THE FIRST FUNCTION OF Management: PRIMARY FUNCTION
Planning is the process used by managers to identify and select appropriate goals and courses of action for an organization.
3 steps to good planning :
1. Which goals should be pursued?
2. How should the goal be attained?
3. How should resources be allocated?
The planning function determines how effective and efficient the organization is and determines the strategy of the organization.
In what way does planning control the future? Planning controls the future because through planning people identify what they want to happen in the future and what they must do to make the events happen.
A Framework for Planning
Define present situation.
Establish goals and objectives.
Analyze environment in terms of aids and barriers to goals and objectives.
Develop action plans to reach goals and objectives.
A Framework for Planning, continued
Develop budgets (most action plans require money and other resources).
Implement the plans.
Control the plan (and return to Step 1 if the plan has not worked well).
Make Contingency Plans: he purpose of contingency plans is to develop an alternative in case the original plans cannot be implemented successfully or at all.
OPERATING PLANS, POLICIES, PROCEDURES, AND RULES
Operating plans, policies, procedures, and rules are vehicles for converting strategic plans into action.
Operating plans are the means through which strategic plans alter the destiny of the firm. A helpful statement is: “Operating plans involve organizational efficiency (doing things right) whereas strategic plans involve effectiveness (doing the right things).” Operating, or operational, plans provide the details of how strategic plans will be accomplished.
Vision & Mission
A vision is an idealized picture of the future of the organization
The mission identifies the firm's purpose and where it fits into the world.
Business strategy develops from planning. Strategic planning encompasses those activities that lead to the statement of goals and objectives and the choice of strategies to achieve them. The final outcome of strategic planning is statements of vision, mission, strategy, and policy.
Policies are general guidelines to follow in making decisions and taking action. As such,
they are plans. Policies are developed to support strategic plans in every area of the organization. An important managerial role is interpreting policies for employees.
Procedures are considered plans because they establish a customary method of handling future activities. They state the specific manner in which a certain activity must be accomplished.
A rule is a specific course of action or conduct that must be followed. It is the simplest type of plan. Rules should fit a strategic plan, as rule prohibiting kickbacks, for example, fits the overall plan of creating an ethical environment for employees.
A GENERAL FRAMEWORK FOR PLANNING
Three types of planning can be differentiated. Strategic planning is establishing master plans that fit the destiny of the firm. Tactical planning translates strategic plans into specific goals for organizational units. Operational planning identifies the specific procedures and actions required at lower levels in the organization.