7-1. When is planning done? How often should it be done?

You know already that planning is an important function of managers. It's considered the most
fundamental of the four management functions because everything else that happens in the
organization stems from planning. But exactly how do managers plan? When is planning done?
Managers plan whenever there is a need to establish goals and to address how these goals are
going to be achieved. That might be at the start of a new time period or a new project. Or, it
might even be necessary to plan during currently scheduled work activities if things aren't going
according to the original plan. So planning is done whenever it's necessary to set goals and to
develop plans for achieving those goals. Now to the question of how often planning should be
done. This decision is based on the particular situation and on the time frame. Some planning is
done daily. For instance, do you have a daily to-do list that you follow? That's planning. Some
planning is done weekly or biweekly. Other planning is done quarterly and annually. Most
organizations will have specific requirements for when (and what) plans need to be completed.
And often this depends on the organizational level the manager is on. For instance, first-line
managers will have more frequent plans but those plans won't be elaborate. Managers at the top
levels may not plan as often, but the plans they're responsible for creating will be elaborate,
comprehensive, and more future-oriented.

7-2. Can a person do too much planning?

We all know that planning is important since it establishes where we're going to go, what we're
going to do, and how we're going to get there. But planning can go to extremes. You can do too
much planning. If you're spending all your time planning and not seeing that those plans are
carried out, you're doing too much planning. Those plans have to be put into motion; they have
to be implemented. After all, it doesn't do any good to continue to make plans if you don't do
something with the plans. It's like planning to retire financially secure by the time you're 35 and
then not taking actions to make sure that goal happens or planning to graduate in 3 ½ years and
then not taking the necessary courses in the right sequences to meet graduation requirements.
This doesn't mean that you don't monitor plans to see if they're on track and to make changes as
needed, but it does mean that you can't only engage in planning without ever putting the plans in
action.

7-3. Given the fact that external environments are increasingly dynamic and complex,
doesn't that make strategic and long-term planning obsolete?

The rapid pace of change in external environmental factors would make it seem impossible to do
any type of strategic and long-term planning. However, it's the fact that those external
environments are increasingly dynamic and complex that makes strategic and long-term planning
absolutely critical. Just the process of assessing what's happening in the external environment is
valuable because it forces managers to identify and evaluate critical trends and changes. One
other thing to note in relation to strategic and long-term planning is that the time frame of long-
term planning has changed considerably. Back when I was in business school in the early 1970s,
long-term was considered to be anything over 15-20 years. Can you imagine trying to plan 15
years in the future now? Try to imagine where you're going to be in 15 years and what you're
going to be doing! Needless to say, that time frame has decreased! Long-term plans are now
generally considered to be in the range of 2-3 years in the future. Even in that short time frame,
though, it can be difficult to predict and plan for changes in the external environment especially
for organizations in rapidly changing industries such as computers, bioengineering, or the like.
However, we don't just throw our hands up and say we're not even going to attempt to do
strategic and long-term planning. No, even given the complexities and difficulties of trying to
plan within these constraints, managers must not abandon their long-term strategic planning. It's
too valuable and important to do that.

7-4. Why aren't specific plans always preferable to directional plans?

Although it might seem that specific plans (those with clearly defined objectives) would always
be preferable to directional plans (those with general guidelines), they're not. It's not always
possible and desirable to have specific plans. If managers always planned just when they were
sure of what they wanted to do and where they were going, we'd never have the innovations and
new ideas that are important contributors to an organization's success.

7-5. If my planning is done well and once my plans are determined, why should they ever
have to change?

It does seem odd, doesn't it? If I do a good job planning and come up with realistic, clear, and
achievable plans, why should those plans have to change? Again, it's the fact that organizations
are dynamic, functioning systems that creates this paradox. Plans are created in a static time
frame. However, once those plans are put into action, it's no longer a static scenario. Instead,
organizational members are doing their work according to the plans. Some things work
according to plan, others do not. It's those variations to the plan, both positive and negative, that
create the need to change plans. So even if you do a good job establishing goals and plans, it
doesn't mean that they won't have to change. Let's work through a simple example. Let's say
you've planned a social activity, say a Super Bowl party, and you've done just an outstanding job
getting refreshments, additional television sets for your apartment, additional seating, and so
forth. You've knocked yourself out planning for this party. But then, something happens. You
find out you have to fill in for someone at work until 7 p.m. on Super Bowl Sunday. So your
party can't start until 7:30 p.m. You have to change your plans. So even though you planned well
and had specific plans, you had to change them. That often happens once plans move from being
just written documents to being implemented and acted upon.

