Planning in Marekting, Summaries of Brand Marketing

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Chapter 7

FOUNDATIONS

OF PLANNING

Learning Objectives

You should learn to:

• (^) Define planning
• (^) Explain why managers plan
• (^) Describe what role goals play in planning
• (^) Distinguish among the different types of plans
• (^) Tell how goals are established
• (^) Describe the characteristics of well-designed goals

What Is Planning?

Planning

• (^) involves defining the organization’s goals, establishing an overall strategy, and developing a comprehensive set of plans to integrate and coordinate organizational work
• (^) informal planning - nothing is written down
  • (^) little or no sharing of goals
  • (^) general and lacking in continuity
• (^) formal planning - written
  • (^) defines specific goals
  • (^) specific action programs exist to achieve goals

Why Do Managers Plan?

Purposes of Planning

• (^) planning is the primary management function that

establishes the basis for all other management functions

• (^) planning establishes coordinated effort
• (^) planning reduces uncertainty
• (^) planning reduces overlapping and wasteful activities
• (^) planning establishes goals and standards used in

controlling

How Do Managers Plan?

The Role of Goals and Plans in Planning

• (^) goals - desired outcomes
  • (^) provide direction for all management decisions
  • (^) represent the criteria against which actual work accomplishments can be measured
• (^) plans - outline how goals are going to be met
• (^) Types of Goals
  • (^) all organizations have multiple objectives
  • (^) no single measure can evaluate whether an organization is successful
  • (^) financial goals - relate to financial performance
  • (^) strategic goals - relate to other areas of performance

Stated Objectives From Large US Companies

How Do Managers Plan? (cont.)

The Role of Goals and Plans in Planning (cont.)

• (^) Types of Plans
  • (^) strategic plans - apply to the entire organization
    • establish organization’s overall goals
    • seek to position the organization in terms of its environment
  • (^) operational plans - specify the details of how the overall goals are to be achieved - tend to cover short time periods

Types Of Plans

Breadth Strategic Operational Specificity Directional Specific Frequency of Use Single use Standing Time Frame Long term Short term

Specific Versus Directional Plans

How Do Managers Plan? (cont.)

The Role of Goals and Plans in Planning (cont.)

• (^) Types of Plans (cont.)
  • (^) single-use plans - one-time plans specifically designed to meet the needs of a unique situation
  • (^) standing plans - ongoing plans that provide guidance for activities performed repeatedly - include policies, procedures, and rules

Traditional Objective Setting

Individual Employee’s Objective Top Management’s Objective Department Manager’s Objective Division Manager’s Objective “Increase profits, regardless of the means” “I want to see a significant improvement in this division’s profits” “We need to improve the company’s performance” “Don’t worry about quality: just work fast”

How Do Managers Plan? (cont.)

Establishing Goals (cont.)

• (^) Approaches to Establishing Goals (cont.)
  • (^) management by objectives (MBO) - specific performance goals are jointly determined by employees and their managers - (^) progress toward accomplishing these goals is periodically reviewed - (^) rewards are allocated on the basis of this progress - (^) MBO consists of four elements » (^) goal specificity » (^) participative decision making » (^) explicit time period » (^) performance feedback

How Do Managers Plan? (cont.)

Establishing Goals (cont.)

• (^) Approaches to Establishing Goals (cont.)
  • (^) management by objectives (cont.)
    • (^) increases employee performance and organizational productivity » (^) depends on support of top managers for MBO
    • (^) problems with MBO » (^) can be useless in times of dynamic change » (^) overemphasis on personal rather than organizational goals » (^) may be viewed simply as an annual exercise in paperwork

How Do Managers Plan? (cont.)

Establishing Goals (cont.)

• (^) Characteristics of Well-Designed Goals
  • (^) should be written in terms of outcomes
  • (^) should be measurable and quantifiable
  • (^) should be clear as to a time frame
  • (^) should be challenging but attainable
  • (^) should be written down
  • (^) should be communicated to all organization members who need to know the goals