Planning involves determining organizational goals and a means for achieving them. As you’ll learn in Chapter 4,planning is one of the best ways to improve performance. It encourages people to work harder, to work hard for extended periods, to engage in behaviors directly related to goal accomplishment,and to think of better ways to do their jobs. But most
Importantly,companies that plan have larger profits and faster growth than companies that don’t plan.
For example, the question “What business are we in?” is at the heart of strategic planning. You’ll learn about this in Chapter 5.If you can answer the question “What business are you in?” in two sentences or less,chances are you have a very clear plan for your business. But getting a clear plan is not so easy. eBAY paid $ 2.6 million to acquire Skype,which makes software for free phone and video calls over the Internet. eBay is now considering skype. Why? Because eBay’s CEO realized it was a poor fit with its Internet auction site and its PayPal online payment service. You’ll learn more about planning in Chapter 4 on planning and decision making, Chapter 5 on organizational strategy,Chapter 6 on innovation and change,and Chapter 7 on global management.