MODULE 3.

PLANNING

Course Intended Learning Outcomes

At the end of the lesson, the students are expected to:
1) Define planning.
2) Familiarize with the nature of planning, types of plans, and planning at different levels in
the firm.
3) Identify planning techniques and tools.
4) Apply planning tools and techniques.

Course Content

3.1 Definition and Nature of Planning

Planning is a crucial and essential part of management. Planning is important for the following
reasons:
• It provides direction to all of the organization’s human resources, both managers as well
as employees. They would coordinate their actions and collaborate well with one another.
• It reduces uncertainty; compels managers to consider future events that may affect
their company.
• It minimizes wastes; negative practices, ineffectiveness, and inefficiencies could be easily
detected and can be corrected or eliminated.
• It establishes goals and standards during planning may be used for controlling, another
necessary management function.

3.1.1 Difference between Goals and Plans

Goals are the targets or desired ends that management wants to reach; plans are the actions
or means that administrators/managers intend to use to achieve the organizational goals.

Goals serve as the foundation of planning, goals precede plans because knowing the desired
targets is a must before establishing plans for reaching them.

3.2 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- completeness of planning coverage.

Length of time covered or time frame- long-term, short-term.
Specificity- very detailed, clearly defined plans wherein objectives are clearly stated and easily
understood.
Frequency of use- number of times or instances a plan may be used.

• Strategic plans- establishes the organization’s overall goals and apply to the entire firm.
Broad in scope.
• Operational plans- applies to a particular unit area only, their scope is narrow.
• Long-term plans- go beyond three years.
• Short-term plans- cover one year or less.
• Directional plans- flexible or give general guidelines only.
• Specific plans- clearly stated and no room for interpretation.
• Single-use plans- used or stated once only as this applies to the entire organization.
• Standing plans- ongoing, provide guidelines for different activities done repeatedly.

3.2.1 Steps in Planning

Planning is a process and it involves steps. Schermerhorn (2008) five steps in the planning
process.
1. Define your goals/objectives.
2. Determine your strengths and weaknesses.
3. Develop premises regarding future conditions; anticipate future events, generate
alternatives.
4. Analyze and choose among alternatives; list and carefully evaluate possible actions.
5. Implement the plan and evaluate results.

3.3 Planning at Different Levels in the Firm

Top-level Management Planning (Strategic Planning)

• Top-level managers are responsible for the organization’s strategic planning which
involves making decisions about the organization’s long-term goals and strategies.
• Strategic planning starts with defining the organization’s goals/objectives, the major
targets related to the maintenance of the organization’s stability, and its organizational
culture, values and growth improving its productivity, profitability, effectiveness, and
efficiency, among others.

Middle-level Management Planning (Tactical Planning)

• Refers to a set of procedures for changing or transforming broad strategic goals and plans
into specific goals and plans into specific goals and plans that are applicable and need
in one unit/portion of the organization.

Frontline/Lower-level Management Planning (Tactical Planning)

• Operational planning involves identifying the specific procedures and processes required
 at the lowers levels of the organization. This also involves routine tasks or tasks
repeatedly done by the organization’s lower level units.

3.4 Planning Techniques and Tools and their Applications

For effective planning in today’s dynamic environments, different techniques and tools must
be used, such as forecasting, contingency planning, scenario planning, benchmarking and
participatory planning.

Forecasting
• An attempt to predict what may happen in the future.
• Either qualitative (opinions of prominent economists) or quantitative (mathematical
calculations and statistical analyses of surveys/researches)
• Aids to planning and must be treated with caution for forecasts are predictions and may
be inaccurate, at times, due to errors of human judgment.

Contingency Planning
• Offers alternative courses of action when the unexpected happens or when things go
wrong.

Scenario Planning
• Planning for future states of affairs is a long-term version of contingency planning.
• Allows them to plan ahead and make necessary adjustments in their strategies or
operations.
• Some examples of changes or challenges that may arise in future scenarios are
environmental pollution, human rights violations, climate and weather changes,
earthquake damages to communities, and others.

Benchmarking
• Another planning technique that generally involves external comparisons of a company’s
practices and technologies with those of the other companies.
• External and Internal benchmarking.

Participatory Planning
• Planning process that includes the people who will affected by the plans and those who
will be asked to implement them in all planning steps.

3.5 Decision-making

All the managers and workers/employees in organizations make decisions or make choices
that affect their jobs and the organization they work for.
 3.5.1 The Decision-making Process According to Robbins and Coulter
1. Identify the Problem
2. Identify the Decision Criteria
3. Allocate Weights to the criteria
4. Develop Alternatives
5. Analyze the Alternatives
6. Select an Alternative
7. Implement the Chosen Alternative
8. Evaluate Decision Effectiveness

3.5.2 Types of Decisions

1. Structured or programmed decision- a decision that is repetitive and can be handled by
using a routine approach.
2. Unstructured or non-programmed decisions- applied to the resolution of problems that
are new or unusual, and for which information is incomplete.

References:

Cabrero, H. F. & Altajeros, A. DC. (2018). Organization and Management. Quezon City, PH:
Vibal Publishing House Inc.

Bueno, D. C. (2016). Organization and Management. Madaluyong City, PH: Books Atbp.
Publishing Corp.