1.Planning
1.1.Key concepts
Goal, management (top, middle and lower), goal-setting by management, planning
process, strategic goals, functional (tactical) goals, operational goals, hierarchical
approach, development of plans, management by objectives (MBO)
1.2.Why planning is needed?
LO1: Explain why planning is needed in the organisation.
Planning is process of setting goals and deciding how to achieve it.
Benefits of planning:
• Gives direction (road map)
o Goals – desired future state over fixed period of time
o Plan – how goals are to be achieved
• Helps with coordination, cohesion and stability of organisation
• Force organisation to look at future & anticipate change
• Reduces impact of change : future-orientated thus minimise threats
• Facilitates control
• Resource planning
• Motivate employees
Costs of planning
• May create rigidity
• Consumes management’s time
• Replace intuition & creativity
• Cause delays in decision-making
1.3.Managerial goals and plans
LO2: Explain what a goal is.
Goal is desired future state that the organisation sets for itself over a fixed period of time.
Nature of goals:
• Time period: long-term, medium-term or short-term
• Publicly stated or not
LO5: Discuss the requirements that must be met when setting goals.
Goals need to be SMART:
• Specific (provide road map – everyone needs to know what is expected of them)
, o What the goal relates to, the period & specific desired results
• Measurable (objective & quantifiable)
• Attainable (Assign responsibility to attain goals to specific people)
o Realistic & challenging
• Relevant
o Relate to organisation’s mission & strategic goals
o Horizontal consistency – departmental objectives are consistent
o Vertical consistency – departmental & subsection goals are consistent
• Time-bound (specific time limit)
Management by objectives (MBO)
• Managers & employees jointly set goals
o Improves employee motivation
• Progress towards attainment of these goals is periodically assessed.
• Process:
o Manager & employee has initial discussions – clear job description &
KPA’s
o Employee establishes potential key performance targets.
o Manager & employee meet to develop set of goals and agree on
checkpoints to evaluate employee’s progress
o Manager evaluate degree of goal-attainment
1.4.The planning process
LO3: Discuss the steps in the planning process.
Dynamic process. Forms foundation of other management tasks.
Planning parameters:
• Organisation’s mission (purpose)
• Environment
• Manager values
• Manager experience
Planning steps:
• Goal-setting
o Consider organisation’s mission
• Developing plans
o Based on information obtained from environmental scan
o Develop alternative plans
o Evaluate alternative plans
o Select a plan
• Implementation
o Through other management functions (organising, allocation, leading &
control)
o Develop framework for execution of plans
• Reactive planning
o Feedback loop – ‘learn from mistakes’
o Also when changes occur in environment
o Deviation from plans
