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* * * * * * Planning involves defining the organization’s goals, establishing an overall strategy for achieving those goals, and developing plans for organizational work activities. The four purposes of planning include providing direction, reducing uncertainty, minimizing waste and redundancy, and establishing the goals or standards used in controlling. Studies of the planning-performance relationship have concluded that formal planning is associated with positive financial performance, for the most part; it’s more important to do a good job of planning and implementing the plans than doing more extensive planning; the external environment is usually the reason why companies that plan don’t achieve high levels of performance; and the planning-performance relationship seems to be influenced by the planning time frame. * Goals are desired outcomes. Plans are documents that outline how goals are going to be met. Goals might be strategic or financial and they might be stated or real. Strategic plans apply to the entire organization while operational plans encompass a particular functional area. * Long-term plans are those with a time frame beyond three years. Short-term plans cover one year or less. Specific plans are clearly defined and leave no room for interpretation. Directional plans are flexible and set out general guidelines. * A single-use plan is a one-time plan designed to meet the needs of a unique situation. Standing plans are ongoing plans that provide guidance for activities performed repeatedly. * In traditional goal-setting, goals are set at the top of the organization and then become subgoals for each organizational area. MBO (management by objectives) is a process of setting mutually agreed-upon goals and using those goals to evaluate employee performance. * Well-written goals have six characteristics: (1) written in terms of outcomes, (2) measurable and quantifiable, (3) clear as to time frame, (4) challenging but attainable, (5) written down, and
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