PLANNING

INTRODUCTION

Planning is based on foresight, the fundamental capacity for mental time travel. The evolution

of forethought, the capacity to think ahead is considered to have been a prime mover in human

evolution. Planning is the process of thinking regarding the activities required to achieve a

desired goal. It is important since it helps us to identify our goals clearly. It makes us decide

clearly and concretely what we need to do to have the effect on the society that we want. It

helps us make sure that we all understand our goal and what we need to do to reach it by

involving everyone in the planning process.

DEFINITIONS

 Planning is deciding in advance what to be done in future.

 It is a process of thinking before doing.

 Is a process showing the steps a company takes to develop budgets to guide its future

activities?

 It is a fundamental management function, which involves deciding beforehand, what is

to be done, when is to be done, how it is to be done and who is going to do it.

 It is an intellectual process which lays down an organization’s objectives and develops

various courses of action, by which the organization can achieve those objectives. It

chalks out exactly, how to attain a specific goal.

 According to Aldag and srearns: planning is the selection and sequential ordering of

tasks to achieve an organizational goal.

CHARACTERISTICS OF PLANNING.

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 Managerial function: planning is a first and foremost managerial function which

provides the base for other functions of the management i.e., organizing, staffing,

directing and controlling as they are performed within the periphery of the plans made.

 Goal oriented: it focuses on defining the goals of the organization, identifying

alternative courses of action and deciding the appropriate action plan, which is to be

undertaken for reaching the goals.

 Pervasive: planning is present in all the segments and is required at all levels of the

organization. Although the scope of planning varies at different levels and departments.

 Continuous process: plans are made for a specific term i.e., a month, quarter year. Once

that period is over new plans are drawn, considering the organization’s present and

future requirements and conditions.

 Intellectual process: it is a mental exercise as it involves the application of mind to

think, forecast, imagine intellectually and innovate.

 Futuristic: planning encompasses looking into the future, to analyze and predict it so

that the organization can face future challenges effectively.

 Decision making: decisions are made regarding the choice of alternative courses of

action that can be undertaken to reach the goal. The alternative chosen should be best

among all, with the least number of the negative and highest number of positive

outcomes.

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NEED FOR PLANNING

 Planning provides direction to managers and non-managers alike. When employees

know their organization or work unit is trying to accomplish and what they must

contribute to reach goals, they can coordinate their activities, cooperate with each other

and do what it takes to accomplish those goals.

 Planning minimizes waste and redundancy. When work activities are coordinated

around plans, inefficiencies become obvious and can be corrected or eliminated.

 Planning establishes the goal or standards used in controlling. When managers plan,

they develop goals and plans. When they control, they see whether the plans can be

carried out and the goals met. Without planning, there would be no goals against which

to measure work effort.

 They guide management decisions and form the criterion against which work results

are measured. That’s why they are often described as the essential elements of planning.

PLANNING AT VARIOUS MANAGEMENT LEVELS.

1. Top management level – strategic planning

2. Middle management level – intermediate planning

3. Lower management level – operational planning

Strategic planning – refers to the process of determining the major goals of the organization

and the policies and strategies for obtaining and using resources to achieve those goals. The

output of strategic planning is a strategic plan which spells out “decision about long range goals

and the course of action to achieve these goals.

Intermediate planning – refers to the process of determining the contributions that subunits can

make with allocated resources. This type of planning is undertaken by middle management.

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Under intermediate management, the goals of a subunit are determined and a plan prepared to

provide a guide to the realization of the goals. The intermediate plan is designed to support the

strategic plan

Operational planning: - refers to the process of determining how specific tasks can be

accomplished on time with available resources. This type of planning is responsible of lower

management. It supports the strategic and intermediate plans.

TYPES OF PLANS.

The most popular way to describe organizational plans are

 Breadth: strategic versus operational.

 Time frame: short term versus long term.

 Specificity: directional versus specific.

 Frequency of use: single versus standing.

These types of plans aren’t independent i.e., strategic plans are usually long term, directional,

and single use whereas operational plans are usually short term, specific, and standing.

