Foundations of Planning

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After reading this chapter students should be able to:

1. Discuss the nature and purposes of planning.

2. Explain what managers do in the strategic planning process.

3. Compare and contrast approaches to goal setting and planning.

4. Discuss contemporary issues in planning.

|Opening Vignette—Building a Future | |SUMMARY | |Atlanta-based Habitat for Humanity is a nonprofit, ecumenical Christian housing ministry whose mission is to “eliminate poverty and | |homelessness from the world and to make decent shelter a matter of conscience and action.” The organization was founded by Millard and Linda | |Fuller in 1976 in Americus, Georgia. More than 300,000 Habitat houses have been built, sheltering more than 1.5 million people around the | |world. These houses can be found in all 50 states of the United States, the District of Columbia, Guam, Puerto Rico, and more than 90 | |countries around the world. “Thousands of low-income families have found new hope in this form of affordable housing.” And Habitat’s approach | |is simple. Families in need of decent housing apply to local Habitat affiliates. The organization just received $100 million from a donor and | |they have an opportunity to make a deep impact in many lives. Thorough and effective planning will be essential to determine how, when and | |where the funds should be distributed. | |Teaching Notes: | |If you were a Board member, how would you disseminate the monies? | |Who would be the recipients? | WHAT IS PLANNING AND WHY DO MANAGERS HAVE TO PLAN?

1 Introduction

1. It is the primary management function, setting the basis for the other functions.

2. It encompasses defining the organization’s objectives or goals, establishing an overall strategy, and developing a comprehensive hierarchy of plans to integrate and coordinate.

a) It is concerned with ends (what is to be done) and with means (how it is to be done).

3. Planning can be further defined in terms of whether it is informal or formal.

a) In informal planning, very little, if anything, is written down.

b) In formal planning, specific objectives are written down and made available to organization members.

2 Why Should Managers Formally Plan?

4. Managers should engage in planning for at least four reasons.

a) Planning provides direction

b) It reduces the impact of change.

c) Planning minimizes waste and redundancy

d) It sets the standards to facilitate control. (See Exhibit 4-1).

5. Planning establishes coordinated effort.

a) Understanding where the organization is going and what must be contributed to reach the objectives, helps members to coordinate their activities and fosters teamwork.

6. A lack of planning can cause various organizational members or their units to work against one another.

7. Planning reduces uncertainty.

8. It clarifies the consequences of actions.

9. It is precisely what is needed when managing in a chaotic environment.

10. Planning also reduces overlapping and wasteful activities.

11. Finally,...
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