Basic Elements of Planning and Decision Making

  Learning Objectives After studying this chapter, you should be able to:

  1. Summarize the function of decision making and the planning _process.

  2. Discuss the purpose of organizational goals , identify different _{manage multiple goals. kinds of goals, discuss who sets goals, and describe how to}

  3. Identify different kinds of organizational plans , note the time _{contingency planning. frames for planning, discuss who plans, and describe 5. Describe the basic types of operational plans used by} 4. Discuss how tactical plans are developed and executed.

  Decision Making and the Planning Process

• Decision making – Is the cornerstone of planning.
• – Is the catalyst that drives the planning process.
• – Underlies every aspect of setting goals and formulating plans.
• Planning – All organizations plan, but not in the same fashion.
• – All planning occurs within an environmental context.
• – All goals require plans to guide in their

  The Planning Process

  

The Planning Process

• • The planning process takes place within

  an environmental context. Managers

  must develop a complete and thought

  understanding of this context to determine the organization’s mission

  and develop its strategic , tactical and

  operational goals and plans.

  Organizational Goals

• Purposes of Goals – Provide

  guidance and a unified direction for people in the organization.

  other aspects of planning.

• – Strongly affect on the quality of

  motivation for employees.

• – Serve as a source of

  mechanism for evaluation and

• – Provide a

  Kinds of Goals

• By Level
• – Mission statement
• – Strategic goals
• – Tactical goals
• – Operational goals
• By Area – Different functional areas of the organization.
• By Time Frame
• – Long-term, intermediate-term, or short-term time

  Kinds of _{Organizational Goals for a} Regional Fast- _{Food Chain}

  Learning topics

• Goals: responsibilities and optimizing
• Plans
• – Timeframe – Types _{• Tactical planning – Development • Operational Planning – Types} – Execution
• Contingency planning _{– Crisis Management – Definition}

  Responsibilities of Setting Goals Sets Goals?

• Who

  :

• –All managers

  managerial responsibility for goal setting should correspond to the manager’s level in the organization.

  Responsibilities of Setting Goals

• Managing Multiple Goals
• – Optimizing allows managers to balance and

  reconcile conflicting goals

• Managers can choose to pursue one goal and exclude all others or to seek

  Time Frames for Planning

• Long-range Plans
• – Cover present and future strategic issues extending beyond five years in the future.
• Intermediate Plans

  1 to 5 years and parallel tactical

• – Cover from plans.
• – Are the principal focus of organizational planning efforts.
• Short-range Plans
• – Are operational (action) and contingency

  Action Plan

• Operationally any other kind of plan

  Reaction Plan

• A plan designed to allow the company to react to unforeseen

  

Kinds of Organizational Plans

• Strategic Plans
• – A general plan set by and for top management that outlines resource allocation, priorities, and action steps to achieve strategic goals.
• Tactical Plans
• – A plan aimed at achieving the tactical goals set by and for middle management.
• Operational Plans
• – Short-term focus plans that are set

  Planning in more details ..

• Tactical Planning • Operational Planning • Contingency

  Tactical Planning Developing TP Executing TP

  Developing and Executing Tactical Plans Developing TP Plan Goals Resources

  Developing TP _Plan • Strategic _Goals • Tactical _Resources • Human, Financial, Physical and

  Information

  Developing TP Plan

• ^{• Strategic} Goals ^{• Tactical} Resources ^{• Human, Financial, Physical and} _Information
• Human _resources

  Executing TP Evaluate ^{Information & Resources Monitor Communicat ion}

  Developing TP Plan

• ^{• Strategic} Goals ^{• Tactical} Resources ^{• Human, Financial, Physical and} _Information
• Human _resources

  Executing TP Evaluate

• Horizontally and _vertically

  Communicat _ion

• On-ongoing activities _{for goal achievement} ^{Information & Resources} _Monitor • Obtain and distribute

