copyright © houghton mifflin company. all rights reserved. 6-1 chapter 6 the basics of planning and...
TRANSCRIPT
![Page 1: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/1.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-1
Chapter 6
The Basics of Planning and Project Planning
![Page 2: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/2.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-2
Chapter Outline
Coping with Uncertainty Three Types of Uncertainty Organizational Responses to Uncertainty Balancing Planned Action and Spontaneity in
the 21st Century
![Page 3: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/3.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-3
Chapter Outline (continued)
The Essentials of Planning Organizational Mission Types of Planning Objectives Priorities The Planning / Control Cycle
![Page 4: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/4.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-4
Chapter Outline(continued)
Management by Objectives and Project Planning
Management by Objectives Project Planning
![Page 5: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/5.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-5
Chapter Outline(continued)
Graphic Planning / Scheduling / Control Tools
Sequencing with Flow Charts Scheduling with Gantt Charts PERT Networks
![Page 6: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/6.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-6
Chapter Outline(continued)
Break-even Analysis Fixed Versus Variable Costs The Algebraic Method The Graphic Method Break-even Analysis: Strengths and
Limitations
![Page 7: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/7.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-7
COPING WITH UNCERTAINTY
Three Types of Uncertainty
State uncertainty: the environment, or a portion of it, is unpredictable.
(e.g., “Will it rain the day of our wedding?”)
![Page 8: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/8.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-8
COPING WITH UNCERTAINTY (continued)
Effect uncertainty: inability to predict the effects of specific environmental changes or events.
(e.g., “Will our outdoor reception guests get disgusted and leave early if it rains?”)
![Page 9: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/9.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-9
COPING WITH UNCERTAINTY (continued)
Response uncertainty: being unable to predict the consequences of a particular decision or organizational response.
(e.g., “Will our outdoor wedding reception still be fun if we decide to have it inside rented tents and it doesn’t rain?”)
![Page 10: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/10.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-10
ORGANIZATIONAL RESPONSES TO UNCERTAINTY
1. Defenders: “Be very good at doing a few things.”
2. Prospectors: “Stay a step ahead of the competition.”
3. Analyzers: “Follow the leader.”
4. Reactors: “If it isn’t broken, don’t fix it.”
![Page 11: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/11.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-11
ORGANIZATIONAL MISSION STATEMENTS
A well-written mission statement should do these things:
1. Define your organization for key stakeholders.
2. Create an inspiring vision of what the organization can be and can do.
3. Outline how the vision is to be accomplished.
4. Establish key priorities.
![Page 12: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/12.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-12
ORGANIZATIONAL MISSION STATEMENTS
(continued)
5. State a common goal and foster a sense of togetherness.
6. Create a philosophical anchor point for all organizational activities.
7. Generate enthusiasm and a “can do” attitude.
8. Empower present and future organization members to believe every individual is a key to success.
![Page 13: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/13.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-13
ORGANIZATIONAL MISSION STATEMENTS
(continued)
Individual or Team Exercise: Select an organization and write a mission statement for it.
![Page 14: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/14.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-14
Figure 6.1 Planning: The Primary Management Function
![Page 15: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/15.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-15
TYPES OF PLANNING AND PLANNING HORIZONS
Strategic Planning: process or determining how to pursue long-term goals with available resources.
Intermediate planning: process of determining the contribution subunits can make with allocated resources.
Operational planning: process of determining how specific tasks can best be accomplished on time with available resources.
![Page 16: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/16.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-16
TYPES OF PLANNING AND PLANNING HORIZONS
(continued)
Planning horizon: the time that elapses between the formulation and the execution of a planned activity.
Strategic planning horizon = One to ten years
Intermediate planning horizon = Six months to two years
Operational planning horizon = One week to one year
![Page 17: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/17.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-17
Figure 6.2 Types of Planning
![Page 18: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/18.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-18
EXERCISE: CAN YOU WRITE GOOD OBJECTIVES?
A well-written objective satisfies these three criteria:
1. It tells exactly what the intended result is.
2. It specifies when the intended result is to be accomplished.
3. It tells how the intended result will be measured.
![Page 19: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/19.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-19
EXERCISE: CAN YOU WRITE GOOD OBJECTIVES?
