The Process and Elements of Planning

Company Objectives, Plans, and Programs

  It is the determination of the course of action to
achieve the desired results.
 It involves the process of forecasting in general with
reference to the purpose of accomplishing the task
with utmost efficiency and economy
 The proximate activities are outlined with some
What is distinction and directed towards a specific course of
Planning? action.
 It is thinking before doing
 Courses of action are properly conceived before the
actual work performance
  Management planning involves the development of a
system of activities that will happen in the future.
 A mental activity, that require a careful analysis of the
present environmental conditions
 There should be available data and information before
Why is there a making a forecast
need for  It requires imagination, foresight, and sound judgment
Planning?  Involves the working of human mental faculties and
thought process of identification and evaluation of
business events which involves opportunities and
threats/
  1. To clearly define the goals and objectives of
the organization
 2.Identify strengths, weaknesses, opportunities
and threats
Planning is  3. Review present environmental conditions
done for the and draw specific strategy or course of action
following  Provide budgetary requirements for specific
reasons; activities
 Sets measures of control mechanism to
achieve the desired results.
  Organizations operates in different
fashion and intensity of operation
The Elements  The method of planning depends on who
of Effective makes it and those who put it on
Planning operation
Process  It differs in the scope of activities to be
undertaken and range of systems
application
  Forecasting – a systematic approach to probe
the future business events from available data
and information.
Essential  A mathematical technique of analysis to
Planning predict the frame of reference which the
activities are likely to happen
Elements
 SWOT analysis could be an important tool to
forecast the total company direction.
 It stands for strengths, weaknesses,
opportunities and threats
  These are the goals that put into specific terms the
vision and mission of the organization into
operational terms
 Goals establish the parameters of company
operation that can grow and change in an orderly
Objectives manner with well defined direction.
 Objectives and goals are established by top
management and defined operationally in the lower
levels of the organization.
 This enables managers to operate with maximum
freedom within the reference of the over-all
company objectives
  Economic Objectives
 Refers to market goals and what it intends to
do in order for the business to prosper
 It determines its primary business and how it
will penetrate the market condition using the
Categories of available resources
Objectives  It provides a consistent guide to channel
company operation in relation to
> Sales volume-quality of products produced and
the amount of customer patronage.
  >Share of the market- pertains to the percentage of
the market that it penetrates manufacturers of the
same or similar product
 > Profit peso margin- refers to how much is the total
profit that will be generated in company operation in
the short or long term objectives
Categories of  >Return on capital investment-pertains to the amount
Objectives of money that will be generated against total
investments, specifically say 20% for the first year of
operation, 25% on the five years annual net profit.
 > Stockholders dividends- Stockholders would be
encouraged to put more money when their capital
investments will generate more dividends
  These include the non-profit objectives of the
company in their operation in the social
environment.
 Social commitment is important in order to
Social have good image .
Objectives  Image building improves stakeholder
patronage.
 Public relations improve vehicles of public
information.
 Company policy, it is rule of action, a principle, and it sets
the objectives in motion.
>As a rule of action, it specifies a continuing decision that is
relatively permanent unless revised and changed by top
management.
Company Operating managers must participate in crafting and
Policy implementing policy decisions as they are accountable and
responsible to top Management in its effective
implementation.
Policies are positive declaration. They are commands or
rules of conduct that must be interpreted as to purpose
and carry a degree of compliance
  A. Policy is a guide in making decision on
repetitive situation
 B. It ensures uniform and consistent
Purposes of actions
Policy  C. Problems are solved in definite
manner without much consultation with
top Management.
  Program is a sequential line of activities to
implement policies and designed plans.
 A step by step approach to guide the necessary
action towards the predetermined goals.
Program  Line managers are responsible in crafting the
necessary program activities
 Participation and coordination with
subordinates ensures acceptance in its total
accomplishment and for which he is directly
responsible.
  1. It must be closely related to corporate and
operational plans
 2. It is combined with schedule to provide a
synchronized chronological sequence of activities
 3. It must provide budgetary allocations so that
Features of a timely accomplishments are assured
Program  4. Maybe prepared in narrative or tabular form
describing specific activities at designated
timeframe
 5. Short term programs maybe prepared for
specific projects, while long term programs may
be for a five year period subject to annual audit.
