Introduction to Planning | Effective Planning in Dynamic Environments.
Introduction to Planning: This article will teach us about the definition of Planning, Purpose of Planning, Planning, and Performance, Types of Plan, Steps in Planning, Characteristics of a good design goal, Traditional goal settings versus Management by Objective (MBO), Steps in a typical MBO Program, Evaluation of MBO, Criticisms of Planning and Effective Planning in Dynamic Environments.
Planning is a particular kind of decision making that addresses the specific future that managers desire for their organizations. Planning is the first of the four major activities in the management process. Planning, organizing, leading and controlling. We might think of planning as the locomotive that drives a train of organizing, leading and controlling activities.
Recommended: Management Decision Making
- Planning involves defining the organization’s goals, establishing and overall strategy for achieving those goals, and developing plans for organizational work activities.
- Planning is defined as preparing course of action, setting company objective, determining strategy and selecting alternative course of action.
Planning is concerned with both ends (what’s to be done) and means (how it’s to be done). It is an ongoing process that reflects and adapts to changes in the environment surrounding each organization planning can either be formal or informal and managers plan. In informal planning, nothing is written down, and there is little or no sharing of goals with others in the organization.
Also, informal planning is general and lacks continuity, it is more common in smaller organizations, but does exist in some large organization. In formal planning, specific goals covering a period of years are defined.
These goals are written and shared with organizational members to reduce ambiguity and create a common understanding about what needs to be done. Finally, specific action plans exist for achieving these goals: i.e. mandates define how the goods will be reached.
PURPOSES OF PLANNING
We can identify at least four why managers need to plan first. planning provides direction to managers and non-managers alike. When employees know what their organization or work and is trying to accomplish and what they must contribute to reach goals, they can coordinate their activities, cooperate with each other, and do what it takes to accomplish those goals.
Second planning reduces uncertainty by forcing mandates to look ahead, anticipate change, consider the input of change, and develop appropriate response. Even through planning cannot eliminate change or uncertainty, managers plan in order to anticipate change and to develop the most effective response to.
Third planning minimizes waste and redundancy. When work activities are coordinated around established plans, redundancy can be minimized. Furthermore, when main and ends are made clear through planning. Inferences become obvious and can be corrected or eliminated.
Forth planning establishes the goals or standard used in controlling. If we’re ensure of what were are trying to accomplish, how can we determine whether we have actually done so, when managers plan, they develop goals and plans, when they control, they see whether the plans have been carried out and the goals met virtuous planning, there would be no way to control.
PLANNING AND PERFORMANCE
No manager and organizations that plan outperform those that don’t? Although most studies showed generally positive relationships between planning and performance, we can’t say that organizations that formally plan throughout perform those that don’t plan. What can we conclude from these studies.
Formal planning is associated with positive financial results such as higher profits, higher returns of asset, etc also 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.
Where formal planning did not lead to higher performance, the external environment often was the culprit. Critical environmental forces such as governmental regulations and powerful labour unions often constrain managers’ option and reduce the impact of planning on an organization’s performance.
TYPES OF PLANS
Organisations are typically managed according to two types of plans strategize plans are designed by high ranking managers and define the broad goals for the organization. Operational plans contain details for carrying out, or implementing, those strategic plans in day-to-day activities.
The most popular ways to describe organizational plans are by their breadth (strategic vs. operational). Time frame (short term vs long term), specificity (Directional vs specific), and frequency of use (single-use vs standing).
Strategic Plans: Are plans that apply to the entire organization, establish the organization’s overall goals, seek to position the organization in terms of its environment. Strategic plans tend to cover the longer time frame and the broader view of the organization.
Operational plans are plans that specify the details of how the overall goals are to be achieved, they tend to cover shorter time periods monthly, weekly, and day-to-day.
The difference is years between short term and long term has decreased considerably. Long term used to mean anything over seven(7) years. As organizational environment have become more uncertain, the definition of long term has changed. We define Long term plans as those with the time frame beyond three(3) years, and Short term plans as those covering one year or less. The intermediate term is anytime period in between.
Specific plans: Are plans that are clearly defined and that leave no room for interpretation. They have clearly defined objectives-there’s no ambiguity and no problems with understanding.
When uncertainty is high and managers must be flexible in order to respond to unexpected changes, directional plans are preferable Directional plans are flexible plans that set out general guidelines. They provide focus but don’t lock managers into specific goals or course of action
Some plans that managers develop are ongoing while others are used only once. A single-use plan is a one-time plan specifically designed to meet the needs of a unique situation. In contrast, standing plans are ongoing plans that provide guidance for activities performed repeatedly-standing plans include policies, rules and procedures.
STEPS IN PLANNING
The planning process is very much like the decision making process. The basic steps in the management planning process involve creating a road map that cut-lines each task the company must accomplish to meet it overall objectives.
- Access Current Condition: Before goals and objectives can be established the current state of the firm must be assessed. In strategic planning, for example, this includes the firms resources as well as market trends. Economic indicates and competitive factors. This step basically assesses the company’s strength and weakness.
