PowerPoint Presentation

to Accompany
Management, 8/e
John R. Schermerhorn, Jr.

Chapter 8:
Planning – Processes and Techniques

Prepared by: Jim LoPresti

University of Colorado, Boulder
Published by: John Wiley & Sons, Inc.
 Planning Ahead — Chapter 8 Study Questions

Why and how do managers plan?

What types of plans do managers
use?

What are the useful planning tools
and techniques?

How does management by objective
operate?

Management 8/e - Chapter 8 2

Study Question 1: Why and how do managers plan?

Planning
 The process of setting objectives and
determining how to best accomplish them.

Objectives
 Identify the specific results or desired
outcomes that one intends to achieve.

Plan
 A statement of action steps to be taken in
order to accomplish the objectives.

Management 8/e - Chapter 8 3

Study Question 1: Why and how do managers plan?

Steps in the planning process:

 Define your objectives.
 Determine where you stand vis-à-vis objectives.
 Develop premises regarding future conditions.
 Analyze and choose among action alternatives.
 Implement the plan and evaluate results.

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Figure 8.1 The roles of planning and controlling in
the management process.

Management 8/e - Chapter 8 5

Study Question 1: Why and how do managers plan?

Benefits of planning:
 Improves focus and flexibility.
 Improves action orientation.
 Improves coordination.
 Improves time management.
 Improves control.

Management 8/e - Chapter 8 6

Figure 8.2 A sample means-ends chain for total
quality management.

Management 8/e - Chapter 8 7

Study Question 2: What types of plans do managers
use?

Short-range and long-range plans

 Short-range plans = 1 year or less
 Intermediate-range plans = 1 to 2
years
 Long-range plans = 3 or more years

People vary in their capability to

deal effectively with different time
horizons.

Higher management levels focus on
longer time horizons.
Management 8/e - Chapter 8 8
 Study Question 2: What types of plans do managers
use?

Strategic and operational plans

 Strategic plans — set broad, comprehensive, and
longer-term action directions for the entire
organization.
 Operational plans — define what needs to be done
in specific areas to implement strategic plans.
 Production plans

 Financial plans

 Facilities plans

 Marketing plans

 Human resource plans

Management 8/e - Chapter 8 9

Study Question 2: What types of plans do managers
use?

Policies and procedures

 Standing plans
 Policies and procedures that are designed
for repeated use.
 Policy
 Broad guidelines for making decisions and
taking action in specific circumstances.
 Rules or procedures
 Plans that describe exactly what actions
are to be taken in specific situations.

Management 8/e - Chapter 8 10

Study Question 2: What types of plans do managers
use?

Budgets and project schedules

 Single-use plans
 Only used once to meet the needs and
objectives of a well-defined situation in a
timely manner.
 Budgets
 Single-use plans that commit resources to
activities, projects, or programs.
 Fixed, flexible, and zero-based budgets.
 Projects
 One-time activities that have clear beginning
and end points.
 Project management and project schedules.

Management 8/e - Chapter 8 11

Study Question 3: What are the useful planning tools
and techniques?

Forecasting
 Making assumptions about what will happen in
the future.
 Qualitative forecasting uses expert opinions.
 Quantitative forecasting uses mathematical
and statistical analysis.
 All forecasts rely on human judgment.
 Planning involves deciding on how to deal with
the implications of a forecast.

Management 8/e - Chapter 8 12

 Study Question 3: What are the useful planning tools
and techniques?

Contingency planning
 Identifying alternative courses of action
that can be implemented to meet the
needs of changing circumstances.
 Contingency plans anticipate changing
conditions.
 Contingency plans contain trigger points.

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Study Question 3: What are the useful planning tools
and techniques?

Scenario planning
 A long-term version of contingency
planning.
 Identifying alternative future scenarios.
 Plans made for each future scenario.
 Increases organization’s flexibility and
preparation for future shocks.

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Study Question 3: What are the useful planning tools
and techniques?

Benchmarking
 Use of external comparisons to better
evaluate current performance and
identify possible actions for the future.
 Adopting best practices of other
organizations that achieve superior
performance.

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Study Question 3: What are the useful planning tools
and techniques?

Use of staff planners

 Coordinating the planning function for

the total organization or one of its
major components.

 Possible communication gaps between

staff planners and line management.

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 Study Question 3: What are the useful planning tools
and techniques?

Participation and involvement

 Participatory planning requires that the planning
process include people who will be affected by the
plans and/or will help implement them.
 Benefits of participation and involvement:
 Promotes creativity in planning.
 Increases available information.
 Fosters understanding, acceptance, and
commitment to the final plan.

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Figure 8.3 How participation and involvement help
build commitments to plans.

Management 8/e - Chapter 8 18

Study Question 4: How does management by
objectives operate?

Management by Objectives (MBO)

 A structured process of regular
communication.
 Supervisor/team leader and workers
jointly set performance objectives.
 Supervisor/team leader and workers
jointly review results.

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Figure 8.4 Management by objectives as an
integrated planning and control framework.

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Study Question 4: How does management by
objectives operate?

MBO involves a formal agreement

specifying …
 Workers’ performance objectives for a specific
time period.
 Plans through which performance objectives
will be accomplished.
 Standards for measuring accomplishment of
performance objectives .
 Procedures for reviewing performance results.

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Study Question 4: How does management by
objectives operate?

The MBO process:

 Supervisor and workers jointly set
objectives, establish standards, and
choose actions.
 Workers act individually to perform
tasks; supervisors act individually to
provide necessary support.
 Supervisor and workers jointly review
results, discuss implications, and renew
the MBO cycle.

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Study Question 4: How does management by
objectives operate

Types of MBO performance objectives

 Improvement
 Personal development
 Maintenance

Criteria for effective performance
objectives
 Specific
 Time defined
 Challenging
 Measurable

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Study Question 4: How does management by
objectives operate?

Pitfalls to avoid in using MBO

 Tying MBO to pay.
 Focusing too much attention on easily
quantifiable objectives.
 Requiring excessive paperwork.
 Having managers tell workers their
objectives.

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Study Question 4: How does management by
objectives operate?

Advantages of MBO
 Focuses workers on most important
tasks and objectives.
 Focuses supervisor’s efforts on
important areas of support.
 Contributes to relationship building.

 Gives workers a structured opportunity

to participate in decision making.

Management 8/e - Chapter 8 25

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