ORGANIZATION AND MANAGEMENT

Module 5: Planning

Begin
In this Chapter, you will begin to study planning, the first management function, which sets an organization’s agenda.
Establishing plans based on set goals will provide direction to the organization’s activities and, thus, reduce uncertainties and wastage.
You will see planning is an extremely complex process since it requires a systematic method for recognizing and analysing the
elements of the organization’s external environment and matching them with the firm’s internal environments factors and capabilities.
Since plans are done in an environment of uncertainty, you will begin to understand how assumptions are formulated based on
forecasts of expected future situations.

Target
After going through this module, you are expected to:
1. discuss the nature of planning;
2. identify the different types of plan; and
3. conduct an interview with small business online sellers.

Try This
Directions: Choose the correct word from the table being described by the statement below and write your answer in the space
provided before the number.

Organizational plans Planning Operational plans

Specific plans Single-use plans Directional plans

_________________1. Plans used or stated once only as this applies to the entire organization; refer to the strategic plans of the firm.
_________________2. Can be generally described in terms of comprehensiveness, length of time covered or time frame, specificity,
and frequency of use.
_________________3. Plans that apply to a particular unit area only; their scope is narrow; achievement of company goals may not be
achieved if operational plans are not clear.
_________________4. A process that involves the setting of the organization’s goals, establishing strategies for accomplishing those
goals, and developing plans of action or means that managers intend to use to achieve organizational goals.
_________________5. Plans that are clearly stated and which have no room for interpretation; language used must be very
understandable.

Do This
 How important is planning to organizational managers? Explain your answer in not more than 5 sentences.

Explore
 In your own opinion what are the types of plan that is hardest to prepare?
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Definition and Nature of Planning

Planning- a process that involves the setting of the organization’s goals, establishing strategies for accomplishing those goals, and
developing plans of actions or means that managers intend to use to achieve organizational goals.
Planning is the first management function and for good reason. It is a crucial and essential part of management. Planning is
important for the following reasons:
 Planning provides direction of the organization’s human resources both managers as well as employees.
 Planning is important because it reduces uncertainty; it compels managers to consider future events that may affect their
company.
 Maximizing of wastes will result if there is proper coordination of activities due to planning; negative practices,
ineffectiveness, and inefficiencies could be easily detected and can be corrected or eliminated.
 Establishing goals and standards during planning may be used for controlling, another necessary managerial function.
Without planning, goals and standards will be absent and controlling will not be possible since there will be no standard to
compare or assess work effort with.
 Nature of Planning
1. It is a contribution to objectives,
2. It is primacy among the manager’s tasks
3. It is pervasiveness, and
4. The efficiency of resulting plans.

Nature of Planning
 Planning is goal oriented- plans arise from objectives. Objectives provide guidelines for planning.
 It is primary function- Planning provides the basis foundation from which all future management functions arise.
 It is persuasive- it is required at all levels of management.
 It is mental activity- Planning is a mental process involving-imagination, foresightedness and sound judgment.
 It is a continuous process- it is an ongoing process adapting the organization with the changes in business environment.
 It involves choice- it is essentially a choice among various alternative course of action.
 It is forward looking- Planning means looking ahead and preparing for the future.
 It is flexible- Planning is based on future forecast of events and situations.
 It is an integrated process- Plans are structured in a systematic and logical sequence where each plan or step is highly
inter-dependent and mutually supportive
 It includes effective and efficient dimensions- Plans aim at optimum utilization of resources to be efficient and are based
on predetermined objectives to measure effectiveness of the plan.

Relationship of Planning to Individual or Organizational Performance

Is there a clear relationship between planning and performance? Although numerous researchers have shown a generally
positive relationship between planning and performance, it would not be advisable, however, to judge that organizations or individuals
who formally plan have better performance compared to those who do not plan. This is because there are other environmental factors
that also affect individual or organizational performance and, thus, result in reducing the impact of planning to performance.
Finally, the planning-performance relationship could also be associated with the time spent in preparing and executing a
formal organizational or individual plan. A well-thought-out plan requires a longer period of preparation; its execution or application
must also be done for a certain period of time-months or years-before it begins to affect performance.
Difference between Goals and Plans
Goals are the targets or desired ends that management wants to reach, while plans are the actions or means that
administrators/managers intend to use to achieve organizational goals. In short, goals serve as the foundation of planning; goals
precede plans because knowing the desired targets is a must before establishing plans for reaching them.

