2. LECTURE OUTLINE:
q What is Planning?
q What are the importance of planning
in an organization?
q What are the processes involved in
planning stage?
q What are the different types of
planning methods?
3. PLANNING IN MANAGEMENT
q It is the function of management that involves setting
objectives and determining a course of action for
achieving those objectives.
q Planning involves the creation and maintenance of a
given organizational operation.
q Planning requires that managers be aware of
environmental conditions facing their organization and
forecast future conditions.
q It also requires that managers be good decision makers.
WHAT IS PLANNING?
4. PLANNING IN MANAGEMENT
1. Planning dictates how to effectively organise a business.
It encompasses determining necessary future activities,
assigning them to the right personnel, delegating
authority, providing tools and raw material, etc.
2. Having a plan of action facilitates directing as it makes
instructions, guidance, and motivation grounded in a
brand strategy.
Planning is considered a basic function of management. It
means that a plan is necessary for any other managerial function,
be it organising, directing, staffing, or controlling:
5. PLANNING IN MANAGEMENT
3. Planning informs staffing, as it shows what work-force a
company will need.
4. Establishment of standards and measurement of actual
performance – controlling – is done against the
expectations that planning sets
Planning is considered a basic function of management. It
means that a plan is necessary for any other managerial function,
be it organising, directing, staffing, or controlling:
7. IMPORTANCE OF PLANNING IN AN ORGANIZATION
1. Efficient Use of Resources
q All organizations, large and small, have limited
resources.
q The planning process provides the information
top management needs to make effective
decisions about how to allocate the resources in
a way that will enable the organization to reach
its objectives.
q Productivity is maximized and resources are not
wasted on projects with little chance of success.
8. IMPORTANCE OF PLANNING IN AN ORGANIZATION
BENEFICIAL
PLANNING
Efficient Use of
Resources
Establishing
Organizational Goals
BENEFICIAL
9. IMPORTANCE OF PLANNING IN AN ORGANIZATION
2. Establishing Organizational Goals
q Setting goals that challenge everyone in the
organization to strive for better performance is
one of the key aspects of the planning process.
q Goals must be aggressive, but realistic.
q Organizations cannot allow themselves to
become too satisfied with how they are currently
doing – or they are likely to lose ground to
competitors.
10. IMPORTANCE OF PLANNING IN AN ORGANIZATION
BENEFICIAL
PLANNING
Efficient Use of
Resources
Establishing
Organizational Goals
BENEFICIAL
BENEFICIAL
Managing Risk And Uncertainty
11. IMPORTANCE OF PLANNING IN AN ORGANIZATION
3. Managing Risk And Uncertainty
q Managing risk is essential to an organization’s success.
Even the largest corporations cannot control the
economic and competitive environment around them.
q Planning encourages the development of “what-if”
scenarios, where managers attempt to envision possible
risk factors and develop contingency plans to deal with
them.
q The pace of change in business is rapid, and organizations must be able
to rapidly adjust their strategies to these changing conditions.
12. IMPORTANCE OF PLANNING IN AN ORGANIZATION
BENEFICIAL
BENEFICIAL
Managing Risk And Uncertainty
PLANNING
Efficient Use of
Resources
Establishing
Organizational Goals
BENEFICIAL
Creating Competitive
Advantages
BENEFICIAL
13. IMPORTANCE OF PLANNING IN AN ORGANIZATION
4. Creating Competitive Advantages
q Planning helps organizations get a realistic view of their
current strengths and weaknesses relative to major
competitors.
q The management team sees areas where competitors
may be vulnerable and then crafts marketing strategies to
take advantage of these weaknesses.
q Observing competitors’ actions can also help organizations identify
opportunities they may have overlooked, such as emerging international
markets or opportunities to market products to completely different
customer groups.
14. IMPORTANCE OF PLANNING IN AN ORGANIZATION
BENEFICIAL
BENEFICIAL
Managing Risk And Uncertainty
BENEFICIAL
PLANNING
Efficient Use of
Resources
Establishing
Organizational Goals
Team Building
and Cooperation
BENEFICIAL
Creating Competitive
Advantages
BENEFICIAL
15. IMPORTANCE OF PLANNING IN AN ORGANIZATION
5. Team Building and Cooperation
q Planning promotes team building and a spirit of
cooperation.
q 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.
16. IMPORTANCE OF PLANNING IN AN ORGANIZATION
q They see how their work contributes to the success
of the organization as a whole and can take pride in
their contributions.
q Potential conflict can be reduced when top
management solicits department or division
managers’ input during the goal setting process.
q Individuals are less likely to resent budgetary
targets when they had a say in their creation.
17. IMPORTANCE OF PLANNING IN AN ORGANIZATION
BENEFICIAL
BENEFICIAL
Managing Risk And Uncertainty
BENEFICIAL
PLANNING
Efficient Use of
Resources
Establishing
Organizational Goals
Team Building
and Cooperation
BENEFICIAL
Creating Competitive
Advantages
BENEFICIAL
19. THE PLANNING PROCESS/CYCLE
1. DEFINE OBJECTIVES
q The first, and most crucial, step in the planning process
is to determine what is to be accomplished during the
planning period.
q The vision and mission statements provide long-term,
broad guidance on where the organization is going and
how it will get there.
q The planning process should define specific goals and show how the
goals support the vision and mission.
q Goals should be stated in measurable terms where possible.
