goals reasonable

Making goals public

O

btaining top management support


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Developing an

Effective Action Plan

Foraccomplishing a goal an action plan

lists:

(HOW) - Specific steps(WHO) - People

(WHAT) - Resources

(WHEN) - Time period


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Tracking Progress

Firstmethod

Set proximal (short-term orsub-goal) goals

Set distal (long-term orprimary) goals

Secondmethod

Gather

and provide pe

rformance feedbac

k

Make adjustments in effort, direction, and

strategies


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Maintaining Flexibility

Options-based planning

keep options open through simultaneousinvestment

invest more in promising options

Learning-based planning

plans need to be continually tested, changedand improved

encourages frequent reassessment andrevision of goals


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Planning From

Top to Bottom

Exhibit 4.3


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Planning From

Top to Bottom

Strategic Planning

Tactical Planning

Operational Planning

Top LevelManagers

MiddleLevel Managers

First-LineManagers


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Planning Timeframes

Exhibit 4.4


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Top Level Planning(Strategic Planning)

Vision

statement of a companys purpose

brief, inspirational, clear, and consistent withcompany beliefs and values

Mission

flows from the vision specific, unifying goal that stretches and

challenges the organization and has atimeframe


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Tactical Plans specify how a company will use resources, budgets,

and people to accomplish goals

Managementby Objectives develop and carry out tactical plans

foursteps

discuss goals participatively select goals

jointly develop tactical plans

meet to review performance

Middle Level Planning(Tactical Planning)

MBO. (cont)


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Management by Objectives (MBO)

Based on:

Goal specificity

Participative decision making

Explicit time period

Performance Feedback

Companies that use MBO are likely to

out-produce companies that do not use it!

MBO.


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Operational plans day-to-day plans

Single-use plans deal with unique, one-time-only events

Standing plans plans forrecurring events

three types Policies

Procedures

Rules and regulations

Budgets

Planning By First-Line Managers(Operational Planning)


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Main Reference

ChuckWilliams,(2008)

Effective Management,

3rd Ed. Thomson South-Western

(ISBN-13: 978-0-324-54849-5)Chapter4


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Review Questions

1. Discuss the benefits and pitfalls of

planning.

2. Describe how to make a plan that

works.

3. Discuss how companies can use

plans at all management levels,

from top to bottom.


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Review Questions

4. Why is planning essential in organisation

(benefits of planning)?

5. Discuss the barriers to planning

(criticisms of planning).


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Review Questions

6. Exploring the assigned business, how do you

make the plan work?


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Whyis planningessentialin

organisation?

Intensified Effort

Persistence

Direction

Creation of Task Strategies

(Benefits of Planning)


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Discussthebarriersto planning

(criticismsofplanning).

Impede change and slow orprevent

adaptation Create a false sense of security

Detachment of planners


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7. What is meant by Management by Objectives?

Review Questions


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Strengths and weaknesses of MBO

Whatismeantby

Managementby Objectives?

Concept of MBO?

Characteristics of MBO


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ConceptofMBO?

In MBO, managers and their staff work together to set commongoals.

A workers major areas of responsibility are clearly defined interms of measurable results (objectives).

These objectives are used by workers to plan their work and bymanagers to measure the progress of their staff.

Periodic appraisals of performance are made to see if progresstowards the objective is made.

MBO.

Charact ofMBO.


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MBO.

CharacteristicsofMBO.

GoalspecificityFor MBO to be effective, goals must be stated in clear, measurableterm. Goals are set for each individual in the organisation so thateveryone has clearly defined job responsibilities and objectives.

Participativedecisionmaking

Explicittime period

PerformanceFeedback

Employee participation in setting goals is crucial. Managers andstaff set objectives together in an atmosphere of mutual trust andrespects.

Within an agreed time limit, there must be enough confidence in

managers to allow staff the freedom to plan and organise theirresources in the ways they see fit to achieve objectives.

Regular reviews and performance feedback help both the managerand his staff to focus on the areas likely to give rise to problems andto plan for eventualities.

strengthsofMBO.


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StrengthsandweaknessesofMBO.

It lets individuals know what is expected of them.

It aids planning by making managers establish goals.

Communications improve between managers and their staff.

Everybody in the organisation becomes more aware of theorganisations goals.

The evaluation process becomes fairer because people aremeasured on specific targets.

MBO.

StrengthsofMBO

weaknessesofMBO.


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StrengthsandweaknessesofMBO.

MBO.

WeaknessesofMBO

Many managers complain that the MBO process involves toomuch paperwork.

MBO emphasises the interpersonal skills of discussion, goalsetting and reviewing. Many managers do not have the naturalability.

Some managers raise targets by large margins after manyperiods of steady growth placing pressure on junior managerand their staff.

MBO should not hinder creativity in managers and their staff. If

MBO puts emphasis on strict adherence to objectives but doesnot allow individual innovation, then the organisation will loseopportunities.

Performance review and counselling not properlyimplemented. For example, managers doing the appraisal maynot be fully aware of how the system should work.

end.

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