Planning is a particular kind of decision making, that addresses the specific future that managers desire for their organizations. We listed planning as the first of the four major activities in the management process – planning, organizing, leading and controlling. We might think of planning as the locomotive that drives train of organizing leading and controlling activities. Or we can envision planning as the taproot of a magnificent oak tree, from which grow the branches of organizing, leading and controlling. Planning is that crucial for managers.
Planning is not a single event, with a clear beginning and end. It is an ongoing process that reflects and adapts to changes in the environment surrounding each organization. We can see this in the case of Federal Express, which entered the 1980s facing not only stiff competition and the rising expectations of customers, but also evolving technology. Federal Express managers had to re-evaluate their plans and plot a new course intro the future. They had to watch relationships with their key customers, with competitors such as UPS and the postal service, and with potential market place rivals such as MCI all at the same time. Deciding on actions and responses to others’ actions is the continual planning challenge for these managers.
We will take a close look at planning and the way plans are created at various levels within organizations. You will learn that one of the most important results of the planning process is a strategy for the organization. And you will learn about strategic management, a particular kind of planning that has emerged over the past several decades. Strategic management is an ongoing practice of establishing a broad program of organizational goals and the means to achieve them.
We all have dreams of finding fame and fortune and winning the respect and admiration of others. To make our dreams come true, we need be set specific measurable goals with realistic achievable deadlines. The same is true at organizations. Goals are important for at least four reasons.
Goals provide a sense of Direction: Without a goal, individuals and their organizations tend to muddle along, reacting to environmental changes without a clear sense of what they really want to achieve. By setting goals, people and their organizations bolster their motivation and gain a source of inspiration that helps them overcome the inevitable obstacles they encounter.
Goals focus our Efforts: Every person and every organization has limited resources and a wide range of possible ways to use them. In selecting a single goal or a set of related goals, we establish priorities and make a commitment about the way we will use our scarce resources. This is especially important at an organization where managers must coordination the actions of many individuals.
Goals guide our plans and decisions: Do you want to become a chess champion or a champion gymnast? The answers to such questions will shape both your short term and your long term plan and help you make many key decisions. People at organizations face similar decisions which are clarified by asking. What is our goal? Will this action move us toward or away from our organizational goal?
Goals help us evaluate our process: A clearly stated, measurable goal with a specific deadline becomes a standard of performance that lets individuals and managers alike evaluate their progress. Thus, goals are an essential part of controlling the process of making sure that actions are in keeping with goals and the plans created to achieve them. If we find we are straying off course or if we encounter unforeseen contingencies we can take corrective action by modifying our plan.