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Chapter 2
Fundamentals of Planning
After reading and studying this chapter, the student should
be able to:
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.
Discuss some important guidelines in setting
objectives.
Differentiate the various kinds of standing and
single-use plans.
Apply scheduling techniques.
Brief Outline
Some Important Points about
Planning
Basic Steps Involved in Planning
Planning Is Most Closely Related to
Controlling
Many Managers Tend to Neglect
Planning
Contingency Planning Anticipates
Problems
Planning Differs at Different
Management Levels
Importance of Setting Objectives
What Are Objectives?
Objectives Serve as a Stimulus for
Motivation and Effort
Hierarchy of Objectives
Unified Planning through Objectives
Guidelines for Setting Objectives
Types of Plans
Standing Plans
Single-Use Plans
Learning Objectives
SUPERVISORY MANAGEMENT Instructor’s Manual
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
20
Effective Planning: A Nonprofit Perspective
The profile at the beginning of this chapter focuses on Casi Callaway, Director of Mobile Baykeeper
(MBK), an affiliate of Waterkeeper Alliance. During the early days, Casi’s primary goals were to affiliate
with a larger, recognized organization and develop a strong, active board. In addition to WA’s assistance,
Casi recognized the need for a knowledgeable, connected, and active board. Ms. Callaway was a
tenacious and intelligent young woman with quite a bit of energy who adeptly analyzed the situation and
chose to focus on commonalities that could ultimately align environmental and conservative interests
alike. Ms. Callaway played an instrumental role in transforming the organization from a loosely organized
coalition to an operationally sound community stakeholder. Tremendous strides are being made in all key
performance areas.
I. Some Important Points about Planning
• Planning involves selecting future courses of action for your organization and deciding how to
achieve the desired results.
• Supervisors do planning—both routine and detailed—as an ongoing part of their jobs.
A. Basic Steps Involved in Planning
• Planning covers a wide variety of activities, from simple to complex, and from short to long
term. In all cases, however, the three basic planning steps are as follows:
o Setting an objective or goal
o Identifying and assessing present and future conditions affecting the objective
o Developing a systematic approach by which to achieve the objective (the plan)
• Three additional steps must also be taken to achieve effectively the objective or goal established
in step 1, although they are not exactly planning steps. These include the following:
o Implementing the plan (organizing, leading, staffing)
o Monitoring the plan’s implementation (controlling)
o Evaluating the plan’s effectiveness (controlling)
• These last three steps illustrate how closely planning is related to the other managerial
functions, especially controlling.
• The first step in planning—setting an objective or goal—addresses the issue of what one hopes
to achieve.
• The second planning step—identifying and assessing present and future conditions affecting the
objective—recognizes important variables that can influence objectives.
• The third step of planning is developing a systematic approach to achieve the objective.
Preview
Lecture Outline
CHAPTER NOTES Chapter 2
o This third step becomes the plan.
o It addresses such issues as the how, when, who, and where of the plan.
B. Planning Is Most Closely Related to Controlling
• Of the managerial functions, planning is probably most closely related to controlling.
• The steps in controlling are as follows:
o Setting performance goals, or norms
o Measuring performance
o Comparing performance with goals
o Analyzing results
o Taking corrective action as needed
C. Many Managers Tend to Neglect Planning
• Poor planning results in disorganized and uncoordinated activities.
• Many of the short-run crises that confront supervisors could be greatly eased by proper
planning.
D. Contingency Planning Anticipates Problems
• Contingency planning means having anticipated solutions in advance for problems or changes
that may arise and being prepared to deal with them smoothly when they do arise.
• Proper anticipation of a problem may prevent it from happening.
• A variation of contingency planning is scenario planning, which involves anticipating
alternative future situations, and developing courses of action for each alternative.
o Scenario planning has a long-term focus and is typically associated with planning at
upper levels within organizations.
o Scenario planning is a necessary tool for most managers today.
II. Planning Differs at Different Management Levels
• Top managers are more involved in strategic planning, which has longer time horizons, affects the
entire organization, and deals with the organization’s interaction with its external environment.
• Strategic plans include the following:
o The mission, which defines the purpose the organization serves and identifies its services,
products, and customers.
o The overall objectives that drive the organization, such as profitability, customer
satisfaction, employee relationships, environmental protection, or other critically important
ends to be sought.
o Strategies, the activities by which the organization adapts to the important factors that
comprise its external environment, including consumers, customers, suppliers, competitors,
and social, political, economic, and technological conditions.
