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• Module overview
• 1. Introduction to planning
  • 1.1 Types of plans
    • 1.1.1 Some definitions
    • 1.1.2 Domains of planning
    • 1.1.3 Users and levels of planning
  • 1.2 Completing a planning cycle
    • 1.2.1 A planning process
    • 1.2.2 Tactical and operational planning
    • 1.2.3 A participative planning process
    • 1.2.4 When to complete business planning
  • 1.3 Implementing an operational plan
    • 1.3.1 Define the plan's purpose
    • 1.3.2 Setting the planning period and scope
    • 1.3.3 Why plans fail - The strategic level
    • 1.3.4 Why plans fail - The operational or project level
  • 1.4 SMART goals
    • 1.4.1 S.M.A.R.T. Goal statements
  • 1.5 Contingency plans
    • 1.5.1 Why contingency plan?
    • 1.5.2 Contingency plans and risk
    • 1.5.3 Contingency planning actions

• 2. Plan and manage resources

  • 2.1 Plan and manage human resources
    • 2.1.1 Recruitment
    • 2.1.2 Selection
    • 2.1.3 Induction
  • 2.2 Enterprise Resource Planning (ERP)
  • 2.3 Purchasing resources
    • 2.3.1 Tangible and intangible assets
    • 2.3.2 Acquisition costs
    • 2.3.3 Depreciation costs
    • 2.3.4 Planning resource acquisition and utilisation
    • 2.3.5 Estimating resource needs
  • 2.4 Manage Capacity
    • 2.4.1. Planning capacity
    • 2.4.2. Measuring capacity
    • 2.4.3. Matching operations plans with capacity
    • 2.4.4. Capacity analysis and economies of scale
    • 2.4.5. Capacity and performance effectiveness
    • 2.4.6. Determinants of capacity
  • 2.5 Aggregate and Master Planning
    • 2.5.1 Master Schedule
    • 2.5.2 Operational control and resource planning
    • 2.5.3 Demand and scheduling control

• 3. Risk Management

  • 3.1 Risk Management
    • 3.1.1 Potential benefits from an effective risk management
    • 3.1.2 Classifying risk
    • 3.1.3 Risk and ANZS4360:2004
    • 3.1.4 Risk analysis
  • 3.2 Estimate the risk attached to a corrective action
    • 3.2.1 Risk analysis categories
    • 3.2.2 Prioritising risks

• 4. Planning projects

  • 4.1 Planning the project
    • 4.1.1 Setting the project plan
    • 4.1.2 Setting achievable outcomes
  • 4.2 Controlling Projects
    • 4.2.1 Personnel resources
    • 4.2.2 Managing project costs
    • 4.2.3 Value of managing project costs
    • 4.2.4 Estimates
    • 4.2.5 Cost Coding
    • 4.2.6 The time factor
  • 4.3 Scheduling project tasks and activities
    • 4.3.1 Project timelines and deliverables
    • 4.3.2 Critical Path Analysis (CPA)
    • 4.3.3 PERT
    • 4.3.4 Seven steps to project scheduling
    • 4.3.5 Completing project schedule activities

• 5. Problem solving and decision making

  • 5.1 Problem solving
    • 5.1.1 The problem solving process
    • 5.1.2 Solutions search
    • 5.1.3 Removing root causes
    • 5.1.4 Solutions implementation through inclusive communication processes
  • 5.2 Decision making
    • 5.2.1 Decision making model and leadership styles
  • 5.3 Decision making approaches
    • 5.3.1 The logical systems
    • 5.3.2 Contingency approach
    • 5.3.3 Quantitative - schematic and mathematical approaches
    • 5.3.4 Critical Path Analysis
    • 5.3.5 PERT
    • 5.3.6 Group quantitative approaches
    • 5.3.7 A qualitative approach
  • 5.4 Context and the influence on the decision processes
    • 5.4.1 Factors in decision making
    • 5.4.2 Rational decision making
    • 5.4.3 Creative decision making
  • 5.5 Scenarios for team decision making and problem solving
    • Problem scenario number 1 - Lost in the bush
    • Problem scenario number 2 - Toothpaste blues
    • Analysis of personal behaviour in groups

1.3.3 Why plans fail - The strategic level

Lack of shared meaning

There are two common reasons why communication or divergent understanding occurs: when the consultation process takes far too long and when people do not have a clear idea of their role and the overall purpose for the planning process.

Encouraging divergent input is commendable but it has its own drawbacks. It can take a lot of time, and when it does, management may tire of waiting and impose the plan and an implementation process regardless of employee preferences. This action imposes values which conflict or are inconsistent with the group's cultural values; it demonstrates communication divergence between management and employees.

