Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
119
Chapter 8
Planning Work Activities
In this chapter, we begin our study of the first of the management functions: planning.
Planning is important because it establishes what an organization is doing. We’ll look at
how managers set goals as well as how they establish plans. Focus on the following
learning objectives as you read and study this chapter.
LEARNING OBJECTIVES
1. Define the nature and purposes of planning.
2. Classify the types of goals organizations might have and the plans they use.
3. Compare and contrast approaches to goal-setting and planning.
4. Discuss contemporary issues in planning.
It’s Your Career
You Gotta Have Goals
It’s been said that if you don’t know where you’re going, any road will get you there. It
has also been said that the shortest distance between two points is a straight line. These
two sayings emphasize the importance of goals. Organizations want people who can
get things done. And goal-setting is an essential component of long-term career
success. How can you be better at setting goals? Here are some suggestions:
1. Identify what you’d like to do or achieve in important life areas such as career,
2. Make your goals actionable. Although having broad, visionary goals is important,
you need to set smaller goals with more specific, achievable actions. Use the
4. Determine how you’ll measure progress toward your goal. You need to think
about how you will know you’ve achieved a goal.
5. Review your goals periodically. As your life and career circumstances change,
change your goals to reflect that.
120
8.1 THE WHAT AND WHY OF PLANNING
A. 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.
B. Why Do Managers Plan? Planning serves a number of significant
2. Planning reduces uncertainty.
4. Planning establishes goals or standards used in controlling.
1. Effective planning and implementation play a greater part in high
performance than does the amount of planning done.
8.2 GOALS AND PLANS
Planning is often called the primary management function because it establishes
1. Goals (often called objectives) are desired outcomes for
individuals, groups, or entire organizations.
2. Types of goals
1) Stated goals are official statements of what an
2) Real goals are those that an organization actually
2. Plans can be described by their breadth, time frame, specificity,
and frequency of use (see Exhibit 8-1).
a. Breadth: Strategic versus operational plans. Strategic
plans (long-term plans) are plans that apply to the entire
organization, establish the organization’s overall goals,
and seek to position the organization in terms of its
environment. Operational plans (short-term plans) are
plans that specify the details of how the overall goals are
to be achieved.
b. Time frame: Short-term versus long-term plans. Short-
term plans are plans that cover one year or less. Long-
term plans are plans with a time frame beyond three
d. Frequency of use: Single-use versus standing plans. A
single-use plan is a one-time plan specifically designed to
meet the needs of a unique situation. Standing plans are
ongoing plans that provide guidance for activities
performed repeatedly.
LEADER MAKING A DIFFERENCE
One of the truly successful businesses coming out of the Dot.com revolution is
Amazon.com. Led by charismatic founder Jeff Bezos, Amazon has grown beyond an
online bookstore to become a leader in Internet retailing. Not satisfied selling just books,
Bezos used his drive, energy, and enthusiasm to move the company into other areas,
such as LEGOs, power drills, and Jackalope Buck taxidermy mounts, to name a few of
the thousands of products you can buy.
What can you learn from this leader making a difference?
8.3 SETTING GOALS AND DEVELOPING PLANS
1. Traditional goal-setting is an approach to setting goals in which
goals are set at the top level of the organization and then broken
into subgoals for each level of the organization.
a. Traditional goal-setting assumes that top managers know
what is best because of their ability to see the “big picture.”
integrated network of goals in which the accomplishment of
goals at one level serves as the means for achieving the
increase employee performance and organizational
productivity. However, top management commitment and
involvement are important contributions to the success of
an MBO program.
2. Characteristics of Well-Written Goals (see Exhibit 8-4):
1 Written in terms of outcomes
3. Clear as to a time frame
5. Written down
3. Steps in Goals-Setting
2. Evaluate available resources.
4. Write down the goals and communicate them to all who
need to know.
5. Review results and whether goals are being met. Make
changes as needed.
1. Contingency Factors in Planning:
a. Manager’s level in the organization (see Exhibit 8-5).
