I. What is Planning?
Planning is a primary management function that involves defining the organization’s goals, establishing an overall strategy for achieving these goals, and developing a comprehensive set of plans to integrate and coordinate organizational work. The term planning as used in this chapter refers to formal planning.
Types of Planning: * Informal – not written down, little or no sharing of goals with others in the organization * Formal – specific goals covering a period of time are defined
II. Why do Managers Plan? Purposes of Planning * Planning gives direction * Reduces the impact of change * Minimizes waste and redundancy * Sets the standard used in controlling
Planning and Performance * Generally speaking, however, formal planning is associated with positive financial results. * The quality of the planning process and appropriate implementation probably contribute more to high performance than does the extent of planning. * When formal planning has been shown not to lead to higher performance, the environment is usually the reason. * Organizations need at least four years of systematic formal planning before performance is impacted.
III. How do Managers Plan?
Elements of Planning A. Goals * Goals are desired outcomes for individuals, groups, or entire organizations. Goals are objectives–the two terms are used interchangeably. They provide the direction for all management decisions and form the criterion against which actual work accomplishments can be measured. B. Plans * Plans are documents that outline how goals are going to be met and typically describe resource allocations, schedules, and other necessary actions to accomplish the goals.

Goals may be considered financial or strategic goals. Financial goals are