Planningmay be define as selecting the best courseof an action in anticipation of future trendsso that the desired result may be achieved.
The nature of PlanningTo minimize mistakes in decision- making, planning is undertaken. A plan, which is the output of planning, provides a methodical way of achieving desired result.
Planning at Various Management Levels Planning activities are undertaken at various levels are as follows: 1. top management level – strategic planning 2. middle management level— intermediate planning3. lower management level – operational planning
Strategic PlanningRefers to the process of determining themajor goals of the organization and thepolicies and strategies for obtaining and using resources to achieve those goals.
Intermediate planningRefers to the process of determining thecontribution that subunits can make with allocated resources.
Operational planningthe process of determining how specifictask can best accomplished on time with available resources.
The planning process Process of planning consist of various step depending on the management level that performed the planning task.1. setting organizational, divisional, or unit goals2. developing strategies or tactics too reach those goals 3. determining resources needed 4. setting standard
Setting organizational, divisional, or unit goalsThe first task of the manager is to provide a sense of direction to his firm(if he is thechief executive), to his division(if he heads a division) or to his unit( if he is a supervisor).
Developing strategies or tactics to reach goalsThe next task is to divise some means torealize them. The ways chosen to realizethe goals are called strategies and these will be concern of top management.
Determine resources needed The quantity and quality of resourcesneeded must be correctly determined. Too much resources in terms of either quality or quantity will be wasteful. Too little willmean loss of opportunities for maximizing income.
Setting StandardThe standards for measuring performance may be set at the planning stage. When actual performance does not match withthe planned performance, corrections may be made or reinforcements given.
Standard may be define as a quantitative orqualitative measuring device designed tohelp monitor the performance of people, capital goods, or process.
Types of plans: 1. Functional area 2. Time horizon3. Frequency of use
Functional Area Plans 1.Marketing Plan—written document or blueprint for implementing and controlling an organization’s marketing activities related to a particular marketing society. 2.Production Plan—written document that states the quantity of output a company must produce in broad terms and by product family.3.Financial Plan—document that summarize the current financial situation of the firm, analyzesfinancial needs, and recommends a direction for financial activities.
4. Human Resource Management Plan— document that indicates the human resource needs of a company detailed interms of quantity and quality and based on the requirements of the company’s strategic plan.
Plans with Time Horizon:1. Short-range plans— plans intended to cover a period of less than one year. 2. Long-range plans— plans covering a time span of more than one year.
Plans According to Frequency of Use: 1. Standing Plans 2. Single Use Plans
Standing PlansThese are plans that are used again and again. 1.Policies—broad guidelines to aidmanagers at every level making decision about recurring situations or function.
2.Procedures—describes the exact series of actions to be taken in a given situation.3.Rules—statements that either require of forbid a certain action.
Single Use PlansSpecifically develop to implement coursesof action that are relatively unique and are unlikely to be repeated. 1. Budgets— a plan which sets forth the project expenditures for a certain activityand explains where the required funds will come from.
2. Program—designed to coordinate a large set of activities.3. Project—that is usually more limited in scope than a program and is sometimes prepared to support a program.
Summary: Business activities, like other activities,require effective planning if objectives and goals are to be realized. A plan is a methodological way of achieving plan. Planning is undertaken at various management levels. Various steps are required in the planning process depending on the management level.
Plans may be classified in terms of functional areas, time horizon, and frequency of use.Plan consist of various parts that the manager must be familiar with.Plans can be made effective by recognizing the planning barriers and making use of planning aids.