Chapter 4 – Management Theory Basics: Planning

Management Theory Basics: Planning

The Evolution of Planning Theory

While management concepts have ancient roots, formalized management theory emerged only in the early 20th century. Though figures like Machiavelli and Adam Smith proposed management strategies centuries earlier, systematic research and publication of management as a distinct discipline began around 1900.

Effective planning is divided into two critical segments: strategic (long-range) planning that establishes organizational direction, and tactical planning that addresses shorter-term implementation requirements. This division allows organizations to maintain both visionary focus and practical execution capability.

Planning fundamentally requires organizations to establish priorities and specify intended outcomes. This process moves from broad goals to measurable objectives and finally to specific tactics. Through this progression, abstract aspirations transform into concrete action plans.

Planning Approaches

Organizations typically fall somewhere between two planning extremes:

Centralized Planning

The “One Man On a Mountain” (OMOM) approach concentrates planning authority in a single individual. While offering speed and decisiveness, this method risks catastrophic failure if the planner overlooks critical considerations or alternate perspectives. Despite these risks, OMOM planning often serves startups and small businesses effectively. Biblical patriarchs frequently employed this approach, though we see counterexamples like Pharaoh consulting advisors (including Joseph) when planning for Egypt’s future.

Collaborative Planning

The opposing approach, “A Gang in a Room” (AGIR), emphasizes consensus-building and broad participation. This democratic process appears less frequently in biblical examples but forms the foundation for the biblical court of 70 judges (Beit Din) established under Mosaic law.

Both approaches contain essential planning elements, though they differ in implementation and philosophical foundation.

Fundamental Planning Principles

Hammer and Champy, in their seminal work Reengineering the Corporation, recommend that managers consider several crucial elements when planning:

1. Question organizational purpose: Regularly examine why the organization does what it does
2. Make radical changes: Avoid superficial modifications in favor of fundamental transformation
3. Target dramatic improvements: Aim for substantial gains rather than incremental progress
4. Focus on process: Examine activities and workflows to enhance effectiveness

Their research suggests that sometimes beginning with a “clean slate” offers the most effective path forward. This principle appears in biblical examples:

• Moses confronted the challenge of transforming a slave mentality among Israelites who nostalgically recalled Egypt. Only through a new generation born in freedom could he advance the nation’s development.
• Abraham received a clean slate when leaving his father’s house and customs to pursue a new direction.

Strategic Planning Fundamentals

Collins and Porras’s research in Built to Last: Successful Habits of Visionary Companies challenges several planning myths:

Myth 1: Businesses require a “great idea” to succeed. Reality: Many successful companies experienced multiple failures before finding their path. The Israelites similarly wandered and faced desert hardships before focusing on the Promised Land.

Myth 2: Businesses must maximize wealth. Reality: While profitability matters, not all business decisions should prioritize immediate financial returns. Biblical examples show the Israelites instructed to pursue peace before battle, avoid taking spoils from certain conquests, and protect natural resources even during warfare – as in the prohibition against destroying enemy fruit trees during conflicts (Deuteronomy 20:19).

Myth 3: Organizations need external leadership for transformation. Reality: Most successful companies promote internal candidates – just as Moses appointed Joshua from within the Israelite community.

Collins and Porras found that successful organizations view products as vehicles for company growth rather than viewing the company as a vehicle for product development. Similarly, in biblical contexts, the Lord wasn’t the product – the people’s dedication to serving him was the product that motivated leaders. The vision centered on properly serving the Lord rather than simply acknowledging his existence.

Building Organizational Identity

Truly great organizations, according to Collins and Porras, develop a core ideology comprising values and purpose. The Israelites established this foundation through:

• The Ten Commandments as basic guidelines
• Supplementary oral law and leadership decisions
• Clear purpose in following divine law
• Established consequences for adherence and non-adherence

Next, organizations require “BHAGs” (Big Hairy Audacious Goals). The Israelites exemplified this approach by setting their sights beyond mere escape from slavery to conquering a new homeland – despite the fact that many Israelites initially preferred remaining in Egypt. The clarity of this goal helped maintain focus, particularly during the final 38 years of desert wandering.

Successful organizations embrace challenges rather than comfort – similar to the Israelites’ continual movement through the desert. This mobility maintained alertness and prevented complacency. These organizations also focus on long-term positioning rather than short-term advantage, much as monotheism represented a revolutionary religious approach with extraordinary longevity.

