ü Define and Explain “PLANNING”

ü Identify the different types of planning and

explain each
ü Examine how this planning will affect the
business.
Planning is a process that involves
formulating strategies for achieving
organizational goals, as well as developing
plans of action that managers intend to use
to attain such corporate goals.
GOALS OF PLANNING are the targets that
management want to attain, whilst PLANS are
the means or measures that management
intends to employ in order to achieve the
aforementioned goals/targets.
Plans are best described in
terms of their:

- Comprehensiveness
-Time frame
-Specificity
-Frequency of use
Planning steps include:

1. Analyzing and choosing actions

alternatives
2. Implementing the plan
3. Evaluating results and taking
corrective action
How does the
Manager Plan?
Planning types includes:
1. Strategic
2. Tactical
3. Operational
4. Long term
5. Short term
6. Directional
7. Specific
8. Single use
9. Standing plans
STRATEGIC PLANNING
• sets the long-term direction of the organization in
which it wants to proceed in future.

• It focuses on the board future of the organization.

Incorporating both external information gathered by
analyzing the company’s competitive environment and
the firms internal resources, managers determine the
scope of the business to achieve the organizaiton
long-term objectives.
• Strategic planning involves the
analysis of various environmental
factors and the competition.
• Most strategic plans focus on how
to achieve goals three to five years
into the future.
• It has the potential to impact
dramatically, both positively and
negatively, on the survival and
success of the organization.

• Typically 3-5years of horizon.

• Top management is involved in
framing the strategic plans.
• translate the strategic plans into
specific goals for the specific
parts of the oganizations.
• They are for shorter time frame
and usually focused for 1-
2years
• Instead of focusing on the entire corporation, tactical
plans typically affect a single business within an
organization.
• Although tactical plans should compelement the
organizations overall strategic plan, they are often
somewhat independent of other tactical plans.
• are concerned with implementation of strategic plans by
coordinationg the work of different departments in the
organization.
• They try to integrate various organization units and
ensure the commitment to strategic plans.
• translate the tactical plans into specific goals and
actions for small units of the organization.
• They typically focus on the short term usually
12months or less.
• These plans are least complex than strategic and
tactical plans, and rarely have a direct effect on other
plans outside of the department or unit for which the
plan was developed.
• is of strategic nature and involves long period
say 3-5yeas. The long term plans usually
encompass all the fucntional areas of the
business and are affected within the existing
and long-term framework of economic, social
and technological factors.
• is usually a plan made for one year.
These are aimed at sustaining
organizaiton in its production and
distribution of current products or
services to the existing markets.
These plans directly affection
functional groups (production,
marketing, and finance.
• are put to use again and again over a long
period of time. Once established they continue
to apply until they are modified or abandoned.
Standing plan help managers in dealing with
routine matters in a pre-determined and
consitent manner.
• Examples of standing plans are:
organizational mission, and long-
term objectives, strategies,
policies, procedures and rules.
• are relevant for a specified time and after the
lapse of that time, these plans are formulated
again for next period.
• are non-recurring in nature and deal with
problems that probably will not be repeated in
the same form in future.
• Generally these plans are derived from the
standing plans
Examples: projects, budgets, targets.
• Plans that are clearly defined
and leave no room for
interpretation.
• Flexible plans that set out general
guidelines, provide focus, yet
allow discretion in implementation.
PLANNING at DIFFERENT LEVELS
Corporate Level

§ Most corporations, even those of modest size, have a corporate

headquarters. The heads of these organizations are usually
among the senior executives at the corporate headquarters.
Corporate executives at major firms include those in the
headquarters as well as those in charge of large corporate
groups such as finance, human resources, marketing, and so on.
Corporate Level

§ These corporate-level executives

primarily focus on the questions such as

• What industries should we pursue?

• What markets should the company enter?
• Which industry should the organization
invest in?
• What resources should each business
receive?
Business Level
§ At this level, managers concentrate on identifying how they will
compete effectively in the market.

§ Managers at this level strive to answer problems such as:

-Who are our direct competitors?
-What are their advantages and disadvantages?
-What are our advantages and disadvantages?
-What advantages do we have over our rivals?
Functional Level
§ At this level, managers concentrate on how they
can help the organization achieve its competitive
plan.

T hes e ex ec ut i v es ar e f r equent l y i n c har g e o f

departments like as finance, marketing, human
resources, or product development.

§ Depending on the business structure, this could

include managers in charge of a certain geographic
region or managers in charge of single stores.
Functional Level
§ Functional managers try to answer questions like,

-What activities does my unit need to perform well in

order to meet customer expectations?"

- What competitor information does my unit require to

assist the firm in competing effectively?
DECISION MAKING

Rational
§ A decision-making style in which choices are
logical, consistent, and maximize value.