(continued)
Individual Exercise: Write three personal objectives that satisfy the three criteria.
Team Exercise: Write three organizational objectives that satisfy the three criteria.
![Page 20: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/20.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-20
WHY OBJECTIVES ARE IMPORTANT
1.They serve as targets.
2.They provide handy measuring sticks.
3.They generate individual commitment to collective results.
4.Challenging objectives motivate employees.
![Page 21: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/21.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-21
Figure 6.3 A Typical Means-Ends Chain of Objectives
![Page 22: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/22.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-22
PRIORITIES
Priorities: Ranking goals, objectives, or activities in order of importance.
A priorities: “Must do” objectives critical to successful performance.
B priorities: “Should do” objectives necessary for improved performance.
C priorities: “Nice to do” objectives desirable for improved performance.
![Page 23: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/23.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-23
PRIORITIES (continued)
Exercise: Make a personal “To Do” list for the next week. Next, assign each item on your list an A, B, or C priority rating.
![Page 24: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/24.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-24
THE MBO CYCLE
Step 1: Setting objectives
Step 2: Developing action plans
Step 3: Periodic review
Step 4: Performance appraisal
![Page 25: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/25.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-25
Figure 6.5 MBO’s Strengths and Limitations
![Page 26: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/26.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-26
PROJECT PLANNING
Stages in the Project Life Cycle: Conceptualization Planning Execution Termination
![Page 27: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/27.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-27
Source: Adapted in part from Figure 1.2 and discussion in Jeffrey K. Pinto and O.P. Kharbanda, Successful Project Managers: Leading Your Team to Success (New York: Van Nostrand Reinhold, 1995), pp. 17-21.
Figure 6.6 The Project Life Cycle and Project Planning Activities
![Page 28: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/28.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-28
PROJECT PLANNING AND CONTROL
Project Planning Activities:
Conceptualization stage: Develop overall project goals,
budget, and schedule
![Page 29: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/29.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-29
PROJECT PLANNING AND CONTROL (continued)
Planning Stage: Acquire needed facilities and
equipment Acquire needed personnel and assign
duties (goal setting) Schedule and coordinate individual
and team efforts
![Page 30: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/30.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-30
PROJECT PLANNING AND CONTROL (continued)
Termination stage: Turn project over to client Identify new project opportunities
![Page 31: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/31.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-31
PROJECT PLANNING AND CONTROL (continued)
Project Control Activities: Monitor progress and take corrective action.
Project Success Criteria:
1. Satisfy client’s expectations
2. Complete project on time and under budget
![Page 32: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/32.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-32
Figure 6.4 The Basic Planning/Control Cycle
![Page 33: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/33.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-33
PROJECT PLANNING GUIDELINES
Projects are schedule-driven and results-oriented
The big picture and the little details are of equal importance
Project planning is a necessity, not a luxury
Project managers know the motivational power of a deadline
![Page 34: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/34.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-34
Figure 6.7 A Sample Flow Chart
![Page 35: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/35.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-35
Figure 6.8 A Sample Gantt Chart
![Page 36: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/36.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-36
Figure 6.9 A Sample PERT Network
![Page 37: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/37.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-37
BREAK-EVEN ANALYSIS(continued)
The Algebraic Method:
Relying on the following labels,
FC = total fixed costs
P = price (per unit)
VC = variable costs (per unit)
BEP = break-even point
![Page 38: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/38.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-38
BREAK-EVEN ANALYSIS
Break-even point: level of sales at which there is no loss or profit.
Fixed costs: contractual costs that must be paid regardless of output or sales (e.g., rent, utilities, insurance).
Variable costs: costs that vary directly with production and sales (e.g., labor, material, supplies).
![Page 39: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/39.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-39
BREAK-EVEN ANALYSIS(continued)
The formula for calculating break-even point (in units) is:
BEP (in units) = FC
P - VC
![Page 40: Copyright © Houghton Mifflin Company. All rights reserved. 6-1 Chapter 6 The Basics of Planning and Project Planning](https://reader035.vdocuments.net/reader035/viewer/2022062407/56649e175503460f94b02779/html5/thumbnails/40.jpg)
Copyright © Houghton Mifflin Company. All rights reserved.
6-40
Figure 6.10 Graphic Break-Even Analysis