Collins and Porras also identified organizational “branching and pruning” – developing new initiatives while removing unsuccessful elements. The Israelites demonstrated this by:

• Developing specialized tribal roles based on core competencies
• Allowing the rebellious generation to die in the desert while preparing the newer generation for the Promised Land
• Adapting to new ideas, as when Moses and the Lord changed inheritance rules in response to the daughters of Zelophchad’s petition (Numbers 27:1-7)

Strategic Planning Methodologies

Strategic planning represents a dynamic process through which organizations define direction and allocate resources accordingly. Effective strategic planning requires:

1. Broad participation: Gathering diverse perspectives
2. Structured analysis: Using frameworks like SWOT (Strengths, Weaknesses, Opportunities, Threats)
3. Clear understanding: Knowing current position, desired destination, and required path
4. Comprehensive evaluation: Examining situations from multiple perspectives
5. Appropriate goal setting: Defining meaningful objectives
6. Effective route-mapping: Identifying optimal paths to objectives

This systematic approach reduces failure risk by identifying potential problems in advance, though no planning process eliminates all uncertainty – especially when dealing with long-term horizons. Abraham received a promise that a mighty nation would emerge from his lineage, yet this outcome required several centuries to materialize.

Strategic Planning Tools

Cost-Benefit Analysis (CBA) evaluates alternative courses of action through systematic research. While originally developed for military applications, CBA now informs organizational decisions across sectors, though information imperfections inevitably create planning challenges.

Game Theory, developed by mathematician John von Neumann in 1944, addresses decision complexity in multi-party situations. Unlike static cost-benefit analysis, Game Theory acknowledges that optimal choices depend on others’ potential reactions. The famous “Prisoner’s Dilemma” illustrates how individually rational choices may produce collectively suboptimal outcomes.

Biblical narratives contain numerous Game Theory applications. When Moses confronted Pharaoh, he faced multiple possible responses:

• Permission for temporary departure
• Permission for men only, leaving women and children
• Threats of execution
• Increased labor demands

Moses couldn’t predict Pharaoh’s reaction, introducing strategic risk. Similarly, Korach’s rebellion against Moses represented a strategic choice with catastrophic consequences when divine intervention resolved the conflict.

Game Theory derivatives all require choices based on assumptions rather than certainties. Decision-makers must assume rational behavior from others, though real-world decisions may be influenced by emotions, limited information, or hidden agendas. Biblical figures’ motivations – like whether Moses acted purely from divine calling or partially from personal ambition – remain similarly unknowable.

Tactical Planning

Tactical planning translates strategic vision into manageable implementation steps. This process breaks long-term objectives into benchmarks achievable through focused projects, creating actionable short and medium-term timelines.

For example, leading millions of Israelites from Egypt represented an overwhelming strategic challenge. Breaking this process into smaller tactical goals made the journey more comprehensible and communicable.

Deliverables

Effective planning resembles sophisticated game-playing – each action potentially triggers multiple reactions. Managers must develop forward-looking strategies while maintaining flexibility to address unexpected developments. Even carefully crafted plans, like rewards for employee performance, may face unanticipated challenges requiring real-time adjustments.

Biblical managers frequently demonstrated this adaptive planning approach. Some developed comprehensive initial plans with subsequent modifications; others created strategies “on the fly.” Abraham’s strategy of presenting his wife as his sister illustrates this dynamic – when the deception failed, he adjusted by acknowledging the truth despite potential personal risk.

Planning enables organizations to:

1. Establish Strategic Direction: Determine long-term organizational purpose and vision aligned with core values.
2. Develop Implementation Roadmaps: Create structured approaches for translating abstract goals into concrete achievements.
3. Anticipate Challenges: Identify potential obstacles and develop contingency responses before problems materialize.
4. Allocate Resources Effectively: Determine optimal distribution of people, capital, and assets to support organizational priorities.
5. Maintain Adaptability: Build flexibility into planning processes to accommodate changing circumstances without abandoning core objectives.

Discussion Questions

1. What was the most complicated plan you ever devised? Were you successful if you tried to execute it? What roadblocks arose in the planning or execution process?
2. What do you think was the best/worst plan in the Bible and why?