• Middle- and supervisory level managers are more concerned with operational planning.
SUPERVISORY MANAGEMENT Instructor’s Manual
o Operational planning consists of intermediate- and short-term planning that facilitates
achievement of the long-term strategic plans set at higher levels.
• Although planning at the supervisory level generally is less complex and involves less uncertainty
than planning at higher levels, it is still crucial that such planning be done effectively.
III. Importance of Setting Objectives
• Objectives are crucial to effective planning.
A. What Are Objectives?
• Objectives are the goals that provide the desired purposes and results for an organization and its
parts.
• Management experts disagree on whether there is a difference between an objective and a goal.
o Some say that goals are broad and nonspecific, whereas objectives are narrow and
specific.
o Others reverse the distinction.
o Still others do not distinguish between the two.
o Because the terms goal and objective are often used interchangeably, this book treats
them as synonyms.
B. Objectives Serve as a Stimulus for Motivation and Effort
• Objectives provide a stimulus for effort; they give people something to strive for.
C. Hierarchy of Objectives
• In any organization, objectives are first needed at the top management level.
• Once top management has determined broad objectives or goals, other levels of the
organization, including supervisory management, reflect these in objectives or goals of their
own, thus creating a hierarchy of objectives.
D. Unified Planning Through Objectives
• A major advantage of organizational objectives is that they give managers at lower levels
guidance in developing their own operational plans and coordinating their own activities.
• Ideally, top management’s objectives should give tactical plans at lower levels unity of purpose.
o Unified planning means ensuring that plans at all organizational levels are in harmony,
rather than at cross-purposes, with one another.
• Other types of plans may also be established to aid in unified planning at lower levels.
o These other types of plans—policies, procedures, and rules—are more specific than
objectives and spell out the methods used at lower levels.
E. Guidelines for Setting Objectives
CHAPTER NOTES Chapter 2
• Objectives set out for employees what they must do to make their performance acceptable.
• Because all supervisors should set objectives in their departments, the following guidelines
should prove helpful to managers at all levels:
o Select key performance areas for objectives.
o Be specific, if possible.
o Set challenging objectives.
o Keep objective area in balance.
o Objectives should be measurable.
o Involve employees in setting objectives.
o Follow up.
IV. Types of Plans
• Once objectives have been set to determine what needs to be accomplished, plans can be developed
to outline how the objectives can be attained.
• The plans fall into two categories—standing plans and single-use plans.
A. Standing Plans
• Standing plans, or repeat-use plans, are those that are used repeatedly over a period of time.
• The three most popular types of standing plans are policies, rules, and procedures.
1. Policies
• A policy is a guide to decision making—a sort of boundary on a supervisor’s freedom of
action.
o That is, it is a way to provide consistency among decision makers.
• Supervisory managers fit into the policy picture in two key ways.
o They play an important part in implementing organizational policies that have been
established by higher management.
o They create policies within their departments as guides for their own work groups.
• Policies established by upper-level managers should be put into writing, because they must
be enforced at operating levels by supervisors.
o Also, they often form the basis for legal proceedings against the organization and its
management.
• Some policies may be unwritten, implied, or based on past practices.
• Supervisors must keep in mind that action or even inaction may be thought of as policy by
employees and serve as a guide to their behavior.
• Policies are relatively permanent but should not be set in stone. Circumstances change, and
management must from time to time reexamine the appropriateness of its policies.
2. Rules
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• Like policies, rules provide guidance.
3. Procedures
• The need for procedures arises when an organization or a department requires a high degree
of consistency in activities that occur frequently.
• A procedure outlines the steps to be performed when a particular course of action is taken.
B. Single-Use Plans
• Single-use plans are developed to accomplish a specific purpose and then discarded.
• Unlike policies, rules, and procedures, single-use plans detail courses of action that won’t be
performed on a repetitive basis.
1. Programs
• A program is a large-scale plan that involves a mix of objectives, policies, rules, and
2. Projects
3. Budgets
4. Schedules
• A schedule is a plan showing activities to be performed and their timing.
• Two scheduling approaches with which students should be familiar are the Gantt chart and
critical path method.
CHAPTER NOTES Chapter 2
• The Gantt chart is a visual progress report that identifies work stages or activities on a
vertical axis and scheduled completion dates horizontally.
o While the Gantt chart is helpful as a planning tool, it does not show directly how the
various activities involved in a job depend on one another.
