Matakuliah
Tahun
: J0562 / Management
: 2010
Foundations of Planning
Pertemuan 04 (Fourth Meeting)
Learning Outcome
Student should be able to prove the importance of
planning in every organization -> C3
Learning Outline
• What Is Planning
• Why Do Managers Plan
• How Do Managers Plan
• Establishing Goals and Developing Plans
• Contemporary Issues on Planning
1. What is Planning
a. Definition of planning:
Planning involves defining the organization’s
goal, establishing an overall strategy for
achieving those goals, and developing plans for
organizational work activities
b. Difference between informal and formal
planning
2. Why Do Managers Plan
a. Purposes of Planning:
1)
2)
3)
4)
Provide direction
Reduces uncertainty
Minimizes waste and redundancy
Establishes the goals or standards used
in controlling
b. Planning and Performance:
1) Formal planning is associated with positive
financial results as higher profit, higher returns
on assets, etc.
2) Doing a good job of planning and implementing
those plans play a bigger part in high performance
than does the extent and amount of planning done
3) In those studies, where formal planning didn’t
lead to higher performance, the external environment
often was the culprit
4) The planning/performance relationship seems to be
influenced by the planning time frame
3. How Do Managers Plan
a. The Role of Goals and Plans in
Planning
Goals are desired outcomes for individual,
groups, or entire organizations. They also
called objectives.
Plans are document that outline how goals
are going to be met. The plans usually
include resource allocations, schedules,
and other necessary actions to
accomplish the goals.
b. Types of Goals
1) Financial goals
Continue to
win market
share
globally
2) Strategic goals
Respect
to the
environment
b. Types of Plans
Breadth
Strategic
Time
Frame
Frequency
Specificity
of use
Long term Directional
Operational Short term
Specific
Single use
Standing
4. Establishing Goals and Developing
Plans
a. Approach to Establishing
Goals
1) Traditional Goal Setting
2) Management by Objective (MB0)
Four elements of MBO:
a) Goal specify
b) Participative decision making
c) An explicit time period
d) Performance feedback
3) Characteristic of Well-Designed
Goals:
a) Written in terms of outcomes rather
than actions
b) Measurable and quantifiable
c) Clear as to a time frame
d) Challenging yet attainable
e) Written down
f) Communicated to all necessary
organizational members
4) Steps in goal Setting:
a) Review the organization’s mission, the
purpose of an organization
b) Evaluate available resources
c) Determine the goals individually or with
input from others
d) Write down the goals and communicate
them to all who need to know
e) Review results and whether goals are
being met
b. Developing Plans
1) Contingency Factors in
Planning:
a) Level in the organization
b) Degree of environmental
uncertainty
c) Length of future commitments
Planning in the Hierarchy
of Organization
Strategic
Planning
Top
Executive
Middle-Level
Managers
Operational
Planning
First-Level
Managers
2) Approaches to Planning
a) Planning was done entirely by top level
managers who were often assisted by a
formal planning department, and a group
of planning specialists
b) Another approach to planning is to involve
more organizational members in the
process
5. Contemporary Issues In Planning
a. Criticisms of Planning
1) Planning may create rigidity
2) Plans can’t be developed for a dynamic
environment
3) Formal plans can’t replace intuition and
creativity
4) Planning focuses managers’ attention
on today’s competition, not on
tomorrow’s survival
5) Formal planning reinforces success,
which may lead to failure
6) Just planning isn’t enough
b. Effective Planning in Dynamic
Environments