Management a practical introduction 3rd kinicky chapter 05

Management
A Practical Introduction
Third Edition
Angelo Kinicki &
Brian K. Williams

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


Chapter 5: Planning

The Foundation of Successful
Management
Planning & Uncertainty
Fundamentals of Planning
The Planning/Control Cycle
Management by Objectives
Project Planning

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


5.1 Planning & Uncertainty
HOW CAN PLANNING HELP MANAGERS DEAL
WITH UNCERTAINTY?
 Planning: defined as
setting goals and
deciding how to achieve
them
 Another definition:
Planning is coping with

uncertainty by
formulating future
courses of action to
achieve specified results.
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


5.1 Planning & Uncertainty
HOW CAN PLANNING HELP MANAGERS DEAL
WITH UNCERTAINTY?
Planning is used together with strategic management
and evolves from the company’s mission and vision
Planning covers strategic planning (done by top
managers, tactical planning (done by middle managers),
and operational planning (done by first-line managers)

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


5.1 Planning & Uncertainty

Figure 5.1: Planning and Strategic Management

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


5.1 Planning & Uncertainty
WHY NOT PLAN?
Managers need to be cautious when planning for
two reasons:

1. Planning requires managers to set aside their
regular responsibilities to develop plans
2. Managers need to be flexible enough to react
to new events because there may not always be
enough time to plan
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


5.1 Planning & Uncertainty
HOW DOES PLANNING HELP?
There are four main benefits of planning:
1. Organizations can use plans to check their
progress toward their goals
2. Plans define the responsibilities of a firm’s
departments and coordinates their activities
3. Planning requires managers to consider what
may happen in the future
4. Planning for unpleasant contingencies helps
managers deal with uncertainty
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


Why not plan?





Planning requires you to set
aside time to do it



Most managers are time-starved



Hard to set aside time to plan

You may have to make some
decisions without a lot of time
to plan


Even in today’s computer age, you
may not have time to plan a
decision



Plan need not be perfect to be
executable

McGraw-Hill/Irwin

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.

The Benefits of Planning

1)

Planning helps you check on your progress

2)

Planning helps you coordinate activities

3)

Planning helps you think ahead

4)

Above all, planning helps you cope with uncertainty

McGraw-Hill/Irwin

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.


5.1 Planning & Uncertainty
There are three types of uncertainty:

1. State Uncertainty
2. Effect Uncertainty
3. Response Uncertainty

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


Three Types of Uncertainty

“What possible harmful event could occur?”
 State Uncertainty: when the environment
is considered unpredictable.
 Example: the uncertainty regarding the
weather

McGraw-Hill/Irwin

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.


Three Types of Uncertainty

“What possible harmful impact might an
environmental change have?”
 Effect Uncertainty: when the effects of
environmental changes are unpredictable.

 Example: losing the trail in a snowstorm and
risking hypothermia.

McGraw-Hill/Irwin

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.


Three Types of Uncertainty

“What possible harmful consequence
might a decision have?”
 Response Uncertainty: when the
consequences of a decision are uncertain.
 Example: you might have a cell phone in a
snowstorm, but someone has to receive
the call.

McGraw-Hill/Irwin

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.

Chapter 5: Planning
CLASSROOM PERFORMANCE SYSTEM
A firm that is analyzing what possible harmful
event could occur is looking at
A) response uncertainty
B) effect uncertainty
C) defense uncertainty
D) state uncertainty
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


Chapter 5: Planning
CLASSROOM PERFORMANCE SYSTEM
A firm that is analyzing what possible harmful
event could occur is looking at
A) response uncertainty
B) effect uncertainty
C) defense uncertainty
D) state uncertainty
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


5.1 Planning & Uncertainty
Raymond E. Miles and Charles C. Snow
suggested that firms will adopt one of four
strategies to respond to uncertainty:
1. Defenders
2. Prospectors
3. Analyzers

4. Reactors

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


Responding to Uncertainty
 Defenders: are expert
at producing and
selling narrowly
defined products and
services.
 Prospectors: focus
on developing new
markets or services
and in seeking out new
markets rather than
waiting for things to
happen.
McGraw-Hill/Irwin

 Analyzers: let the other
organizations take the risks
of product development and
marketing and then imitate
what seems to work best.

 Reactors: make
adjustments only when
finally forced to by
environmental

pressures.

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.


5.1 Planning & Uncertainty
Miles and Snow also argued that firms
continuously make decisions about three kinds
of business problems:
1. entrepreneurial - selecting and making
adjustments of products and markets
2. engineering - producing and delivering the
products
3. administrative - establishing roles,
relationships, and organizational processes
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


5.2 Fundamentals Of Planning
WHAT IS INVOLVED WITH PLANNING?
Planning translates an organization’s mission
(purpose or reason for being) into objectives
The mission statement answers the question
“what is our reason for being?”
The vision statement answers the questions
“what do we want to become where do we want

to go strategically?”
Planning begins with the mission statement

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


Mission Statement

 Outline of the fundamental purposes of the
organization
 Should address:
 Organization’s self-concept
 Company philosophy and goals
 Long-term survival
 Customer needs
 Social responsibility
 Nature of company’s product or service
McGraw-Hill/Irwin

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.


The World Bank’s Mission

1)

In the last chapter, we learned about the World Bank.

2)

Go to

3)

Explore the “about us” section

4)

What is the World Bank’s mission?

5)

Does this mission statement meet the criterion laid
out in this chapter?

McGraw-Hill/Irwin

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.


5.2 Fundamentals Of Planning
Figure 5.2: Making Plans

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


5.2 Fundamentals Of Planning
Having clearly defined mission and vision
statements allows three things to happen:
1. strategic planning by top management where
long-term goals are determined and available
resources are identified
2. tactical planning by middle management where
contributions their departments or similar work
units can make are determined
3. operational planning by first-line managers
where how specific tasks will be accomplished
using available resources is determined
Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin


Types of Planning

 Strategic planning: top managers
decide what the organization’s longterm goals should be for the next 15 years with the resources they
expect to have available.
 Tactical planning: middle managers
decide what contributions their
departments or similar work units
can make with their given resources
during the next 6-24 months.
 Operational planning: first-line

managers determine how to
accomplish specific tasks with
available resources within the next
1-52 weeks.
McGraw-Hill/Irwin

Kinicki/Williams, Management: A Practical Introduction
3eMcGraw-Hill
©2008, McGraw-Hill/Irwin
© 2006 The
Companies, Inc. All rights reserved.


5.2 Fundamentals Of Planning
Figure 5.3: Three Levels of Management, Three
Types of Planning

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin