Unit 05

FOUNDATION OF
PLANNING

Ngô Quý Nhâm, MBA

Đại học Ngoại Thương
Email: quynham@gmail.com

NGO QUY NHAM, MBA

Lecture outline

) planning and the purposes of planning

) Types of goals and plans
) The principles of planning
) The nature of organisational goals
) Management by objectives

NGO QUY NHAM, MBA

1
What is planning?

) Planning is the process that involves

defining the organization’s goals,
establishing an overall strategy for
achieving those goals, and developing a
comprehensive set of plans to integrate
and coordinate organizational work.
) Planning can be formal or informal

NGO QUY NHAM, MBA

Purposes of planning

) Provides direction to managers and non-

managers so that they can coordinate
activities and cooperate with each other.
) Planning reduces the impact of change
(uncertainty)
) Minimize waste and redundancy
) Set the standards used in controlling

NGO QUY NHAM, MBA

2
 Corporate Planning process

2 3
Analysing Identifying
external Opportunities
environment and
1 Threats
6
Establishing Developing
a mission strategic
and goals options
4 5

Identifying
Analysing
Strengths
internal
and
environment
Weakness

NGO QUY NHAM, MBA

The role of goals and plans in planning

) Goals
Desired outcomes for individuals, group or
entire organizations
) Plans
…documents that outline how goals are going to
be met, including resource allocations,
schedules, and other necessary actions to
accomplish the goals.
Means devised for attempting to reach a goal.

NGO QUY NHAM, MBA

3
Types of goals

) Stated goals
Official statements of what an organization
says and what it wants its various stakeholders
to believe its goals are.
There may be conflict in stated goals
) Real goals
Goals that an organization actually pursues, as
defined by the action of its members.
) Hierarchy of goals
A system of goals

NGO QUY NHAM, MBA

Types of plans

Breath Time Specificity Frequency

frame of use
Strategic Long-term Directional Single-use

Operational Short-term Specific Standing

NGO QUY NHAM, MBA

4
Levels of Goals and plans

Top
management

Strategic Strategic
goals plans

Middle
Tactical Tactical management
goals plans

First-line
Operational Operational management
goals plans

NGO QUY NHAM, MBA

Nature of organisational goals

) Benefits of goals
ƒ Increases performance
ƒ Clarifies expectations
ƒ Facilitates control
ƒ Increases motivation

NGO QUY NHAM, MBA

5
Characteristics of well-designed goals

Content should be SMART

) Specific
) Measurable
) Attainable/Challenging
) Relevant
) Time limited

NGO QUY NHAM, MBA

Goals & possible problems

Possible problems with goals:

) Excessive risk taking
) Increased stress
) Undermined self-confidence
) Ignored non-goal areas
) Excessive short-run thinking
) Dishonesty & cheating

NGO QUY NHAM, MBA

6
Possible obstacles to planning

Environmental change

Manager hostility

Pressure of day-to-day work

Low levels of manager skill & knowledge

Domination by specialists

NGO QUY NHAM, MBA

Management by objectives

MBO: management system in which

specific performance goals are jointly
determined by employees and their
managers, progress toward
accomplishing those goals is periodically
reviewed, and rewards are allocated on
the basis of this progress.

NGO QUY NHAM, MBA

7
Steps in the MBO Process
1. Develop the organisation’s goals and strategies
2. Establish specific goals for departments
3. Dept managers jointly set specific objectives for
their dept with their managers
4. Specific objectives are jointly set with all dept
members
5. Action plans are formulated and agreed upon by
managers and employees
6. Implement the action plans
7. Review progress periodically
8. Appraise performance

NGO QUY NHAM, MBA

Management by objectives

Strengths: Weaknesses:
) Helps link goals & ) Needs strong, enduring
plans commitment
) Clarifies priorities, ) Too much paper work
expectations ) Requires training of
) Fosters organisational managers
communication ) May be misused
) Builds member (i.e. for punishment)
motivation
) Risk of dominance of
quantitative goals

NGO QUY NHAM, MBA

8
Management by objectives

MBO assessed:
) Can heighten organisational performance
) Short-term focus of US, Australian & NZ
organisations limits application
) 20–25% success rate

NGO QUY NHAM, MBA