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Foundations
of Planning
In this chapter, we begin our study of
the first of the management functions:
planning.
Planning is important because it
establishes what an organization is
doing. Well look at how managers set
goals as well as how they establish
plans. Focus on the following learning
outcomes as you read and study this
chapter.
Learning Outcomes
7.1 Define the nature and purpose of
planning.
7.2 Classify the types of goals
organizations might have and the plans
they use.
7.3 Compare and contrast approaches
to goal setting and planning.
7.4 Discuss contemporary issues in
planning.
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S E V E N
ANNOTATED OUTLINE
INTRODUCTION
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purposes.
1.
C.
2.
Effective
planning
and
implementation play a greater part in high
performance than does the amount of planning
done.
2.
Studies have shown that when
formal planning has not led to higher performance,
the external environment is often the reason.
HOW DO MANAGERS PLAN?
Planning is often called the primary management function
because it establishes the basis for all other functions. Planning
involves two important elements: goals and plans.
A.
Types of Goals
1.
Goals (often called objectives) are desired
outcomes for individuals, groups, or entire
organizations.
2.
Types of goals
a.
Financial performance versus strategic
b.
Stated goals versus real goals
1)
Stated goals are official statements
of what an organization says and what
it wants its various stakeholders to
believe its goals are.
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2)
B.
3.
2.
3.
B.
Developing Plans
The process of developing plans is influenced by three
contingency factors and by the particular planning
approach used by the organization.
1.
Contingency Factors in Planning:
a.
Managers level in the organization (see
Exhibit 7-5). Operational planning usually
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2.
Is MBO Manipulation?
In this critical thinking exercise, students are asked to consider an ethical dilemma
faced by Proctor & Gamble during a bird-flu pandemic in Asia. At that time, Asian
countries were horrified by the prospect of a deadly disease passed by one of the
planets most potentially mobile carriers. The dilemma occurs when Proctor & Gamble
considers reserving a drug treatment for their employees at the cost of distributing it
to those who may need it.
You might want to address this ethical dilemma by asking students to place
themselves in the position of a Proctor & Gamble employee or someone infected with
the bird-flu virus. Ask students to go through a scenario of a) Proctor & Gamble
reserving treatment and any potential negative press that would occur if lives were
lost that could have been saved by the treatment, and b) what would happen if Proctor
& Gamble had employees who contracted the virus and the company did nothing to
help.
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4.
1.
2.
3.
4.
5.
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The late Peter Drucker, an eminent management author, identified the SMART
format for setting goals back in 1954: S (specific), M (measurable), A
(attainable), R (relevant), and T (time bound). Is this format still relevant
today? Discuss.
Of all of the material presented in this chapter, most students will readily
recall this acronym for goal setting. These qualities from Drucker have
remained basically unaltered and have been cited in numerous texts and
studies. As a part of student discussion, try to find other application for
Druckers work in this area beyond the management of employees. What
about for school children? Volunteers working for a community program?
7.
Practice setting goals for various aspects of your personal life, such as
academics, career preparation, family, hobbies, and so forth. Set at least two
short-term goals and at least two long-term goals for each area.
For the goals that you have set, write out plans for achieving those goals.
Think in terms of what you will have to do to accomplish each one. For
instance, if one of your academic goals is to improve your grade-point
average, what will you have to do to reach that goal?
Write a personal mission statement. Although this may sound simple to do,
its not going to be simple or easy. Our hope is that it will be something that
youll want to keep, use, and revise when necessary...that it will be something
that helps you be the you youd like to be and helps you live the life youd like
to live. Start by doing some research on personal mission statements. There
are some wonderful Web resources that can guide you. Good luck!
Interview three managers about the types of planning they do. Ask them for
suggestions on how to be a better planner. Write a report that describes and
compares your findings.
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In your own words, write down three things you learned in this chapter about
being a good manager.
WORKING
Exercise
TOGETHERTeam-Based
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