  Operational Planning - Types Single Use Plans Standing plans

• Program • Policy • Project
• Standard Operating Procedure

  Types of Operational Plans _{Single-use plan} Plan _{Developed to carry out a course of action not likely to} ^Description

_{Project Single-use plan of less scope and complexity than a}

_{Program Single-use plan for a large set of activities} be repeated in the future

_{Standing plan Developed for activities that recur regularly over a pe-}

program _{Policy Standing plan specifying the organiza} riod of time

_{Standard operating procedure Standing plan outlining steps to be followed in particu-}

_{response to a designated problem or situation} tion’s general lar circumstances

  

Contingency Planning

• Contingency is the determination of alternative

  courses of action to be taken if

  an intended plan is unexpectedly disrupted or rendered inappropriate. These plans help managers to cope with uncertainty and change.

• Crisis Management: managing crisis (disasters) by following a

  Responsibilities for Planning

  General _{Manager for A} ^General _{Managers for B} Line _{Manager C} ^Line _{Manager D} ^Line _{Manager E} ^Line _{Manager F} ^Line _{Manager G} ^Line _{Manager H} ^{Responsibilities of Planning 1. Identify BOD and explain their role in planning. 2. Identify CEO and explain what is her/his role in the planning process. 3. Identify the Executive Committee and explain what is their planning role. 4. What is the difference between a line and a staff managers? 5. What is the planning role of the line managers 6. Explain the planning role of “Planning Manager”. 7. Are all planning committees permanent 8. Can organization's create a planning committee for a specific purpose which}

  

_{Line Management Chief Executive Board of Directors}

Responsibilities of Planning _Office

  Planning Staff Planning Task Line Managers _{The only function of this team is to plan. They are Force managers take a broader view of planning than individual organization. As they are experts in planning, they planning activities between the different part of the}

responsible to gather information, coordinate

_{representatives from each of the major units within how to expand to Europe the team will include address special circumstances. For example to explore} This body is created when the organization wants to _{the company, the corporate planning staff, and the will be eliminated. market was formulated and implemented, this team operation. Once the plan for entering the European} management team that would run the European _{process. Nowadays, this body is more active in the planning and strategy and to govern the overall corporation.} This body is responsible to establish corporate mission _{This body is usually composed of the top executives strategy. and is responsible for the implementation of the} Plays a major role in the complete planning process _{members usually provide input to the CEO on the} in the organization working together as a group. The

  _{Executive Committee Chief Executive Office Board of Directors} Responsibilities of Planning

  Planning Staff Planning Task Force Executive Committee

Planning staff The only function of this team is to plan. They are responsible to gather information, coordinate

_{they take a broader view of planning than individual managers planning activities between the different part of the organization. As they are experts in planning, Force explore how to expand to Europe the team will include representatives from each of the major}

Planning Task This body is created when the organization wants to address special circumstances. For example to

_{units within the company, the corporate planning staff, and the management team that would run the European operation. Once the plan for entering the European market was formulated and BOD This body is responsible to establish corporate mission and strategy and to govern the overall corporation. Nowadays, this body is more active in the planning process.} implemented, this team will be eliminated. _{Executive This body is usually composed of the top executives in the organization working together as a}

CEO Plays a major role in the complete planning process and is responsible for the implementation of

_{the strategy.}

  

Committee group. The members usually provide input to the CEO on the proposals that effect their own unit

_{and to review the various strategic plans that develop from this input.}

  Board of Directors

• Establishes corporate mission and strategy.
• May engage in strategic planning.

  CEO Has a major role in planning and implementing the strategy.

  Executive Committee

• Top executives within the organization
• Frequent input to the CEO
• Review strategic plans

  Planning Staff

• Planning staff personnel gather information, coordinate planning activities, and take a broader view than individual managers.

  Line Managers

• Providers of Information • Responsible for executing the plans developed by top management.

  Planning Task Force

• Created when the organization wants a special circumstance addressed.

  Key Terms