§ Rationality assumptions: A rational decision

maker would be completely objective and
logical. He will have a clear and definite aim in
mind, as well as knowledge of all conceivable
choices and repercussions.
§ Making reasonable selections would
always result in selecting the alternative
that maximizes the likelihood of
accomplishing that goal.

§ Decisions are made with the

organization's best interests in mind.
ü FORECASTING
ü CONTINGENCY PLAN
ü SCENARIO PLANNING
ü BENCHMARKING
üP A R T I C I P A T O R Y
PLANNING
DECISION MAKING
Bounded Rationality

§ It is more realistic approach

§ Managers make decisions rationally but are bounded by
their ability to process information. Because they cant
possibly analyze all information on all alternatives,
manager satisfice rather than maximize. i.e. they accept
the solutions that are good enough.
§ They are being rational within the limits of their ability to
process information.
DECISION MAKING
Intuition Based

§ Making decisions based on experience,

emotions, and judgment.
§ It can be cognitive, experiential, value
or ethical, or subconcious mental
processing.
DECISION MAKING STYLES

Linear thinking style a person's predisposition

for utilising external data and facts and processing
this knowledge through rational, logical thinking to
guide decisions and actions is defined by a linear
thinking style.
DECISION MAKING STYLES
A person's non-linear thinking
style is defined by a preference for
using internal sources of information
(sentiments and intuitions) and
processing this knowledge with
internal insights, feelings, and
hunches to drive decisions and
actions.
DECISION MAKING
ERRORS and BIASES
1. Immediate gratification:

This term refers to decision makers

who want quick gratification while
avoiding immediate expenditures.
Decisions that provide immediate
payoffs are more tempting to these
people than ones that may provide
payoffs in the future.
DECISION MAKING
ERRORS and Biases
2 . A N C H O R I N G E F F E C T: T h e A N C H O R I N G
EFFECT depicts a situation in which decision makers
become hooked on initial information as a starting
point and, once set, fail to effectively adjust for future
information. First impressions, ideas, prices, and
projections have unwelcome weight in comparison to
later knowledge.
DECISION MAKING ERRORS
and BIASES

3. Confirmation Bias: The confirmation bias

occurs when decision makers seek information
that supports their previous choices while
discounting information that contradicts previous
judgments. This group disregards vital
information that contradicts their preexisting
notions.
DECISION MAKING ERRORS
and Biases
4. The availability bias causes
decision makers to remember events
that are current and vivid in their
memory. Their capacity to recall events
objectively is distorted, resulting in
distorted judgments and probability
assessments.
STEPS IN DECISION MAKING

STEP 1: Identification of the Problem

STEP 2: Identification of the Decision
Criteria
STEP 3: Allocation of weights to the
Criteria
STEP 4: The Development of Alternatives
STEP 5: The Analysis of Alternatives
STEP 6: Selection of an Alternative
STEP7: Implementation of the
Alternative Chosen
STEP8: Evaluation the Decision
Effectiveness
 DECISION MAKING
CONDITIONS
1. Certainty: it is the ideal situation to
make decision. The outcome of every
alternative is known.
2. Risk: a situation in which the decision
maker is able to estimate the likehood of
certain outcome.
3. Uncertainty: A situation in which
a decision maker has neither
certainty nor reasonable profibility
estimates available.
STEPS IN DECISION MAKING

STEP 1: Identification of the Problem

STEP 2: Identification of the Decision Criteria
STEP 3: Allocation of weights to the Criteria
STEP 4: The Development of Alternatives
STEP 5: The Analysis of Alternatives
STEP 6: Selection of an Alternative
STEP7: Implementation of the Alternative
Chosen
STEP8: Evaluation the Decision Effectiveness
 DECISION MAKING
CONDITIONS
1. Certainty: it is the ideal situation to
make decision. The outcome of every
alternative is known.
2. Risk: a situation in which the decision
maker is able to estimate the likehood of
certain outcome.
3. Uncertainty: A situation in which
a decision maker has neither
certainty nor reasonable profibility
estimates available.
ACTIVITY: Long bond paper
State 5 long term plan for a business firm with corresponding tactical and
operational plan to achieve. Criteria: content-3pts., clarity/ organize- 2pts.
=5PTS. each plan total of 50pts. - Deadline: April 18, 2023
 VIRTUAL ROLE PLAYING (Manager decided Business)

Criteria:
Content - 20pts.
Role/ Organization - 20pts.
Clarity - 20pts.
Costume/ Creativity - 20pts
Cooperation - 20pts.
Total 100pts.

Mechanics: -minimum of 5 minutes

- Deadline will be on April 27, 2023

- Failure to submit the deadline you will receive a minus

of 20pts. from your score.

- NO PRE- FINAL