Chapter 4 - Planning

Question 1

Planning

Answer 1

The process of setting performance objectives & determining how to accomplish them

Question 2

What does planning do

Answer 2

• Sets objectives and how to achieve them
• Increases focus & flexibility
• Increases action orientation
• Increases coordination & control
• Increases time management

Question 3

Planning process steps (5 steps)

Answer 3

1. Define objectives
2. Determine where you stand w/ the objectives
3. Develop premises regarding future conditions - what may happen, consequences
4. Make a plan
5. Implement plan & evaluate results

Question 4

Good planning makes us

Answer 4

Action oriented, priority oriented, advantage oriented, change oriented

Question 5

Complacency trap

Answer 5

Being lulled into inaction by current successes or failures; being passively carried along by the flow of events

Question 6

Hierarchy of objectives

Answer 6

In this, lower level objectives help to accomplish higher level objectives. Links people and subsystems

Question 7

Planning fallacy

Answer 7

Underestimating the time required to complete a task

Question 8

Short range plans

Answer 8

1 year or less plans

Question 9

Long range plans

Answer 9

Usually covers 3 years ahead or more; has been becoming shorter and shorter

• Most of us can handle 3 months
• few handle 1 yr
• One in a million can handle 20 yr time frame

Question 10

Strategic plans

Answer 10

Identifies long term directions for the organization.

• Sets broad & comprehensible directions for an organization
• Takes a vision & turns it into reality

Question 11

Vision

Answer 11

Clarifies the purpose of an organization & expresses what it hopes to be in the future

Question 12

Operational plans or Tactical plans

Answer 12

Set out ways to implement a strategic plan. Shorter term, step-by-step to put strategies into action.
- Often take the form of functional plans

Question 13

Functional plans

Answer 13

Identifies how different parts of an enterprise will contribute to accomplishing strategic plans
May include
- Financial, facilities, marketing, human resource and production plans

Question 14

Policy

Answer 14

A standing plan that communicates broad guidelines for decisions & action

Question 15

Procedures

Answer 15

Rules

- Precisely describe actions to take in specific situations

Question 16

Budget

Answer 16

Plan that commits resources to projects or activities

- Theres 5 types of budgets (financial, operating, nonmonetary, fixed, flexible)

Question 17

Financial budget

Answer 17

Cashflows and expenditures

Question 18

Operating budget

Answer 18

Sales/revenue against expenses

Question 19

Non-monetary budget

Answer 19

Allocate resources (equipment, labor, space)

Question 20

Fixed budget

Answer 20

Fixed amount for a specific reason

Question 21

Flexible budget

Answer 21

Vary in proportion with activity

Question 22

Zero based budget

Answer 22

Approaches each budget period as if it were brand new.

• Helps eliminate waste by making sure scarce resources aren’t wasted
• No “rollover” resource allocations w/o new justifications

Question 23

Forecasting

Answer 23

The process of predicting what will happen in the future

- Can rely on human judgement and that can be wrong

Question 24

Qualitative forecasting

Answer 24

Use expert opinions

Question 25

Quantitative forecasting

Answer 25

Use mathematical models & statistics

Question 26

Contingency planning

Answer 26

Identifies alternative courses of action to take when things go wrong. - A good contingency plan will have "trigger points"

Question 27

Scenario planning

Answer 27

Identifies alternative future scenarios & makes plans to deal with each. Long-term version of a contingency plan - Developed at Royal Dutch/Shell

Question 28

Benchmarking

Answer 28

Uses external comparisons to gain insight for planning - Planning technique - Managers search for "best practices" (methods that leas to superior performance) - Way of learning from the success of others

Question 29

Stretch goals

Answer 29

Performance targets that we have to work extra hard and stretch to reach

Question 30

Learning goals

Answer 30

Set targets to acquire the knowledge & skills required for performance

Question 31

Outcome goals

Answer 31

Set targets for actual performance results | - Undesirable effects happen when outcome goals are emphasized at the expense of learning goals

Question 32

Participatory planning

Answer 32

Includes the people who will be affected by plans and or who will be asked to implement them - Increases creativity and info available - Increases understanding and acceptance of plans - Increases commitment