C H A P T E R

Essentials of Planning and Managing by Objectives

LEARNING OBJECTIVES

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After reading this chapter, you should understand: l What managerial planning is and why it is important l The various types of plans and show how they relate to one another l The logical steps in planning and see how these steps are essentially a rational approach to setting objectives and selecting the means of reaching them l The nature of objectives l The evolving concepts in management by objectives (MBO) l The model of the systems approach to MBO l How verifiable objectives can be set for different situations l The benefits of MBO l The weaknesses of MBO and ways to overcome them

You are now familiar with basic management theory and have been introduced to the five essential managerial functions: planning, organizing, staffing, leading, and controlling. The following chapters on planning form Part 2 of the book. In designing an environment for the effective performance of individuals working together in groups, a managers most essential task is to see that everyone understands the groups purposes and objectives and its methods of attaining them. If group effort is to be effective, people must know what they are expected to accomplish. This is the function of planning. It is the most basic of all the managerial functions. Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making, that is, choosing from among alternative future courses of action. Plans thus provide a rational approach to achieve preselected objectives. Planning also strongly implies managerial innovation, as will be discussed in Chapter 6. Planning bridges the gap from where we are to where we want to go. It is also important to point out that planning and control are inseparablethe Siamese twins of management (see Figure 4-1). Any attempt to control without plans