Symbolic divergence also results when employees are not clear as to their role in the planning process. Employee involvement in the planning process is typically to implement strategies that will make the plan work, not to decide whether or not the plan is worthwhile. Any confusion regarding this role can lead to symbolic divergence.

Politics

To Mintzberg, the link between stated objectives and actual behaviours is not a direct one. He perceives the failure of many strategic plans as political, and cites several reasons as to why legitimate plans are sabotaged (Mintzberg, 1983:165):

• Goals and objectives are not operationalised for fear of evoking conflict;
• Departments focus only on their objectives and disregard the rest;
• Tasks are taken as ends in themselves;
• Both external and internal players exert pressure to protect their own vested interests.

Distortions in objectives

To be operational, goals must be agreed upon. An executive may hesitate to operationalise a goal for fear that it is not shared by all the major external and internal players. To do otherwise might evoke conflict. Thus, objectives become distorted and plans fall apart. Here again, symbolic divergence precipitates distortions to the plan. Management communication here is predicated upon a lack of co-orientation.

Sub-optimisation

The division of labour into departments divides the overall mission of a plan into a series of tasks. Departments are assigned specific functions within the total plan. Each department pursues its goals to the exclusion of the others. The plan is almost expected to sub-optimise: that is, a work group/ department is expected to do the best it can with its particular goals and forget about the rest. Sub-optimisation is essentially a management communication problem caused by the need to simplify communication in order to navigate the number of links necessary to maintain communication within a complex work setting.

Means-ends inversion

Here, employees treat their tasks to fulfil a plan as ends in themselves, that is, for personal advantage. For example, in 1970, a study showed that the majority of agencies for the blind in New York City provided services for the 'attractive blind' - the 20 per cent of employable youth and young adult blind. The remaining 80 per cent old and disabled blind people were neglected. The competition between agencies for the 20 per cent attractive blind was fierce. Once a client signed with an agency, the agency was reluctant to make him/her independent because the size of the program and the success rate dwindled as a result. Here the means-ends inversion perverted the strategic goals of the organisations (Perrow, C. cited in Mintzberg, 1983: 179).

Group pressures

Another study noted that when a white-collar group is threatened, the esprit de corps and the informal social organisation leave members to defend their entrenched interests by withholding information or having documents brought to their superior in such numbers that they cannot be physically read or signed (Merton, R. cited in Mintzberg, 1983:180). Group pressure may be brought about by departmentalisation whereby groups are created based on function, location, line, staff and level in the hierarchy. The 'them and us' mentality is a good example of group pressure which causes plans to collapse. The 'them and us' syndrome is a result of management's inability to achieve alignment of staff towards an agreed purpose.

External influences

Boards of directors and even shareholders can exert influence on planning by making demands on a corporation for short-term profit rather than long-term strategies. The so-called pension fund mentality (the treatment by shareholders of share dividends as essential pension payments) affects most western, and more recently Japanese, corporations. While this is essentially a social issue, external influences can sometimes be due to a lack of convergent orientation between external stake-holders and management. However, management communication cannot overcome divergence from, and opposition to, proposed plans when individual security and, indeed, shareholder livelihood is threatened.

Intrinsic needs of insiders

Here the employees displace legitimate power simply to serve their own personal agenda. These agenda include grudges, rivalries, and a desire for promotion. The organisation represents an important place to satisfy individual recognition not necessarily attuned to organisational values. Such behaviour demonstrates individual divergence from organisational culture. It involves the inability of management to communicate a set of organisational values which individuals adopt as their own. It may also demonstrate a lack of opportunity in the organisation for upward communication thereby providing individuals with no outlet for grievances or recognition other than non-co-operation.

Ill-considered implementation

For many managers developing a strategic plan is much easier than implementing it. The major flaw in many strategic plans is to consider implementation the last step. In a very real way, it should be first consideration.

Considering implementation issues during the planning process aligns with two elements of planning, strategic and tactical. The tactical element is critically dependent on management identifying key people for support, identifying resistance points, assessing the levels of commitment needed from key people, determining power and influencing styles, designing reinforcement systems and determining how synergy is best promoted. Lack of due regard for these issues - and the requisite strategy planning framework - can lead to implementation difficulties, or worse, failure.

Lack of creativity

Most strategic planning processes are dominated by analysis - financial, market, competitor, technology etc. - with relatively little attention paid to creativity. Creativity enhances strategic options, flushes out the best alternatives, and ensures that plans are not only formulated but are carried out.

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