• The critical path method is a management scheduling tool that identifies the activities
needed to complete a task or project, specifies the time each activity will take, and shows the
relationships among the network of activities to determine the total completion time of the
task or project.
o The critical path method is used on highly complex, one-time projects, such as
building a skyscraper or completing the prototype of a new jet aircraft.
o However, its principles are relevant for many supervisors, especially in planning and
scheduling various aspects of their jobs.
o The total time to complete a job is obtained by adding the hours necessary to complete
the series of activities that comprise the longest route, in terms of time, to complete the
job.
▪ This route is called the critical path.
o A major advantage of the critical path method, even for simple problems, is that they
graphically display the dependent parts of a total job.
▪ The supervisor thus has a better grasp of the total job to be completed.
The PowerPoint slides correlated with the Lecture Outline above are available on the Instructors CD-
ROM and on the product support website.
PowerPoint Slide 2-1 Chapter 2 Title
PowerPoint Slide 2-2 Learning Objectives
PowerPoint Slide 2-3 Learning Objectives
PowerPoint Slide 2-4 Supervisory Planning
PowerPoint Slide 2-5 The Three Planning Steps (Text Exhibit 2-1)
PowerPoint Slide 2-6 Steps To Achieve the Objective or Goal
PowerPoint Slide 2-7 Steps in Controlling
PowerPoint Slide 2-8 The Nonplanner’s Cycle (Text Exhibit 2-2)
Visual Resources
CHAPTER NOTES Chapter 2
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
27
• Objectives should be measurable.
• Involve subordinates in setting objectives.
• Follow up on results.
4. What is meant by a hierarchy of objectives? Explain.
5. What is the difference between a policy, a rule, and a procedure?
6. What is a Gantt chart? How does it differ from a critical path method?
7. What is contingency planning? Explain.
8. Distinguish between objectives and strategies.
Skill Builder 2-1
Testing Your Planning Skills
Works with SCANS competencies: Resources and Interpersonal Skill
Solutions to the Skill Builders
SUPERVISORY MANAGEMENT Instructor’s Manual
This is a group exercise extending the example of Marshall Biscuit Division of Lancaster Colony. The
premise is that the manager has been named as the chairperson of the annual blood drive. The groups
must develop objectives and an operating plan for the blood drive.
Instructions:
• Make a list of what you consider the key planning issues that should be identified by the committee
at this initial planning meeting.
At this meeting, some basic goals must be set. How many units should be targeted? What percent
publicize the event?
• Of the items on your list, which two or three do you believe are the most crucial? Why?
• Identify major problems that could prevent accomplishment of your objective. What contingency
planning could be done to avert them or minimize their impact?
Numerous things can and will go wrong. As Murphy’s Law says—“If it can go wrong, it will.”
However, most things can be handled with a little foresight. If you are going to use the company
• To help in your preparation for the planning meeting, identify 6 to 10 steps that you feel will be
needed to achieve a successful blood drive. These steps might be such things as:
a. Determine a date.
Students’ answers will vary.
CHAPTER NOTES Chapter 2
• Compare your responses to questions 1, 2, 3, and 4 with those of other students. To what extent do
they agree with you?
Skill Builder 2-2
Determining Priorities: Put Savings First
Works with SCANS competencies: Resources, Interpersonal Skill, and Information
Students must take a moment to test their personal planning skills with the following personal budgeting
activity.
Instructions:
• For one month, track your personal income and expenses using a pocket-sized notebook and pen or
a personal electronic device. Regardless of how small the purchase price is, be sure to track ALL
• Analyze your monthly habits to determine where your money is going. Do you have money left
• Set a savings goal for yourself; remember to use the goal-setting principles you learned about in
As you become a savvy saver, you can create a more challenging goal.
• Think about alternative ways to achieve your goal. Pick one that will work for you and stick to it!
One suggestion is to visit various financial planning Web sites, such as
Case 2-1
Solutions to the Case
SUPERVISORY MANAGEMENT Instructor’s Manual
Island Shades
1. Analyze Terry’s goal and plan based on the concepts you learned in this chapter. Are there additional
key performance areas that Terry could identify for action? Is her goal realistic?
2. Do you agree with Terry’s view that Island Shades will be successful? Why or why not?
3. Would you recommend any changes or modifications to her goal or plan?
4. Present a summary of your analysis and recommendations to the class.
Students’ answers will vary.