3.1 The nature & importance of planning
Managers need to plan to achieve org’s goals
Every org has a purpose/reason for its existence
o Purpose of profit-seeking org = realise an above-average return for its shareholders, &
satisfy the claims of its stakeholders
o Stakeholders incl. = employees, customers, suppliers, the community & the government
organisation’s vision = what or where an organisation would like to be in the future.
o In order to reach that destination,
o an organisation needs to determine the best possible way to reach it,
o and to determine what resources would be needed along the way.
o This is what the management function of planning entails.
= The objective of every plan made by managers in organisations is to facilitate the attainment of a
purpose.
THREE COMPONENTS OF PLANNING
1. Determine organisational vision, mission & goals
2. Identify ways of reaching goals
3. Find resources needed for task within complex environment
3.1.1 Determine the organisational vision, mission & goals:
VISION = a statement of what org wants to become & where it wants to be in the future
o One that every individual in org & stakeholders shares & is excited about
o It is the end, not the means t the end
o Example = university should see their business as cultivating, mindful & soulful graduates
MISSION = Aligns the organisation with its vision in terms of its products and/or services, market and
technology
o Reflect perfect future, dream org has for itself
Advantages of a well-written mission statement:
1. Defines org for key stakeholders in terms of its product/service, market & tech
2. How to accomplish vision
3. Establish key priorities for org (key performance areas)
4. States a common goal & foster togetherness
5. Creates a philosophical anchor for all org activities
6. Generates enthusiasm, buy-in & a “can do” attitude
7. Empowers present & future members of org to believe every member is the key to success
GOALS/OBJECTIVE = Commitment to achieve a measurable result within a given time frame
1
, Criteria for a good objective:
1. Quantitative (measurable)
2. Specific
3. State desired results (focus on key performance areas)
4. Attainable (realistic)
5. Acceptable (goals consistent with people’s preferences & perceptions)
6. State results within given time frame (timeliness)
7. Congruent with one another (attainment of one goal should not preclude attainment of another)
8. Flexible (modified)
PRIORITISING GOALS & OBJECTIVES
= managers rank goals, objectives & activities in order of priority (importance)
Two most widely techniques:
1. The A-B-C priority system = groups objectives in 3 categories according to its priority
A group = “must do” objectives – critical to successful performance
B group = “should-do” objectives – necessary for improved performance
C group = “nice-to-do” objectives – desirable for improved performance
2. 80/20 principle (pareto principle) = a minority of causes, inputs or effort tend to produce the
majority of results, outputs or rewards
3.1.2 Identifying ways to achieve goals:
= Managers identify ways of attaining goals by setting objectives
THE SETTING OF OBJECTIVES
= “means-ends chain”
top-to-bottom process.
Top management sets the broader organisational objectives, which flow down to middle-level
management, and ultimately lower-level management.
ACCOMPLISHMENT OF ORGANISATIONAL GOALS
= “the ends-means chain of objectives” process:
Bottom-up approach
Working from bottom to top, lower management objectives provide the means for achieving
middle-level objectives which, in turn, provide the means for achieving top-level objectives.
2
Managers need to plan to achieve org’s goals
Every org has a purpose/reason for its existence
o Purpose of profit-seeking org = realise an above-average return for its shareholders, &
satisfy the claims of its stakeholders
o Stakeholders incl. = employees, customers, suppliers, the community & the government
organisation’s vision = what or where an organisation would like to be in the future.
o In order to reach that destination,
o an organisation needs to determine the best possible way to reach it,
o and to determine what resources would be needed along the way.
o This is what the management function of planning entails.
= The objective of every plan made by managers in organisations is to facilitate the attainment of a
purpose.
THREE COMPONENTS OF PLANNING
1. Determine organisational vision, mission & goals
2. Identify ways of reaching goals
3. Find resources needed for task within complex environment
3.1.1 Determine the organisational vision, mission & goals:
VISION = a statement of what org wants to become & where it wants to be in the future
o One that every individual in org & stakeholders shares & is excited about
o It is the end, not the means t the end
o Example = university should see their business as cultivating, mindful & soulful graduates
MISSION = Aligns the organisation with its vision in terms of its products and/or services, market and
technology
o Reflect perfect future, dream org has for itself
Advantages of a well-written mission statement:
1. Defines org for key stakeholders in terms of its product/service, market & tech
2. How to accomplish vision
3. Establish key priorities for org (key performance areas)
4. States a common goal & foster togetherness
5. Creates a philosophical anchor for all org activities
6. Generates enthusiasm, buy-in & a “can do” attitude
7. Empowers present & future members of org to believe every member is the key to success
GOALS/OBJECTIVE = Commitment to achieve a measurable result within a given time frame
1
, Criteria for a good objective:
1. Quantitative (measurable)
2. Specific
3. State desired results (focus on key performance areas)
4. Attainable (realistic)
5. Acceptable (goals consistent with people’s preferences & perceptions)
6. State results within given time frame (timeliness)
7. Congruent with one another (attainment of one goal should not preclude attainment of another)
8. Flexible (modified)
PRIORITISING GOALS & OBJECTIVES
= managers rank goals, objectives & activities in order of priority (importance)
Two most widely techniques:
1. The A-B-C priority system = groups objectives in 3 categories according to its priority
A group = “must do” objectives – critical to successful performance
B group = “should-do” objectives – necessary for improved performance
C group = “nice-to-do” objectives – desirable for improved performance
2. 80/20 principle (pareto principle) = a minority of causes, inputs or effort tend to produce the
majority of results, outputs or rewards
3.1.2 Identifying ways to achieve goals:
= Managers identify ways of attaining goals by setting objectives
THE SETTING OF OBJECTIVES
= “means-ends chain”
top-to-bottom process.
Top management sets the broader organisational objectives, which flow down to middle-level
management, and ultimately lower-level management.
ACCOMPLISHMENT OF ORGANISATIONAL GOALS
= “the ends-means chain of objectives” process:
Bottom-up approach
Working from bottom to top, lower management objectives provide the means for achieving
middle-level objectives which, in turn, provide the means for achieving top-level objectives.
2