7-6. Why do large organizations create rules and procedures whenever they can?

Rules and procedures are called standing plans because they cover common situations-that is,
these plans "stand in place" ready to be used whenever these situations arise. Large
organizations, and even smaller ones, will create rules and procedures whenever they can
because they're efficient. With rules and procedures, managers don't have to waste time or
resources studying the situation and making plans. They can use the rules and procedures to
guide their decisions and actions. For instance, I'm sure there's some type of procedure you
follow when registering for classes each semester. Why does your school have such a procedure?
Well, believe it or not, it's not to make your life miserable! What the registration procedure does
is make the process as efficient as possible. People know what they're supposed to do, when
they're supposed to do it, and how they're supposed to do it. In an organization, rules state
specifically what can and cannot be done in certain situations. Organizational members know the
rules; they know what decisions and actions they're permitted to do and which they're not. The
standing plans-the rules and procedures-contribute to doing work efficiently.

7-7. If for-profit organizations have only real goal-to make a profit-why do other objectives
matter?
Profit is the primary objective in for-profit organizations. Without profit, the organization will
struggle in the short run and likely cease to exist in the long run. However, other objectives are
important because no one single measure-such as profit-can be used to evaluate whether an
organization is successful. Emphasizing only profit ignores other goals (such as, for instance,
increased market share, strong product development, strong employee training and development,
or effective planning processes) that are also important and must also be reached if the company
is to survive in the long run.

7-8. Aren't stated objectives just lies and window-dressing created to make organizations
look responsible and rational?

Stated objectives are those objectives that organizations profess as their intentions. Are they just
lies and window-dressing? No, I don't think that's an appropriate way to describe stated
objectives. The reason stated objectives are viewed as lies and window-dressing is because
there's often a conflict between what organizations say and what they do. This conflict between
what organizations state as their goals and what they actually do exists because organizations
must respond to a wide variety of stakeholders.

The content of stated objectives is substantially determined by what those audiences want to
hear. Does this make the information included in the stated objectives wrong? No. It just means
that when managers were writing the stated objectives, they were responding to what they
perceived as the demands of certain stakeholders.

7-9. What are the problems with traditional objective setting?

Traditional objective setting describes when objectives flow down from the upper levels of the
organization and are broken down into sub-goals for each lower level. This approach to setting
goals assumes that top managers know what's best for the organization since only they can see
the "big picture." Employees' work efforts at lower organizational levels are then geared to meet
the objectives that have been assigned in their particular areas of responsibility. However, the
problem with this approach is that these objectives often lose clarity and unity as they make their
way down from the top of the organization to the bottom. Just picture this. Each manager is
applying his or her own set of interpretations and biases to these objectives as they pass from one
level to the next. By the time these objectives get to the bottom levels, they may have passed
through five or six (or more) layers of managers. It's no wonder that the objectives often are not
clear or unified!

7-10. What are the problems with MBO?

Management by objectives (MBO) does have its drawbacks. For one thing, MBO can be quite
time consuming. Assume for a moment that you're a manager with 15 people reporting to you.
At the beginning of an MBO cycle, you need to sit down with each of these 15 individuals and
discuss their objectives for the coming time period and help them set their goals. Then
periodically throughout the time period, you again need to sit down with each person and review
their progress toward meeting their goals and provide them feedback about how they're doing.
This takes a considerable amount of time. Another problem with MBO is that it can lead to an
overemphasis on strictly quantitative goals. The reality in organizations is that not every work
activity can be quantified easily. Another problem with setting goals in an MBO system is that
these goals may be set too high or too low and may be too inflexible. Finally, since the focus in
an MBO system is on goals or ends, employees may concentrate on achieving their goals
regardless of the means they use to get there. This single-minded devotion to achieving ends may
cause people to act unethically or irresponsibly.

8-1. How is strategic management related to the planning function?

Strategic management is closely related to the planning function since it's one specific type of
planning. Through the strategic management process, strategies or plans are created that will
enable the organization to achieve its short-run and long-run objectives. All types and sizes of
organizations are recognizing the role that strategic management plays in being successful.

8-2. Does a company's mission have to be written to be useful and effective?

The critical thing to remember about a company's mission is that it absolutely must be
communicated to and understood by all organizational members. Does this mean it has to be
written? Having it in writing may be the easiest way to do this, but obviously as long as
organizational members know what the mission is, that's the important thing. Let me describe
one of my favorite examples of how a company communicates its mission to its employees.
There's a transportation carrier in Springfield called Prime Trucking Inc. You may have seen its
trucks out on the roads. All Prime employees are given a laminated credit-card sized card that
lists and briefly describes the company's mission and its values and beliefs. The company's
philosophy is that if employees have ready access to this information and they are constantly
reminded of it every time they see this card in their wallet that they're more likely to make
decisions and take actions that are in line with the mission. This approach seems to work for this
company!

