Chapter 7 Foundations of Planning

Chapter 7 Foundations of Planning - Chapter 7 Foundations...

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Chapter 7 Foundations of Planning ANNOTATED OUTLINE 1. INTRODUCTION Planning is one of the four functions of management. Fundamental information about managerial planning is presented in this chapter; the text discusses the nature and purposes of planning, strategies for effective planning, and contemporary planning issues. 2. WHAT IS PLANNING? Planning involves defining the organization’s goals, establishing an overall strategy for achieving these goals, and developing plans for organizational work activities. The term planning as used in this chapter refers to formal planning. 3. WHY DO MANAGERS PLAN? A.Purposes of Planning Planning serves a number of significant purposes. 1. Planning gives direction to managers and nonmanagers of an organization. 2. Planning reduces uncertainty. 3. Planning minimizes waste and uncertainty. 4. Planning establishes goals or standards used in controlling. B. Planning and Performance Although organizations that use formal planning do not always outperform those that do not plan, most studies show positive relationships between planning and performance. 1. Effective planning and implementation play a greater part in high performance than does the amount of planning done. 2. Studies have shown that when formal planning has not led to higher performance, the external environment is often the reason. 4. HOW DO MANAGERS PLAN? A. Planning is often called the primary management function because it establishes the basis for all other functions. Planning involves two important elements: goals and plans. B. The Role of Goals and Plans in Planning
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1. Goals (often called objectives) are desired outcomes for individuals, groups, or entire organizations. 2. Types of goals a. Financial performance versus strategic goals (See Exhibit 7-1 and PowerPoint slide 7-10 ). b. Stated goals versus real goals 1) Stated goals are official statements of what an organization says and what it wants its various stakeholders to believe its goals are. 2) Real goals are those that an organization actually pursues, as defined by the actions of its members. 3.
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Chapter 7 Foundations of Planning - Chapter 7 Foundations...

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