Chapter 5

Foundations
of Planning

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.1
 Learning Outcomes
 Define planning
 Explain the potential benefits of planning
 Identify the potential drawbacks of
planning
 Distinguish between strategic and tactical
plans (continued)

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.2
 Learning Outcomes
(continued)
 State when directional plans are preferred
over specific plans
 Define management by objectives and
identify its common elements
 Outline the steps in the strategic
management process
(continued)

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.3
 Learning Outcomes
(continued)
 Describe the four grand strategies
 Explain SWOT analysis
 Compare how entrepreneurs and
bureaucratic managers approach strategy

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.4
 Planning

Defining the organization’s goals,

establishing an overall strategy,
and developing a hierarchy of
plans to achieve goals
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.5
 Sets Standards to
Provides
Facilitate
Direction
Control

Reasons
for Planning

Minimizes Waste Reduces the

and Redundancy Impact of Change
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.6
 May Create
Rigidity

Can’t Be Done in a
Dynamic Environment
Criticisms of
Can’t Replace Intuition
Formal and Creativity
Planning Focus on Today’s
Competition

Reinforces
Success
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.7
 Does Planning Improve
Performance?

 Financial results

 Environmental concerns

 Quality and implementation

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.8
 How Do Strategic and Tactical
Plans Differ?

Time Frame Scope Objectives

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.9
 The Time Frame of Planning

Short-Term Long-Term
Plans Plans

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.10
 Objectives Clear Specific Plans Low

Flexibility
General Directional Plans High
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.11
 Single-Use
vs. Standing Plans

Unique Ongoing
Situations Operations

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.12
 What Is Management by Objectives?

Organizational
Objectives

Divisional
Objectives

Departmental
Objectives

Individual
Objectives

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.13
 Common Elements of MBO
 Goal specificity
 Participative decision making
 Set time period
 Performance feedback

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.14
 More Difficult Specific Goals
Goals Lead Lead to
To Higher Better Results
Performance
Does MBO
Work?
Support from
Top Participation
Management Is Key
Is Critical
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.15
 Employees Setting Objectives
 Identify key job tasks
 Set specific and challenging goals
 Encourage active participation
 Prioritize goals
 Build in feedback
 Link rewards to goal attainment

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.16
 Problems with MBO
 Efforts directed primarily toward output
 Encourage individual rather than team
efforts
 Goals may discourage efforts for
continuous improvement

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.17
 1
Identify Current The Strategic
Mission, Objectives
& Strategy
Management Process

2 3 Note 6 Reassess
Analyze
Threats and Mission
Environment
Opportunities
7&8
4 5 Note Strategies
Analyze
Weaknesses
Resources
and Strengths 9 Evaluate
Results
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.18
 Starting the
Process

Mission Strategies
Objectives

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.19
 Analyzing the
Environmental
Environment
Scanning

Competitive
Intelligence

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.20
 Strengths

SWOT
Opportunities Threats
Analysis

Weaknesses

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.21
 Identifying Opportunities

Organization’s Opportunities in
Resources the Environment

Organization’s
Opportunities
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.22
 Grand Strategies
 Growth
 Stability
 Retrenchment
 Combination

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.23
 Determining A
Business-Level Strategy

Cost
Differentiation
Leadership

Focus

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.24
 After Strategies Are
Formulated
 Implementation
 Evaluating results

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.25
 Benchmarking

Quality As
ISO 9000 and
A Strategic ISO 14000
Weapon

Six Sigma

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.26
 Entrepreneurship
 Process by which individuals pursue
opportunities, fulfilling need and wants
through innovation, without regard to
the resources they currently control
 Important themes
 Pursuit of opportunities
 Innovation
 Growth

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.27
 Entrepreneurial Process
 Exploring the entrepreneurial context
 Identifying opportunities and possible
competitive advantages
 Starting the venture
 Managing the venture

Robbins et al., Fundamentals of Management, 4th Canadian Edition

©2005 Pearson Education Canada, Inc. FOM 5.28
 Comparison: Entrepreneurs
and Traditional Managers
Traditional Entrepreneur
Manager
Primary motivation Corporate rewards Independence

Time orientation Short-term goals 5-10 year growth of

business
Activity Delegation Direct involvement

Risk tendency Low Moderate

View toward Avoidance Acceptance

mistakes
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.29
 Project Management
 Contemporary planning tool
 Is a process of quality control to ensure
a project’s activities are done on time,
within budget, and according to
specification
 Project is a one-time-only set of
activities that has a definite beginning
and ending point in time
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.30
 Project Management Process
(Exhibit 5-8)
Identify
Define activities and Establish
objectives resources sequences

Compare Determine
project Estimate
with
completion time for
objectives
date activities
Determine
additional resource
requirements
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. FOM 5.31