- Determine Goals and Objectives: The next step is to identify specific company goals and objectives. It should include a detailed overview of each goods including the reason for its selection and the anticipated outcomes of goal related projects where possible, objectives should be described in quantitative or qualitative terms. It is also important to prescribe the means to achieve each goals and objective and goals should be poetized.
- Identify and Allocate Resources: Each goal should have financial, human resources, time and other assets projections associated with its completion and all these resources should be allocated accordingly.
- Implementation: Implementation concerns the delegation of task objective driven action and collection of feedback data. Without effective implementation, the three proceeding steps are pointless.
- Control: This process involves managing ongoing work activities to ensure that the intended objectives are met or adjusted, controlling also includes all managerial activities dedicated to ensuring that actual result conform to planned results. Managers must provide information that reports actual performance and permits comparison of the performance against standard.
CHARACTERISTICS OF A WELL DESIGNED GOALS
Goals are not all created equal. Some goals are better at stating desired outcomes than others are. What makes a well-designed goal?
- A well-designed goal should be written in terms of outcome rather than action.
- A goal should be measurable and quantifiable
- A well designed goal should be clear do to time frame
- It should be challenging but attainable
- It should be communicated to all organizational members.
TRADITIONAL GOAL SETTING VERSUS MANAGEMENT BY OBJECTIVE (MBO)
In the traditional goal setting, goals are set at the top of the organization and then broken into sub-goals for each organizational level, the goals from the top are passed down to the next organizational level and written to reflect the work responsibilities of that level, passed down to the next level, and so forth, this traditional perspective assumes that top managers know what is best because they see the “big picture”. Employees work to meet the goals that have been assigned in their areas of responsibility.
The problem with this traditional approach is that if top managers define the organizational goals in broad terms. Such as achieving “sufficient profits” or inverting “market leadership” – these ambiguous goals have to be made more specific as they flow down through the organization. At each level, managers define the goals applying their own interpretations and biases as they make them more specific.
Management by objective was first proposed by peter Drucker in his 1954 book the practice of management. It came as an alternative apportion to establishing goals. MBO is the process of setting mutually agreed-upon goals and using these goals to evaluate employee performance. In MBO, specific performance goal are jointly determined by employees and their managers, progress forward accomplishing these goals is periodically reviewed and rewards the allocated on the basis of this progress.
- MBO provides a way i.e. integrate and focus the efforts of all organize members on the goals of higher management and overall organizational strategy.
- Another key to MBO is its insistence on the active involvement of managers and staff members at every organizational level, otherwise, people might refuse to cooperate or make only half-heated efforts to implement someone else objectives.
STEPS IN A TYPICAL MBO PROGRAM
- The organization’s overall objectives and strategies are formulated
- Major objectives are allocated among divisional and departmental unit
- Unit managers collaboratively set specific objectives for their units with their managers.
- Specific objectives are collaboratively set with all department members
- Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees.
- The action plans are implemented
- Progress toward objectives is periodically reviewed, and feedback is provided
- Successful achievement of objectives is reinforced by performance based rewards.
EVALUATION OF MBO
One study concluded individuals who are successful in achieving the goals they have set tend to aim for increased performance. Employees who receive specific and timely feedback perform better, and those who participate in goal setting show higher performance levels.
The study also concluded that the very process of participation leads to increased communication understanding between managers and those they supervise.
CRITICISMS OF PLANNING
- Planning may create Rigidity: Formal planning effects can lock an organization into specific goals to be achieved within specific timetables when those goals were set, the assumption may have been that the environment wouldn’t change during the time period the goals covered. If that assumption is faulty, managers who follow and plan may face trouble, foreign and course of action when the environment is changing can be a recipe for disaster.
- Plans can’t be developed for the Dynamic Environment: Most organization today face dynamic environments. If a base assumption of making plans – that the environment won’t change – is faulty, then how can you make plans at all? Managing under chaotic, random and unpredictable conditions requires flexibility and that may mean not being tied to formal plans.
- Formal plans can’t replace intuition and creativity: Successful organization are typically the result of someone’s innovative vision. But visions have a tendency to become formalized as they evolve. Formal planning efforts typically involve a thorough investigation of the organizations capabilities and opportunities and a mechanical analysis that reduces the vision to some type of programmed routine. Example of Apple computer.
- Formal planning reinforces success, which may lead to failure: Success breech success, if it’s not broken, don’t fix it. Well, sometimes this may be wrong, success may, in fact, breed failure in the uncertain environment. It’s hard to change or disease previously successful plans – to leave the comfort of what works for the anxiety of the unknown. Many managers will not face the unknown until they are forced to do so by environmental changes. By then, it may be too late.
- Just Planning isn’t enough: It’s not enough for mangers just to plan. They have to start dong!
EFFECTIVE PLANNING IN DYNAMIC ENVIRONMENTS
In an uncertain environment, managers want to develop plans that are specific, but flexible. To be useful, plans need some specificity, but the plans should not be cast in stone. Managers must recognize that planning is an ongoing process.
The plans serve as a roadmap although the destination may be changing constantly due to dynamic market conditions. They should be willing to change directions if environmental conditions warrant. This flexibility is particularly important as plans are implemented. Managers must stay alert to environmental changes that could impact the effective implementation of plans and make change as needed.
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