Ch07_Summary - CHAPTER SUMMARY CHAPTER 7 What Is Planning...

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CHAPTER SUMMARY – CHAPTER 7 What Is Planning and Why Do Managers Plan? Define planning. Differentiate between formal and informal planning. Describe the purposes of planning. Discuss the conclusions from studies of the relationship between planning and performance. Planning involves defining the organization’s goals, establishing an overall strategy for achieving those goals, and developing plans for organizational work activities. Formal planning has three characteristics: (1) specific goals cover a defined period of years, (2) these goals are written and shared with organizational members, and (3) specific action plans exist for achieving these goals. Informal planning is general and lacks continuity. Also, nothing is written down and there is little or no sharing of goals. The four purposes of planning include: provides direction, reduces uncertainty, minimizes waste and redundancy, and establishes the goals or standards used in controlling. Conclusions from studies of the planning-performance relationship include the following: for the most part, formal planning is associated with positive financial performance; it’s more important to do a good job of planning and implementing the plans than having more and extensive
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planning done; the external environment is usually the reason why companies don’t achieve high levels of performance even when planning;
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Ch07_Summary - CHAPTER SUMMARY CHAPTER 7 What Is Planning...

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