Strategic plans: are plans that apply to the entire organization and establish the organizations

overall goals. Plans that encompass a particular operational area of the organization are called

operational plans. These two types of plans differ because strategic plans are broad while

operational plans are narrow. Long term plans are those with a time frame beyond three years.

Short term plans are those with a time frame that covers one year or less. Any time period in

between would be an intermediate plan. Although these time classifications are fairly common,

an organization can use any planning time frame it wants.

Specific plans are clearly defined and leave no room for interpretation. a specific plan states its

objectives in a way that eliminates ambiguity and problems with misunderstanding. For

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example, a manager who seeks to increase his or her units of work output by 8 % over a given

12- month period might establish specific procedures, budget allocations, and schedules of

activities to reach that goal.

However, when uncertainty is high and managers must be flexible in order to respond to

unexpected changes, directional plans are preferable. Directional plans are flexible plans that

set out general guidelines. They provide focus but don’t lock managers into specific goals or

courses of action.

A single use plan is one time plan specifically designed to meet the need of a unique situation.

In contrast, standing plans are ongoing plans that provide guidance for activities performed

repeatedly standing plans include policies, rules, and procedures.

IMPORTANCE OF PLANNING

Planning helps an organization chart a cause of action for the achievement of its goals. The

process begins with reviewing the current operations of the organization and identifying what

needs to be improved operationally in the upcoming year.

 It sets out standards for controlling.

It compares actual performance with the standard performance and efforts are made to correct

the same.

 It helps managers to improve future performance, by establishing objectives and

selecting a course of action for the benefit of the organization.

 Efficient use of resources:

All organizations, large and small have limited resources. The planning process provides the

information that top management needs to make effective decisions about how to allocate the

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resources in a way that will enable the organization to reach its objectives. Productivity is

maximized and resources are not wasted on projects with little chance of success.

 Establishing organizational goals.

Setting goals that challenge everyone in the organization to strive for better performance is one

of the key aspects of the planning process. Goals must be aggressive but realistic. Organizations

cannot allow themselves to become too satisfied wit how they are currently doing or they are

likely to loose ground to competitors.

 Managing risk and uncertainty.

Managing risks is essential to an organization’s success. Even the largest corporations cannot

control the economic and competitive environment around them. Unforeseen events occur that

must be dealt with quickly before negative financial consequences from these environments

become severe.

 Team building and cooperation.

Planning promotes team building and a spirit of cooperation. When the plan is completed and

communicated to members of the organization, everyone knows what their responsibilities are

and how other areas of the organization need their assistance and expertise in order to complete

assigned tasks.

 Creating competitive advantages.

Planning helps organizations get a realistic view of the current strengths and weaknesses

relative to major competitors. The management team sees areas where competitors may be

vulnerable and then crafts marketing strategies to take advantage of these weaknesses.

Observing competitor’s actions can also help organizations identify opportunities they may

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have overlooked, such as emerging international markets or opportunities to market products

to completely different customers.

IMPORTANT ELEMENTS IN PLANNING.

The planning function requires to make decisions about four fundamental elements of plans.

o Objectives.

These are statements of future conditions, that a manager hopes to achieve.

All sets of objectives have three characteristics; priority, timing and measurement.

The phrase priority of objectives means that a given time, accomplishing one objective is more

important than accomplishing others.

Time dimensions imply that an organization’s activities are guided by different objectives,

depending on the duration of the action being planned.

Effective planning requires measurement of objectives. A variety of measurements exists to

quantify objectives in the eight areas that management expert Peter Drucker suggests: market

standing, innovations, productivity, physical and financial resources, profitability, manager

performance and responsibility, worker performance and attitude, social responsibility.

o Actions.

These are the means or specific activities, planned to achieve the objectives.

The terms strategic and tactics refer to planned courses of action.

o Resources.

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These are constraints on the course of action. It also involves budgeting, identifying the sources

and levels of resources that can be committed to the courses of action.

Management can select the type of budget that best suits the planning needs of the organization.

o Implementation.