Operational planning usually dominates the planning
1. When uncertainty is high, plans should be specific,
but flexible.
2. Managers must be prepared to rework and amend
1. According to the commitment concept, plans
123
2. Planning for too long or for too short a time period
1. In the traditional approach, planning was done entirely by top-level
2. Another approach to planning is to involve more members of the
organization in the planning process. In this approach, plans are
not handed down from one level to the next but are developed by
organizational members at various levels to meet their specific
needs.
FUTURE VISION: Using Social Media for Environmental Scanning
The use of social media has become a routine part of marketing for many companies.
Now, some companies are turning to social media as an environmental scanning tool.
Companies can use software tools and analytic techniques to learn about competitors,
suppliers, and customers from social media sites like LinkedIn and Twitter.
It is important to use a strategic approach to the process to avoid becoming overwhelmed
and to have the flexibility to respond quickly to trends or other intelligence that is revealed
in the social media sites.
The following discussion questions are posed:
Talk About It 1: With so much information available through social media, how can
businesses focus their efforts to scan for relevant information?
Talk About It 2: How can a business determine if information gathered from social media
is reliable?
8.4 CONTEMPORARY ISSUES IN PLANNING
The concluding section of Chapter 8 examines how managers can plan
effectively in dynamic environments as well as addressing the concept of
environmental scanning.
A. How Can Managers Plan Effectively in Dynamic Environments?
1. The external environment is continually changing. Dynamic
environments are more the norm than the exception.
2. Managers should develop plans that are specific, but flexible.
Planning is an ongoing process and maintaining flexibility is
important. Even though the environment is highly uncertain, it’s
critical to continue formal planning. Persistence in planning
contributes to significant performance improvement. In addition, a
flatter hierarchy allows lower organizational levels to set goals and
develop plans.
124
B. How Can Managers Use Environmental Scanning?
1. A manager’s analysis of the external environment may be
improved by environmental scanning, which involves screening
2. Competitive intelligence is not corporate espionage – much
4. Managers should ensure that information gathering is legal and
1. Business intelligence refers to a variety of data that managers
can use to make more effective strategic decisions. Company
2. To make sense of vast amounts of data managers use digital
tools, technology, systems, or software that allow the user to
collect, visualize, understand, or analyze data.
3. Using digital tools managers make decisions based on both
quantitative information (also referred to as big data) and
4. Three more prevalent digital tools available today are:
a. Data Visualization Tools. Pie charts, bar charts, and trend lines
can all be used to organize and summarize data for visual display.
5. Digital tools should be seen as a complement to current planning
approaches rather than a replacement for them.
ANSWERS TO REVIEW AND DISCUSSION QUESTIONS
8-1. Explain what studies have shown about the relationship between planning and
performance.
Copyright © 2018 Pearson Education, Inc.
125
It should be noted that one cannot say that organizations that formally plan always
outperform those that don’t plan. However, studies have indicated that formal planning
is often associated with positive financial results. Generally, performance is also higher
in those organizations where planning is present. And, when higher performance is not
the result of formal planning, often the reason is due to something in the external
environment. Finally, studies indicate that at least four years of formal planning are
necessary before performance is affected. (LO: 1, Define the nature and purposes of
planning, AACSB: Analytical thinking)
8-2. Discuss the contingency factors that affect planning.
The first contingency factor is a manager’s level in the organization. Typically, lower-
8-3. Will planning become more or less important to managers in the future? Why?
8-4. If planning is so crucial, why do some managers choose not to do it? What would
you tell these managers?
8-5. Explain how planning involves decisions today that will have an impact later.
As managers plan, they make decisions that influence how activities are organized, how
8-6. How might planning in a not-for-profit organization such as the American Cancer
Society differ from planning in a for-profit organization such as Coca-Cola?
Copyright © 2018 Pearson Education, Inc.
126
to raise funds and to recruit volunteers to achieve its mission. (LO: 4, Discuss
contemporary issues in planning, AACSB: Analytical thinking)
8-7. What types of planning do you do in your personal life? Describe these plans in
8-8. Provide an example of how a digital tool could help an organization analyze data to
support decision making.
