BUSINESS

MANAGEMENT
Managers normally face significant challenges in
planning.
They first identify the key issues and urgent concerns in
managing people, situations, and events.
They spend time and resources to get reliable and timely
data from various sources to examine those issues and
concerns.
They analyze and synthesize results based on the data
gathered.
They draw out the main findings and recommendations to
solve the key issues and problems.
Then they apply that gained knowledge to plan in detail
the appropriate strategies and concrete actions.
PLANNING
TECHNIQUES
AND TOOLS
Planning techniques and tools pertain to the different
methods for determining, analyzing, and predicting
situations that will likely occur. This is done in order to
adequately prepare for these situations and to respond
to them in a timely and appropriate manner.
Confronted with today's challenges of heightened
competition among industry players and the dynamic
changes occurring in the environment, managers
make use of planning techniques and tools. The long-
term success of an organization depends on how well
managers are able to use and apply their knowledge,
skills, and talent for planning. Therefore, you must be
familiar with the different planning techniques and
tools that managers use to achieve target objectives.
FORECASTING
Forecasting pertains to the use of scientific techniques to
predict the likelihood of certain events or factors to happen
in the future. Managers make use of findings from data
analysts who gather sets of data and examine these
acquired information for patterns and trends)Data analysts
make certain assumptions for those patterns and trends
that may occur at a certain time in the future.

Forecasting techniques may be quantitative or qualitative

in method.
FORECASTING
Quantitative forecasting techniques use statistical tools
and analyses to predict the future. They are used when the
information about the variable you are trying to forecast
are available and can be quantified. For instance, a
marketing manager of a shoe manufacturing company is
tasked by top management to provide quarterly forecasts
of the sales volume of the shoes for the coming year.

The marketing manager can review the actual sales data

for shoes in previous periods, examine a pattern on the
sales data
Then, incorporate that sales pattern into the future.
FORECASTING
Quarterly sales volume forecasts are important because
they affect many areas related to operations, such as
production schedules, raw material purchasing plans,
inventory policies, and sales quotas.

An accurate sales forecast allows companies to efficiently

allocate resources for future growth and manage their cash
flow. Sales forecasts help set benchmarks for future trends
and allow leaders to course correct early. Revenue leaders
can align sales quotas and revenue expectations and
optimize for more wins.
FORECASTING

Qualitative forecasting techniques make use of opinions or

perceptions from experts for prediction purposes.

For instance, a panel of experts may develop a consensus

forecast of employment rate a year from now. An
advantage of the qualitative forecasting method is that it
can be applied for nonquantifiable data and when
historical data are not applicable or available.
CONTINGENCY
Contingency planning is the process of
identifying alternative courses of

PLANNING action-in the event that unforeseen or

uncontrollable events take place.
Business contingency plans are
prepared by managers in relation to
financial risks, market risks, production
risks, labor risks, information and
communication risks, and natural
disaster risks. Managers sometimes
refer to these contingency plans as
Plan A, Plan B, or even Plan C as
alternative courses of action.
CONTINGENCY
Large companies that protect people's
safety such as hospitals, or those that

PLANNING provide vital utilities such as power

firms, water service providers, and
metro rail companies, are bound by
government regulators to prepare
contingency plans in case of
emergencies. These companies have
higher standards for accuracy and
speed of recovery in case of
breakdowns or service interruptions.
 Scenario planning involves predicting
potential alternative events that might

SCENARIO happen. It entails preparing resources and

actions to prevent or mitigate the

PLANNING "shocks" from negative events. At the

same time, it helps to visualize the
positive effects of seizing opportunities.

Scenario planning, therefore, is similar to

contingency planning in preparing for
unforeseen events. However, scenario
planning is more detailed and extensive
in visualizing the alternative events that
may take place. For instance, the "worst
case scenario and the "best case scenario
are both described in detail.
FOUR TYPES Inductive Approach
OF SCENARIO Inductive approach to scenario
planning starts with a potential
PLANNING possibility based on a familiar
context but not yet a well-tested
path, and then develops this route to
grow out into several alternative
pictures of potential possibilities.

Data: I see fireflies in my backyard

every summer. Hypothesis: This
summer, I will probably see fireflies in
my backyard.
FOUR TYPES
OF SCENARIO Deductive Approach
PLANNING The deductive approach to scenario
planning starts with a general and
well-tested concept or principle, then
fleshes out this principle into several
possible detailed applications or
features.
FOUR TYPES
OF SCENARIO Incremental Approach
PLANNING The incremental approach involves a
gradual development of possibilities
that usually starts with a general
approach, then leads to another
potential approach, and so forth. The
scenarios take many twists and
turns.
FOUR TYPES
OF SCENARIO Normative Approach
PLANNING The normative approach involves
developing possibilities emanating
from a major path and ultimately
aimed toward a grand vision or an
ideal end-goal.
In general, developing detailed scenarios as a
planning technique ultimately depends on the
end-objectives of an institution and the cognitive
styles (e.g., feeling vs. thinking, or sensation vs.
intuition) of the individuals who develop the finer
details of the different scenarios. For instance,
some scenario planners would prefer five
detailed narratives to come up with good
scenarios, while other would opt for just three to
four scenarios.
 BENCHMARKING

Benchmarking technique is finding out what other organizations are

doing well and then incorporating those "best practices" into the
operations of one's organization to improve its cost and effectiveness. It
compares the methods and approaches used by high performing
companies with those of one's company. This technique is call
"EXTERNAL BENCHMARKING"
The benchmarked activities may include the following:

how inventories are managed

how customer complaints are handled
how raw materials are purchased
how wastes are reduced and reveled
how preventive maintenance is performed
how factory defects are eliminated
other practices that can be examined in terms of
competitiveness
Example of External Benchmarking
Take for instance a small hotel that can benchmark or
learn from examining the good housekeeping
practices of the number one leader in the hotel
industry. Studying the practices of other companies
may be done by collecting information from published
reports, visiting the Web sites of the admired
companies, holding interviews with industry experts,
conducting customer feedback surveys, and arranging
for field trips to the facilities of other companies.
Internal Benchmarking
Managers can also learn from the best practices of
other units within their own organization. This
technique is called internal benchmarking. Gathering
benchmarking data from within one's company is
relatively easier compared to collecting data from
other competing or noncompeting companies. For
instance, the Marketing Department can assess and
learn from the effective cost-cutting measures being
adopted by the Finance Department.
 Suppose you have recently put up a
merchandise store business. Your shop

LEARNING sells clothes, shoes, fashion accessories,

toys, and sporting goods. In your effort to

ACTIVITY improve your store operations, you want

to do benchmarking. You are going to
observe and study the best practices of
one of the popular malls located in Metro
Manila.

Questions:
1. Which mall or department store
would you choose?
2. What specific store practices
would you like to observe and learn
from that mall?
ASSIGNMENT - ASSESSMENT

Predict my partner’s Sem Break

Students write down their predictions about what
their partners will do in the next week (Sem Break)
and then check next week which ones actually
happened. For example, students tell their partners
their hopes, plans and arrangements for the
weekend and they guess which ones which actually
come off and which ones probably won’t come to
fruition.