Involves the assignment of personnel to carry out the plan. The three approaches to

implementation are authority, persuasion and policy.

ORGANISATIONAL PLANNING PROCESS.

Organization planning is the process of defining a company’s reason for existing, setting goals

aimed at realizing full potential and creating increasingly discrete tasks to meet those goals.

Each phase of planning is a subset of the prior, with strategic planning being the foremost.

There are four phases of a proper organization plan; strategic, tactical, operational, and

contingency.

TYPES OF ORGANISATIONAL PLANNING.

 Strategic planning.

Involves the setting of broad, long-range goals by top managers. A strategic plan is the

company’s big picture. It defines the company’s goals for a set period of time, whether

that’s one year or ten, and ensures that those goals align with the company’s mission, vision

and values.

 Tactical planning.

Involves the identification of specific, short-range objectives by lower level managers. It

describes how a company will implement its strategic plan. It is composed of several short-

term goals, typically carried out within one year, that support the strategic plan.

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 Operational planning.

Involves the setting of work standards and schedules. It encompasses what needs to happen

continually, on a day-to-day basis, in order to execute tactical plans. Operational plans would

include work schedules, policies, rules or regulations that set standards for employees.

 Contingency planning.

These are back up plans in case primary plan fails. They wait in the wings in case of a crisis

or unforeseen event.

STEPS OF ORGANISATIONAL PLANNING.

Develop the strategic plan.

Set big picture goals that align with company mission, vision and values.

Steps:

 Review your mission, vision and values.

 Gather data about your company, like performance indicating metrics from your

sales department.

 Perform a SWOT analysis; take stock of your company’s strengths, weaknesses,

opportunities and threats.

 Set big picture goals that take your mission, vison, values, data, and SWOT analysis

into account.

Translate the strategic plan into tactical steps.

Set measurable time sensitive goals for each team. Define short term goals. Develop a

process for reviewing goal achievement to make sure strategic and tactical goals are being

met. Develop contingency plans.

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Plan daily operations.

Operation plans, or the processes that determine how individual employees spend their day,

are largely the responsibility of middle managers and employees that report to them.

Execute the plans

It is time to put plans into action.

Monitor progress and adjust plans.

No plan is complete without periods of reflection and adjustment. At the end of each quarter

or the short-term goal period, middle managers should review whether or not they hit the

benchmarks established in step two, then submit data backed up reports to C-level

executives.

STRATEGIC PLANNING PROCESS.

A strategic plan is a document used to communicate with the organization the organizational

goals, the actions needed to achieve those goals and all of the other critical elements developed

during the planning exercise.

Steps:

a. Understand the need for a strategic plan.

b. Set goals.

c. Develop assumptions or premises.

d. Research different ways to achieve objectives.

e. Choose your plan of action.

f. Develop a supporting plan.

g. Implement the strategic plan.

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BARRIERS TO EFFECTIVE PLANNING

The common barriers that inhibit successful planning are as follows:

 Inability to plan or inadequate planning.

Managers are born with the ability to plan, some managers are not successful planners because

they lack the background, education, and ability

 Lack of commitment to planning process

The development of a plan requires hard work; it is much easier for a manager to claim that he

or she doesn’t have the time to work through the required planning process

 Inferior information.

Facts that are out of date, of poor quality, or insufficient quantity can be major barriers to

planning. No matter how well managers plan, if they are basing their planning on inferior

information, their plans will probably fail.

 Focusing on the present at the expense of the future.

Failure to consider the long-term effect of a plan because of emphasis on short term problems

may lead to trouble in preparing for the future.

 Too much reliance on the organization’s planning department.

Many companies have a planning department or a planning and development team. These

departments conduct studies, do research, build models, and project probable results, but they

do not implement plans. Planning department results are aids in planning and should be used

only as such. Formulating a plan is still a manager’s responsibility.

 Concentrating on controllable variables.

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Managers can find themselves concentrating on the things and events they can control, such as

new product development, but then fail to consider outside factors, such as poor economy. One

reason maybe those managers demonstrate a decided preference for the known and an aversion

to the unknown.

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