Mosley 9e ppt_ch02

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CHAPTER 2

FUNDAMENTALS OF PLANNING


• Discuss some of the more important points about planning

• Explain the steps involved in planning• Explain how planning differs at top, middle, and

supervisory management levels• Explain how the hierarchy of objectives works

LEARNING OBJECTIVES

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• Discuss some important guidelines in setting objectives

• Differentiate the various kinds of standing and single-use plans

• Apply scheduling techniques

LEARNING OBJECTIVES

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• Routine and detailed• Scheduling work• Developing and living within budgets• Making job assignments

• Plan for major events that happen infrequently

SUPERVISORY PLANNING

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EXHIBIT 2.1 - THE THREE PLANNING STEPS

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STEPS TO ACHIEVE THE OBJECTIVE OR GOAL

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STEPS IN CONTROLLING

Setting performance goals, or norms

Measuring performance

Comparing performance with goals

Analyzing results

Taking corrective action as needed

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EXHIBIT 2.2 - THE NONPLANNER’S CYCLE

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• Having anticipated solutions in advance for problems or changes that may arise

• Separates effective managers from ineffective ones

• Responds to the what if questions that describe serious events

CONTINGENCY PLANNING

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• Anticipating alternative future situations and developing courses of action for each alternative

• Variation of contingency planning• Has a long-term focus• Associated with planning at upper levels within

organizations• Necessary tool for managers today

SCENARIO PLANNING

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• Has longer time horizons• Affects the entire organization• Deals with the organization’s interaction with

its external environment

STRATEGIC PLANNING

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• Mission: Defines the purpose the organization serves • Identifies the organization’s services, products,

and customers• Objectives: Purposes, goals, and desired results

for the organization and its parts• Strategies: Activities by which the organization

adapts to its environment to achieve its objectives

ELEMENTS OF STRATEGIC PLANS

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• Consists of intermediate- and short-term planning

• Facilitates the achievement of the long-term strategic plans

OPERATIONAL PLANNING

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• Goals that provide the desired purposes and results for an organization and its parts

• Serve as a stimulus for motivation and effort• Guides lower level managers to:

• Develop their own operational plans • Coordinate their own activities

• Hierarchy of objectives: Network with:• Broad goals at the top level of the organization • Narrower goals for individual divisions,

departments, or employees

OBJECTIVES

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HIERARCHY OF OBJECTIVES FOR COMPUTRONIX

Organizational Level

Manager Objective

Corporation CEO • Increase profitability• Broaden market share

Division General Manager • Produce 50,000 units• Reduce production costs by

5%*

Department Maintenance DepartmentHead

• Complete cross-training of five technicians by year-end

Work Unit Preventive MaintenanceWork Unit Supervisor

• Improve turnaround time in servicing equipment by 15%*

Individual Worker Maintenance Mechanic • Attend 15 hours of advanced maintenance training*

*Objectives directly linked to improved cost effectiveness.

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• Coordinating departments to ensure harmony• Important among departments or work units

where coordination is required • Lack of unified planning costs an organizations

its objectives

UNIFIED PLANNING

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• Should be:• Set in selected, key performance areas• Specific• Challenging• Stated in measurable terms

• Objective areas should be balanced• Employees should be involved in setting

objectives• Supervisors should follow up on the results

GUIDELINES FOR SETTING OBJECTIVES

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• Used repeatedly over a period of time• Types

• Policy• Rule• Procedure

STANDING PLANS OR REPEAT-USE PLANS

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• Provides consistency among decision makers• Acts as a boundary on a supervisor’s freedom

of action• Role of supervisors in policy setting

• Implement organizational policies established by higher management

• Create policies within their departments as guides for their own work groups

• Management must reexamine the appropriateness of its policies from time to time

POLICY

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• Policy that is invariably enforced• Inflexible requirements that are much stronger

than guidelines• Supervisors should know when they:

• Can be flexible in promoting the objectives • Have to enforce rules

• Overuse can lead to problems

RULE

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• Steps to be performed when a particular course of action is taken

• Used when there is a requirement of a high degree of consistency in frequent activities

PROCEDURE

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• Developed to accomplish a specific purpose • Discarded after use• Types

• Program• Project• Budget• Schedule

SINGLE-USE PLANS

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• Program: Large-scale plan composed of a mix of objectives, policies, rules, and projects• Outlines:

• Specific steps to be taken to achieve its objectives • Time, money, and human resources required to

complete it

• Project: Distinct part of a program• Has its own objectives • Becomes the responsibility of personnel

assigned to oversee it

PROGRAM AND PROJECT

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• Budget: Forecast of expected financial performance over time• Serves as a planning and a controlling tool

• Schedule: Plan of activities to be performed and their timing• Approaches

• Gantt chart • Critical path method

BUDGET AND SCHEDULE

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EXHIBIT 2.6 - EXAMPLE OF GANTT CHART SHOWING ACTIVITIES NEEDED IN PRODUCTION START-UP

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• Identifies the activities needed to complete a task or project

• Specifies the time each activity will take • Shows the relationships among the activities

• To determine the total completion time of the task or project

• Used on highly complex, one-time projects• Critical path: Series of activities that comprise

the longest route to complete the job• In terms of time

CRITICAL PATH METHOD

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EXHIBIT 2.7 - CRITICAL PATH FOR COMPLETING MACHINE OVERHAUL

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• Budget• Contingency planning• Critical path• Critical path method• Gantt chart• Hierarchy of objectives• Mission• Objectives• Operational planning• Policy• Procedure

• Program• Project• Rule• Scenario planning• Schedule• Single-use plans• Standing plans or repeat-use

plans• Strategic planning• Strategies• Unified planning

IMPORTANT TERMS

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Mosley 9e ppt_ch02

Education