Management: Arab World Edition Robbins, Coulter, Sidani, Jamali
Text of Chapter 7: Foundations of Planning
Management: Arab World Edition Robbins, Coulter, Sidani, Jamali Chapter 7: Foundations of Planning Lecturer: [Insert your name here]
7-3 Copyright 2011 Pearson Education Learning Outcomes Follow this Learning Outline as you read and study this chapter. 7.1 Define the nature and purpose of planning Define planning. Describe the purposes of planning. Explain what studies have shown about the relationship between planning and performance. Understand the dynamics of planning in Arab culture. 7.2 Goals And Plans Define goals and plans. Describe the types of goals organizations might have. Describe each of the different types of plans.
7-4 Copyright 2011 Pearson Education 7.3 Setting Goals and Developing Plans Discuss how traditional goal setting and MBO work. Describe well-written goals and explain how to set them. Discuss the contingency factors that affect planning. Describe the approaches to planning. 7.4 Contemporary Issues in Planning Explain the criticisms of planning. Describe how managers can effectively plan in todays dynamic environment. Learning Outcomes
7-5 Copyright 2011 Pearson Education 1. Define planning. 2. Describe the purposes of planning. 3. Explain what studies have shown about the relationship between planning and performance. 4. Understand the dynamics of planning in Arab culture. Define the nature and purpose of planning
7-6 Copyright 2011 Pearson Education What Is Planning? Planning A primary managerial activity that involves: Defining the organizations goals Establishing an overall strategy for achieving those goals Developing plans for organizational work activities Formal planning Specific goals covering a specific time period Written and shared with organizational members
7-7 Copyright 2011 Pearson Education Why Do Managers Plan? Purposes of Planning Provides direction Reduces uncertainty Minimizes waste and redundancy Sets the standards for controlling
7-8 Copyright 2011 Pearson Education Planning and Performance Formal planning is associated with: Higher profits and returns on assets. Positive financial results. The quality of planning and implementation affects performance more than the extent of planning. The external environment can reduce the impact of planning on performance. Formal planning must be used for several years before planning begins to affect performance.
7-9 Copyright 2011 Pearson Education Planning in Arab Culture Planning is underdeveloped in Arab societies some attribute this to an Arab culture that is supposedly fixated on the past and resists planning for the future. Fatalism the belief in predestination, in the sense that a person has no control over things that happen to him as things have already been predestined from God. This is a mistaken understanding of Qadar. Belief in Qadar does not mean that people should not plan.
7-10 Copyright 2011 Pearson Education Planning in Arab Culture (contd) Early Arabs planned, which explains their successes. Later, however, fatalism as a historic practice, not a religious doctrine has displayed itself in their societies. What is needed is a gradual development in value systems, leading to the notion that planning is required to succeed and this is in fact in harmony with religious teachings.
7-11 Copyright 2011 Pearson Education Planning in Arab Culture (contd) Emergence of many successful Arab entrepreneurs and managers. They built their businesses on proper planning and adequate organization. This demonstrates that they have been progressively adopting modern managerial standards.
7-12 Copyright 2011 Pearson Education 1. Define goals and plans. 2. Describe the types of goals organizations might have. 3. Describe each of the different types of plans. Goals And Plans
7-13 Copyright 2011 Pearson Education How Do Managers Plan? Elements of Planning Goals (also Objectives) Desired outcomes for individuals, groups, or entire organizations Provide direction and evaluation performance criteria Plans Documents that outline how goals are to be accomplished Describe how resources are to be allocated and establish activity schedules
7-14 Copyright 2011 Pearson Education Types of Goals Financial Goals are related to the expected internal financial performance of the organization. Strategic Goals are related to the performance of the firm relative to factors in its external environment (e.g., competitors). If managers emphasize only one goal, other goals necessary for long-term success are ignored.
7-15 Copyright 2011 Pearson Education SMART Objectives Specific Measurable Time bound Relevant Attainable
7-16 Copyright 2011 Pearson Education Types of Goals (contd) Stated goals can be found in an organizations charter, annual report, or public relations announcements, or in public statements made by managers. These broadly-worded official statements of the organization (intended for public consumption) that may be irrelevant to its real goals (what actually goes on in the organization).
7-17 Copyright 2011 Pearson Education Exhibit 71 Types of Plans
7-18 Copyright 2011 Pearson Education Types of Plans: Breadth Strategic Plans Apply to the entire organization. Establish the organizations overall goals. Seek to position the organization in terms of its environment. Cover extended periods of time. Operational Plans Specify the details of how the overall goals are to be achieved. Cover a short time period.
7-19 Copyright 2011 Pearson Education Types of Plans Long-Term Plans Plans with time frames extending beyond three years Short-Term Plans Plans with time frames of one year or less
7-20 Copyright 2011 Pearson Education Types of Plans (contd) Directional Plans Flexible plans that set out general guidelines and provide focus, yet allow discretion in implementation Specific Plans Plans that are clearly defined and leave no room for interpretation
7-21 Copyright 2011 Pearson Education Types of Plans (contd) Single-Use Plan A one-time plan specifically designed to meet the need of a unique situation Standing Plans Ongoing plans that provide guidance for activities performed repeatedly
7-22 Copyright 2011 Pearson Education 1. Discuss how traditional goal setting and MBO work. 2. Describe well-written goals and explain how to set them. 3. Discuss the contingency factors that affect planning. 4. Describe the approaches to planning Setting Goals and Developing Plans
7-23 Copyright 2011 Pearson Education Setting Goals and Developing Plans 1. Approaches to Setting Goals Traditional goal setting MBO Characteristics of well-written goals 2. Developing Plans Contingency factors in planning Approaches to Planning
7-24 Copyright 2011 Pearson Education Traditional Goal Setting Broad goals are set at the top of the organization. Goals are then broken into sub-goals for each organizational level. Assumes that top management knows best because they can see the big picture. Goals are intended to direct, guide, and constrain from above. Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility.
7-25 Copyright 2011 Pearson Education Exhibit 72 The Downside of Traditional Goal Setting
7-26 Copyright 2011 Pearson Education MeansEnds Chain The integrated network of goals that results from establishing a clearly-defined hierarchy of organizational goals. Achievement of lower-level goals is the means by which to reach higher-level goals (ends). Maintaining the Hierarchy of Goals
7-27 Copyright 2011 Pearson Education Specific performance goals are jointly determined by employees and managers. Progress toward accomplishing goals is periodically reviewed. Rewards are allocated on the basis of progress towards the goals. Key elements of MBO: Goal specificity, participative decision making, an explicit performance/evaluation period, feedback Management By Objectives (MBO)
7-28 Copyright 2011 Pearson Education Exhibit 73 Steps in a Typical MBO Program 1. The organizations overall objectives and strategies are formulated. 2. Major objectives are allocated among divisional and departmental units. 3. Unit managers