8-3. Where can you get information on what's happening in the various components of the
external environment?

Scanning and evaluating the external environment is one of the important steps in the strategic
management process. But to be able to do this, you have to know where to find the information.
Sources for this type of information include the Internet or World Wide Web, trade association
publications, government publications, competitor intelligence, business periodicals, and general
news periodicals.

8-4. How is the SWOT analysis used in the formulation of appropriate strategies?

SWOT stands for, as I'm sure you already know, strengths, weaknesses, opportunities, and
threats. Once managers have analyzed their internal functional areas, they're able to identify
where the organization has strengths and where it has weaknesses. Likewise, once the external
environment has been analyzed, managers can pinpoint the opportunities and the threats facing
the organization. Knowing the SWOT can help managers formulate appropriate strategies
because they would not want to design strategies that would highlight the organization's
weaknesses or that would take them into areas where there are significant threats. They do want
strategies that will capitalize on the organization's strengths and that exploit positive
environmental trends and changes. In other words, we wouldn't know what strategies were
appropriate unless we had information from the SWOT analysis.

8-5. What's the difference between an organization's core competencies and its competitive
advantage?
The terms core competencies and competitive advantage can be confusing. They seem like the
same thing. However, they're not. An organization's core competencies are its major value-
creating skills, capabilities, and resources-those things that it has or that it does particularly well.
But not all the organization's core competencies are going to be significant sources of
competitive advantage. We may be good at something but that "something" may not be valued
by consumers, so it's not really a competitive advantage. A competitive advantage is something
that sets us apart from our competitors; something that makes customers want our product and
not our competitors. For example, Kinkos-a place that many of you may be familiar with-has
several "things" that it does well. Such as: quick, efficient, quality copying; clean facilities; and
friendly, knowledgeable staff. However, these core competencies aren't enough to set it apart
from its competitors. Many copy services have these core competencies. Instead, its competitive
advantage is the wide array of quality services that it provides at a reasonable price. So even
though Kinkos has several core competencies, not all of them are significant sources of
competitive advantage.

8-6. I understand how strategies are formulated, but how are they implemented?

That's a good start-knowing how strategies are formulated. But just like any plan, a strategy has
to be implemented before it's of any use. How are strategies implemented? It depends on the type
of strategy. At the corporate level, we have growth, stability, and retrenchment strategies. A
growth strategy is implemented through internally increasing the levels of business operations,
through creating new businesses, and through merging with or acquiring other businesses. A
stability strategy is implemented simply by not expanding the level of operations-that is, keeping
everything at the current level of operations. Finally, retrenchment strategies are implemented by
two main methods: (1) cutting costs, and; (2) restructuring the organization through divesting,
liquidating, reengineering, downsizing, or filing for bankruptcy. At the business level, the
competitive strategies are implemented through the competencies, skills, and resources found in
the organization's various functions: marketing, production/operations, research and
development, and so forth. In addition, the competitive strategies are implemented through the
competitive actions and reactions an organization engages in.

8-7. What role does an organization's culture play in its strategy?

An organization's culture plays an important role in its strategy. The culture will affect what
strategies are formulated and how they're formulated. And it will affect how the chosen strategies
are implemented. For instance, think of 3 M's innovative and risk-taking culture. Its strategies
reflect this culture. And Southwest Airlines' strong people-orientation culture-its emphasis on
fun and making sure customers have a good time-affects the strategies it uses.

8-8. How often should a company change its strategies?

This is a tough question to answer! Obviously, if the strategies aren't having the intended effect-
that is, if the organization is not meeting its goals-then it's time to change the strategies!
However, it does depend on the strategic level we're talking about, also. Corporate strategies
encompass the entire organization and require significant resource investments. Therefore, it's
unlikely that you'll see an organization changing its corporate strategy continuously and
frequently. However, this doesn't mean that an organization will never ever change its corporate
strategy. It will, and organizations do as external and internal circumstances change. After all, an
organization doesn't want to end up as the world's best typewriter manufacturer or buggy whip
manufacturer there is since there's not much demand for either typewriters or buggy whips these
days. But, organizations are not going to have major significant changes in corporate strategy all
the time. At the business (competitive) level and the functional level, however, changes are
likely to be more common and frequent because competitors change what they do and the
marketplace changes what it values. Therefore, the company may decide to change its strategies
to counteract or to exploit the changed situation.