Responses to this question will vary, but students should demonstrate knowledge of the
more prevalent digital tools available and how they can be used. (LO: 4, Discuss
contemporary issues in planning, AACSB: Analytical thinking)
PERSONAL INVENTORY ASSESSMENTS
ETHICS DILEMMA
Students are asked to assess an event that happened at a pharmacy. The case
revolves around an individual who had been diagnosed with a serious vision issue that
would ultimately result in blindness if it wasn’t treated. The drugs required to treat the
8-11. What do you think? Was this a good business decision for the pharmacies?
8-12. What potential ethical issues do you see here?
8-13. If you were the store manager, what would you have done in this situation?
Copyright © 2018 Pearson Education, Inc.
127
SKILLS EXERCISE: Making a To-Do List That Works and Using It
Students are provided with eight suggestions for effectively creating to-do lists. They are
then asked to create a to-do list for an upcoming project using the suggestions. (LO: 3,
Compare and contrast approaches to goal-setting and planning, AACSB: Reflective
thinking)
WORKING TOGETHER: TEAM EXERCISE
In groups of three to four individuals, students tackle planning and goal-setting for
something they would like to accomplish in the future. Students should refer to Exhibit
8-4 when creating their goals in writing. Goals associated with the plans should be
specific, achievable, and measurable. (LO: 3, Compare and contrast approaches to
goal- setting and planning, AACSB: Analytical thinking)
MY TURN TO BE A MANAGER
• Practice setting goals for various aspects of your personal life, such as
academics, career preparation, family, hobbies, and so forth. Set at least two
short-term goals and at least two long-term goals for each area. (LO: 3, Compare
and contrast approaches to goal-setting and planning, AACSB: Reflective
thinking)
• Write a personal mission statement. Although this may sound simple to do, it’s
not going to be simple or easy. Our hope is that it will be something that you’ll
want to keep, use, and revise when necessary...that it will be something that
helps you be the you you’d like to be and helps you live the life you’d like to live.
Start by doing some research on personal mission statements. There are some
wonderful Web resources that can guide you. Good luck! (LO: 3, Compare and
contrast approaches to goal-setting and planning, AACSB: Reflective thinking)
• Choose two companies, preferably in different industries. Research the
companies’ Web sites and find examples of goals that they have stated. (Hint: A
company’s annual report is often a good place to start.) Evaluate these goals.
Are they well-written? Rewrite those that don’t exhibit the characteristics of well-
• Effective managers are always screening information to look for emerging trends
that might affect their industries. Start looking for trends in an industry you are
interested in by subscribing to a variety of social media sources that are related
to the industry. (LO: 4, Discuss contemporary issues in planning, AACSB:
Analytical thinking)
ANSWERS TO CASE APPLICATION 1
QUESTIONS
Planning for Holiday Shipping at FedEx
8-14. How can the planning process help FedEx meet the company’s goal of meeting
on-time delivery promises?
8-15. FedEx noted that inclement weather and last-minute online sales surges impacted
the company’s ability to deliver packages by Christmas. How could planning help
overcome unexpected challenges such as these in the future?
8-16. Would it be valuable for FedEx to gather competitor intelligence? Why or why not?
8-17. What other trends could affect the shipping industry in the future?
Copyright © 2018 Pearson Education, Inc.
129
ANSWERS TO CASE APPLICATION 2
QUESTIONS
Student answers to these questions will vary.
Shifting Direction
8-18. What role do you think goals would play in planning the change in direction for the
company? List some goals you think might be important. (Make sure these goals have
8-19. What types of plans would be needed in an industry such as this one? (For
instance, long-term or short-term, or both?) Explain why you think these plans would be
8-20. What contingency factors might affect the planning Garmin executives have to do?
How might those contingency factors affect the planning?
8-21. What planning challenges do you think Garmin executives face with continuing to
be the global market leader? How should they cope with those challenges?
130
