Chapter 8: Foundations of Planning

Question 1

What Is Planning?

Answer 1

Planning - a primary managerial activity and an on-going process that involves:
–Defining the organisation’s goals
–Establishing an overall strategy for achieving those goals
–Developing plans to integrate and coordinate organisational work activities

• It is concerned with both ends (what is to be
done) and means (how it is to be done)

Question 2

Classify the types of goals organisations use

Answer 2

Financial Goals
- related to the expected internal financial performance of the organisation.

Strategic Goals
- related to the performance of the firm relative to factors in its external environment

Question 3

Describe each of the different types of plans organisations use

Answer 3

Strategic Plans
–Establish the organisation’s overall goals
–Seek to position the organisation in terms of its environment
–Cover extended periods of time
– Top managers

Operational Plans
–Specify the details of how the overall goals are to be achieved
–Cover a short time period
– Low level managers

Long-Term Plans
–Time frames extending beyond three years.

Short-Term Plans
–Time frames of one year or less.

Specific Plans
–Plans that are clearly defined and leave no room for interpretation.

Directional Plans
–Flexible plans that set out general guidelines and provide focus, yet allow discretion in implementation.

Single-Use Plan
–A one-time plan specifically designed to meet the need of a unique situation.

Standing Plans
–Ongoing plans that provide guidance for activities performed repeatedly.

Question 4

What are goals and plans?

Answer 4

• Goals (also Objectives)
– Desired outcomes for individuals, groups, or entire
organisations
– Provide direction and performance evaluation criteria

• Plans
– Documents that outline how goals are to be accomplished
– Describe how resources are to be allocated and establish
activity schedules