TYPES OF PLANS
Organizational plans- can be generally described in terms of comprehensiveness, length of time covered or time frame, specificity,
and frequency of use.
Comprehensiveness- refers to the completeness of planning coverage; for example: it may start from plans that cover the entire
organization, called strategic plans, up to operational plans that apply to a particular operational area only. The more
comprehensiveness the plan is, the better, as this could completely guide both the employer and employee toward the fast achievement
of company goals.
4 Types of Plan
There are main 4 types of plan;
1. Hierarchical Plans:
These plans are drawn at three major hierarchical levels, namely, the institutional, the managerial and the technical core. The
plans for these three levels are;
 Strategic plan.
 Administrative or Intermediate plan.
 Operational plans can also be categorized according to frequency or repetitiveness of use. They are broadly classified as;
2. Standing Plans:
Standing plans are drawn to cover issues that managers face repeatedly. Such a standing plan may be called a standard
operating procedure (SOP). Generally, five types of standing plans are used;
 Mission or purpose
 Strategy
 Policies
 Rules
 Procedures
3. Single-use Plans:
Single-use plans are prepared for single or unique situations or problems and are normally discarded or replaced after one
use. Generally, four types of single-use plans are used. These are;
 Objectives or Goals
 Programs
 Projects
 Budgets
4. Contingency
Contingency plans are made to deal with situations that might crop up if these assumptions turn out to be wrong. Thus
contingency planning is the development of alternative courses of action to be taken if events disrupt a planned course of
action.
Managers meet many planning challenges as they go about their tasks and direct company’s affair. In some organizations, the
planning environment is steady, but in others, it is dynamic, so different types of plans result to meet organizational needs.

Planning types include the following:

 Strategic Plans- plans establish the organization’s overall goals and apply to the entire firm; they are broad in scope and are
the responsibility of the CEO, president, and general manager of the company
 Operational Plans- plans that apply to a particular unit area only; their scope is narrow; achievement of company goals may
not be achieved if operational plans are not clear
 Long-term Plans- plans that go beyond three years; everyone must understand the organization’s long-term plans to avoid
confusion that may divert the organization member’s attention
 Short-term Plans- plans that cover one year or less; such plans must lead toward the attainment of long-term goals and are the
responsibility of the unit /department heads
 Directional Plans- plans that are flexible or give general guidelines only; although flexible and general, these plans must still
be related to the strategic plans
 Specific Plans- plans that are clearly stated and which have no room for interpretation; language used must be very
understandable
 Single-use Plans- plans used or stated once only as this applies to the entire organization; refer to the strategic plans of the
firm
 Standing Plans- plans that are ongoing; provide guidance for different activities done repeatedly; refer to the identified
activities of operational plans
STEPS in Planning
Planning is a process and, as such, involves steps-from carrying out its purpose, setting of goals/objectives, and determining
what should be done to accomplish them. Schermerhorn (2008) gave five steps in the planning process:
1. Define your goals/objectives by identifying desired outcomes/results in very specific ways.
2. Determine where you stand in relation to set goals/objectives; know your strengths and weaknesses.
3. Develop premises regarding future conditions; anticipate future events, generate alternative “scenarios” for what may
happen; identify for each scenario things that may help or hinder progress toward your goals/objectives
4. Analyse and choose among action alternatives; list and carefully evaluate possible actions and choose the alternative most
likely to accomplish goals/objectives
5. Implement the plan and evaluate results; take corrective action and revise plans as needed.

Apply what you have learned

Interview a local small-business online seller about how their objectives are set and the time taken to achieve them. How do
their answers compare with what you have learnt in the chapter?

Reflect
Congratulations on finishing the supplementary learning module! You have just had an amazing learning journey and for
sure, you will also do the same in the succeeding modules.
For the last time, share to the class your final insights by completing the following sentence prompts.

I have learned that

_______________________________________________________________________________

I wish to ask my teacher about

_______________________________________________________________________________

Assess what you have learned

ACTIVITY:
IDENTIFICATION
Directions: Identify the following statements below. Write your answer in the space provided before the number.
_________________1. Are drawn to cover issues that managers face repeatedly.
_________________2. Are the actions or means that administrators/managers intend to use to achieve organizational goals.
_________________3. It refers to the completeness of planning coverage.
_________________4. Plans that are flexible or give general guidelines only; although flexible and general, these plans must still be
related to the strategic plans.
_________________5. Are the targets or desired ends that management wants to reach.
TRUE or FALSE
Directions: Before each statement, write TRUE if the statement id correct or FALSE if the statement is incorrect.
_____________1. Contingency plans are made to deal with situations that might crop up if these assumptions turn out to be wrong
_____________2. Goals provides direction of the organization’s human resources both managers as well as employees.
_____________3. Long-term Plans plans establish the organization’s overall goals and apply to the entire firm; they are broad in
scope and are the responsibility of the CEO, president, and general manager of the company.
_____________4. Standing plans are prepared for single or unique situations or problems and are normally discarded or replaced after
one use.
_____________5. Organizational plans can be generally described in terms of comprehensiveness, length of time covered or time
frame, specificity, and frequency of use

Reference:
Cabrera, H.M , Altarejos, A. , Benjamin R. (2016). Nature and Concept of Management, Organization and Management. Vibal
Group Inc., Quezon City
www.//iedunate.com/planning-nature-importance-types.
www.//bbamantra.com/planning-elements-process-approach.
Module 1
Answer Key:
1. Business prediction
2. Organization
3. Stakeholders
4. Customers
5. Organizational culture
6. Environmental scanning
7. Investor’s or owners
8. Power distance
9. Team structure
10. Pressure groups