  While programs tells what to be done,
procedures tell and define how it is done
 Features of a Good Procedure;
 1. It analyses and study the work being
Standard described
Operating  2. It results in job simplification
Procedures
 3. It eliminates overlapping and duplications
(SOP)
 4. Ensures a high level of uniform performance
when properly established
 5. It assures the production of quality products
  6. Provides a standard system of appraisal on
employee performance
 7. It reduces the burden of decision making as
standards are all set
SOP  8. It lessens the time managers in training and
job coaching
 9. It ensures close coordination and develop
work efficiency
 10. Woks are carried out uniformly in all levels
of the operating department
  While procedures features a lot of advantages,
it discourages innovation and initiative among
managers and line workers.
 To counter the problem and to improve
Manual of existing work systems, managers must always
Procedure review the procedures.
 Participation and concerted efforts of all
concerned is necessary
 Updating and revision of the Manual of
Procedures should be done periodically
  No organization will exist without the necessary value
attached to its program objectives
 Budget is the estimate of how much money is required for the
activities to take off.
 It must start with the projection of the long and short term
goals;
 Budget refers to money, time, materials, and other
BUDGETS organizational resources required to perform works at specific
target results
 Top Management, Line and Operating managers must
cooperatively develop programs and budgets.
 The over all company goals and programs must be identified
and corresponding allocation must be set to accomplish the
desired results.
  1. It is an appraisal of expected expenses projected against
anticipated income in the future
 2.it is based on available data and information after conducting
SWOT analysis
 3. Over all company goals sets the pattern for contributing efforts of
all elements of the enterprise
 4. It precedes compilation of figures in monetary terms
Features of a representing anticipated needs
Good  5. It considers total expenditures on wages, materials, machinery,
equipment and other requirements in the operation of the business
Budgeting  6. Goal setting and programming must be cooperatively undertaken
System by all Line and Operating Managers in making specific plans
 7. It can be applied as a system of evaluation and a yardstick for
every component of the business as it pinpoints individual
accountability.
  2 Levels of Planning Spectrum
 1.Instituttional Planning-It determines what the total
organization should do in the course of its operation, It
defines the vision and mission of the enterprise, Top
management sets the overall objectives and set directional
courses of action.
The Planning  Institutional Plans are divided into capital budget, the
Hierarchy operating budget and the schedule for the implementation of
planned events
 Short range Planning- It is usually for a period of one to two
years
 Medium range – Covers a period of more than two but less
than five years
 Long range- Refers to plans of more than five years (5 years)
  Level I Board of Directors Policy Determination
 Level ll Chief Executive Long Range Planning
 Level lll VP and Sr Manager Medium Range Planning
 Level lV Line and Operation Mgrs.. Activity Planning
Organizational  Level Vline Supervisors Job Planning
Planning  Plans are guides and are not fixed
Hierarchy  They are mere estimates of the future events and must
be re assessed constantly
 Market conditions, technology and internal and
external environment must be carefully watched as any
development will have an effect on the business.
  The purpose of any organizational plan is to
pursue a development goal or address the
current problem.
 It is prepared after a careful research and study
Essentials of of the prevailing conditions of the enterprise
Planning  It sets targets and directional strategies to
accomplish the maximum potentials of its
resources.
  1. Define clearly the target goals and objectives, it must be
set by the person having authority and control. The goal
should be specific, measurable, acceptable to all
concerned, realistic and time bound
 2. It must identify all issues and problems that need to be
addressed
How to prepare a  3. Review present and past performances
Comprehensive  4. Decide on the important corporate requirements and
how to meet them
Plan  5. Prepare time tables in graphs and charts
 6. Develop strategies to accomplish the goals and
objectives
 7. Review periodically accomplishments against targets
  Organizations cannot move effectively without
plans and it cannot have an effective system of
internal control unless it has plans
 Approved plans lead to action with the
Relationship imposition of control measures to see that the
Between desired output is achieved.
Planning and  The output is then compared with the plan as
Control to its compliance with the budgetary and
resource allocations.
 The link between planning and controlling is
scheduling
  The programs must be with time tables defined specifically
into schedule of activities which were drawn in graphs and
charts.
 Any change in the scheduled time and the cost estimated is
a variance and constitute a red flag for management to
investigate
Planning and  If a job is running late or exceeding its cost estimates,
something is wrong and therefore control must be instituted
Control by management.
 When control valves are loose, variance show up and
management has to fix the loose valve.
 Planning should always be associated with control
 Overages would be much greater when variances are not
properly checked