21. THE PLANNING PROCESS/CYCLE
2. DEVELOP PREMISES
q Planning requires making some assumptions about the
future.
q We know that conditions will change as plans are
implemented and managers need to make forecasts
about what the changes will be.
q These include changes in the following conditions:
a. External conditions - Laws and regulations, competitors’ actions,
new technology being available
b. Internal conditions - what the budget will be, the outcome of
employee training, a new building being completed
22. THE PLANNING PROCESS/CYCLE
q These assumptions are called the plan premises. It is
important that these premises be clearly stated at
the start of the planning process.
q Managers need to monitor conditions as the plan is
implemented.
q If the premises are not proven accurate, the plan
will likely have to be changed.
24. THE PLANNING PROCESS/CYCLE
3. EVALUATE ALTERNATIVES
q There may be more than one way to achieve a goal.
q For example, to increase sales by 12 percent, a company could hire more
salespeople, lower prices, create a new marketing plan, expand into a
new area, or take over a competitor.
q Managers need to identify possible alternatives and evaluate how
difficult it would be to implement each one and how likely each one
would lead to success.
q It is valuable for managers to seek input from different sources when
identifying alternatives. Different perspectives can provide different
solutions.
26. THE PLANNING PROCESS/CYCLE
4. IDENTIFY RESOURCES
q To implement the plan, managers must examine the
resources the organization currently has, what new resources
will be needed, when the resources will be needed, and
where they will come from.
q The resources could include people with particular skills and
experience, equipment and machinery, technology, or money.
q This step needs to be done in conjunction with the previous one,
because each alternative requires different resources. Part of the
evaluation process is determining the cost and availability of resources.
28. THE PLANNING PROCESS/CYCLE
5. PLAN AND IMPLEMENT TASKS
q Management will next create a road map that takes the
organization from where it is to its goal.
q It will define tasks at different levels in the
organizations, the sequence for completing the tasks,
and the interdependence of the tasks identified.
q Techniques such as Gantt charts and critical path planning are often used
to help establish and track schedules and priorities.
q This step needs to be done in conjunction with the previous one, because
each alternative requires different resources. Part of the evaluation
process is determining the cost and availability of resources.
30. THE PLANNING PROCESS/CYCLE
6. DETERMINE TRACKING AND EVALUATION METHODS
q It is very important that managers can track the
progress of the plan.
q The plan should determine which tasks are most critical,
which tasks are most likely to encounter problems, and
which could cause bottlenecks that could delay the
overall plan.
q Managers can then determine performance and schedule milestones to
track progress. Regular monitoring and adjustment as the plan is
implemented should be built into the process to assure things stay on
track.
32. THE DIFFERENT TYPES OF PLANNING
1. Financial or Non-Financial
Planning
2. Formal and Informal Planning
3. Specific or Routine Planning
4. Profit Planning
5. Short and Long-Range Planning
33. THE DIFFERENT TYPES OF PLANNING
1. Financial or Non-Financial Planning
a) Financial Planning - relates to the financial
position of a concern and the resources where
from money can be borrowed.
b) Non-Financial Planning - are plans relating
to the physical resources of a concern.
34. THE DIFFERENT TYPES OF PLANNING
2. Formal and Informal Planning
a) Informal Planning - Mere thinking is informal
planning.
b) Formal Planning - these are the plans which
are reduced to balck and white. They are more
than just talk put on paper. It facilitates
adequate control and pinpoints the
weaknesses.
35. THE DIFFERENT TYPES OF PLANNING
3. Specific or Routine Planning
a) Specific Planning - Any plan for a particular
purpose is known as ‘specific planning’
b) Routine Planning - the methods adopted for
accomplishing a particular object, and during a
particular period, are the same without any
major change. Methods are merely repeated
under a planned programmed. Routing does
not require any ingenuity or creativity on the
part of the planners.
36. THE DIFFERENT TYPES OF PLANNING
4. Profit Planning
q Thus, specific efforts in this regard may relate to
‘profit planning’.
q Profit planning is generally based on forecast, and
therefore, to get profit, certain steps must be taken,
duties must be assigned and the future forecasted
in such a way as to get the object fulfilled.
q Profit planning helps the management in attaining
higher level of profit.
37. THE DIFFERENT TYPES OF PLANNING
5. Short and Long-Range Planning
q The definition of long-range and short- range planning depends
on the manager’s level in the organisational hierarchy, on the
type of business, the kind of industry in which the firm is engaged,
the production cycle, the quality of managerial practices and
many other factors.
Ø Short- range planning can be defined as planning which
covers a period from six to twelve months.
Ø Long-range planning usually involves time interval of three
to five years.
38. THE DIFFERENT TYPES OF PLANNING
1. Financial or Non-Financial
Planning
2. Formal and Informal Planning
3. Specific or Routine Planning
4. Profit Planning
5. Short and Long-Range Planning
39. THANK YOU!
ENGR. KIM EDUARD DANABAR
ATENEO DE NAGA UNIVERSITY
DEPARTMENT OF CIVIL ENGINEERING
