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MultiMedia by Stephen M. Peters © 2002 South-Western

Organizational Planning


When Planning, Managers

Construct, review, and/or rewrite their organization’s mission.

Identify and analyze their opportunities.

Establish the goals they wish to achieve.

Identify, analyze, and select the course or courses of action.

Determine resources they will need to achieve their goals.


Mission Statement

References to core values.

Serves as an operational and ethical guide.

Foundation and coordinating device for the execution of management functions.


Peter Drucker and a Mission Statement: Two Questions

• What is our business?

• What should it be?

• These two questions must be raised and answered periodically.


Rule #1: Keep the statement simple; not necessarily short, but simple.

Rule #2: Allow company-wide input.

Rule #3: Involve outsiders. They can bring clarity and a fresh perspective to the statement-writing process.

Rule #4: Develop the wording and the tone to reflect the company’s personality or what the company would like to be.

Rule #5: Share the mission statement in as many creative ways as possible and in as many languages as necessary. Keep it in front of people constantly.

Rule #6: Rely on the mission statement for guidance. Challenge it continually, and judge employees by how well they adhere to its tenets. Management must say it and live it.

Rule #1: Keep the statement simple; not necessarily short, but simple.

Rule #2: Allow company-wide input.

Rule #3: Involve outsiders. They can bring clarity and a fresh perspective to the statement-writing process.

Rule #4: Develop the wording and the tone to reflect the company’s personality or what the company would like to be.

Rule #5: Share the mission statement in as many creative ways as possible and in as many languages as necessary. Keep it in front of people constantly.

Rule #6: Rely on the mission statement for guidance. Challenge it continually, and judge employees by how well they adhere to its tenets. Management must say it and live it.

Source: From Say it and Live It by Patricia Jones and Larry Kahaner. Copyright © 1995 by Kane Associates International, Inc. Used by permission of Doubleday, a division of Bantam Doubleday Dell Publishing Group, Inc.

Six Rules for Writing and Implementing Mission Statements


Characteristic Explanation

Specific and measurable Not all objectives can expressed in numericterms, but they should be quantified when possible.

Realistic and challenging Impossibly difficult objectives demotivate people. Objectives should be challenging but attainable, given the resources and skills available.

Focused on key result areas Goals should focus on key results--sales, profits, production, or quality.

Cover a specific period A measurable objective is stated in terms of the time in which it is to be completed. Short-term goals should complement long-term goals.

Reward performance Objectives are meaningless if they are not directly related to rewards for performance.

Characteristic Explanation

Specific and measurable Not all objectives can expressed in numericterms, but they should be quantified when possible.

Realistic and challenging Impossibly difficult objectives demotivate people. Objectives should be challenging but attainable, given the resources and skills available.

Focused on key result areas Goals should focus on key results--sales, profits, production, or quality.

Cover a specific period A measurable objective is stated in terms of the time in which it is to be completed. Short-term goals should complement long-term goals.

Reward performance Objectives are meaningless if they are not directly related to rewards for performance.

Characteristics of Effective Goals and Objectives


Plans Answer Six Basic Questions

① What identifies the specific goals to be accomplished.

② When answers a question of timing.

③ Where concerns the place or places where the plan will be executed.

④ Who identifies specific people who will perform specific tasks.

⑤ How involves the specific actions to be taken to reach the goals.

⑥ How much is concerned with the expenditure of resources needed to reach the goals–both long- and short-term.


Stretch Goals Require Great Leaps Forward on

• Product development time

• Return on investment

• Sales growth

• Quality improvement

• Reduction of manufacturing cycle times


Strategy

A course of action created to achieve a long-term goal.

Exists for an entire organization or for its autonomous units or functional areas.


Plans Need Resources

• People• Money• Facilities• Equipment• Supplies• Information

• People• Money• Facilities• Equipment• Supplies• Information


Types of Plans

Strategic Plan

Contains the answers to who, what, when, where, and how.

Concerned with the entire organization’s direction and purpose.

How the organization intends to grow, compete, and meet its customers’ needs.


Tactical Plan

Is concerned with major organizational subsystems:-what they must do-how they must do it-when things must be done-where activities will be performed-what resources are to be utilized-who will have the authority

Has more details

Shorter time frames

Narrower scope than strategic plans

Usually one year or less

Types of Plans


Operational Plan

Support of tactical plans.

First-line manager’s tool for executing daily, weekly, and monthly activities.

Operational Plan

Support of tactical plans.

First-line manager’s tool for executing daily, weekly, and monthly activities.

Types of Plans


Strategic Plan Deals With Future Events

Will there be a recession?

Will inflation continue at its present

rates?

What will be the situation in our industry with regard to

local, state, and federal regulations?

What will the competition do?


An Organization’s Mission and Levels of Goals


Operational Plans

Single-Use Plan

Once the activity is completed, the plan is no longer needed.

Examples are programs and budgets.

Standing Plan

Specifies how to handle continuing or recurring activities.

Continues to be useful over many years.

Examples include policies, procedures, and rules.

Single-Use Plan

Once the activity is completed, the plan is no longer needed.

Examples are programs and budgets.

Standing Plan

Specifies how to handle continuing or recurring activities.

Continues to be useful over many years.

Examples include policies, procedures, and rules.


Hierarchy of Unified Goals and Objectives


Assessing theInternal Environment Considerations

Human resources

Material resources

Financial resources

Time

Informational resources

Needs of internal customers


Assessing the ExternalEnvironment Considerations

Strengths and weaknesses of suppliers.

Availability of additional labor and technology.

Needs of external customers.


Implementing the Plan

Who will do what

By what date

What resources


Planning is Based On

Assumptions … what planners believe to be true and real.

Forecasts … predictions about the probable state of relevant conditions over the span of time covered in their plans.


Planning Tools

Management by Objectives (MBO)

-a technique that emphasizes collaborative objective setting by managers and their subordinates.

Linear Programming

-a planning tool that can be used to determine the optimum combination of resources and activities.


Lack of commitment Fear of failure Out-of-date or inaccurate information Failure to consider the long term Overreliance on the planning department Overemphasis on controllable variables

Barriers to Effective Planning

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key result areas goals

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key results

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