2. MANAGEMENT PLANNING
Its Nature
Types of Plans
Time Spans of Plans
Steps in Planning Process
Importance of Planning
Barriers to Planning
Management By Objectives
3. INTRODUCTION
Planning is one of the major functions of the
management process. A planning problem arises
only when an alternative course of action is
discovered. In this sense, it is essentially decision-
making; although, as will be seen, it is also much
more.
Planning is deciding in advance what to do, how
to do it, when to do it, and who is to do it.
4. Planning bridges the gap from where we are to
where we want to go. It makes it possible for
things to occur which would not otherwise
happen.
Planning is an intellectually demanding process; it
requires that we consciously determine courses of
action and base our decisions on purpose,
knowledge, and considered estimates.
5. PLAN AND PLANNING
PLAN
A plan is a framework for goal accomplishment. It usually outlines how the
organization intends to move towards its goals in a logical and systematic
fashion.
PLANNING
Planning is the process of developing organizational plans.
Planning is the process of thinking about what you want and how you are
going to accomplish it; determining in advance what is to be done; preparing
for the future by making decisions now.
Planning represents management’s attempts to anticipate the future and guard
itself against the threat of change, which man is urgently aware of because of
his/her time sense.
6. NATURE OF PLANNING
The essential nature of planning can be highlighted by describing
its four major aspects;
The Contribution of Planning To Purpose and Objectives
Every plan and all its supporting plans should contribute to the accomplishment of
enterprise purpose and objectives.
The Primacy of Planning
Managerial planning seeks to achieve a consistent, coordinated structure of operations
focused on desired ends.
Since managerial operations in organizing, staffing, leading, and controlling are
designed to support the accomplishment of enterprise objectives, planning logically
precedes the execution of all other managerial functions.
7. NATURE OF PLANNING
The Pervasiveness of Planning
Planning is a function of all managers, although the character and breath of planning
will vary with their authority and with the nature of policies and plans outlined by their
superiors.
If we recognize the pervasiveness of planning, we can more easily understand why
some people distinguish between policy-making and administration, or between the
“manager” and the “administrator” or “supervisor”.
The Efficiency of Plans
We measure the efficiency of a plan by its contribution to our purpose and objectives,
offset by the costs and other factors required to formulate and operate it. Plans are
efficient if they achieve their purpose at a reasonable cost, labor hour, and other
resources.
8. Vision
A vision refers to the category of intentions that are broad,
all-inclusive, and forward thinking. A vision describes
aspirations for the future, without specifying the means
that will be used to achieve those desired ends.
Mission
Mission or mission statement describes how the
organization reacts to or meets the interest of its
stakeholders.
HIERARCHY OF PLANS
9. Goals
Goals are attempts to make a mission statement more specific and
concrete. A goal is the future state or position that an organization
wants to attain within a specific period of time.
Objectives
Objectives are operational definition of goals. The main
characteristics of objectives are as follows:
=> They can be measured.
=> They reduce conflict.
HIERARCHY OF PLANS
10. The failure of some managers to recognize the variety of plans has often caused difficulty in
making planning effective. Keeping in mind that a plan encompasses any course of future
action, we can see that plans are varied.
STRATEGIC PLANS
Strategic plans are the plans developed to achieve strategic goals. More precisely, a strategic
plan is a general plan outlining decisions of resources allocation, priorities, and action steps
necessary to reach strategic goals.
TACTICAL PLANS
A tactical plan, aimed at achieving tactical goals, is developed to implement specific parts of a
strategic plan. Tactical plans typically involve upper and middle management and, compared
with strategic plans, have a somewhat shorter time horizon and a more specific and concrete
focus.
OPERATIONAL PLANS
An operational plan focuses on carrying out tactical plans to achieve operational goals.
Developed by middle and lower-level managers, operational plans have a short-term focus and
are relatively narrow in scope. Each one deals with a fairly small set of activities.
11. OPERATIONAL PLANS
Operational plans can be classified into two major groups; single-use plan and standing plan.
SINGLE-USE PLANS
Single-use plans are developed to carry out a course of action that is not likely to be
repeated in the future. There are two types of single-use plans, as follows:
Programs
Projects
STANDING PLANS
Whereas single-use plans (programs and projects) are for nonrecurring situations, standing
plans are used for activities that recur regularly over a period of time. Here, we are
discussing three types of standing plans:
Policies
Standard Operating Procedure
Rules & Regulations
12. CONTINGENCY PLANS
Another important element of an effective planning system is contingency
plans. Contingency planning is the development of alternative courses of action
to be taken if an intended plan is unexpectedly disrupted or rendered
inappropriate.
For example, suppose a rapidly expanding franchise food company has made
plans to build 100 new units during each of the next four years. Its top
managers realize, however, that a shift in the economy might call for a different
rate of expansion. Therefore, the firm develops two contingency plans; (1) if
the economy begins to expand beyond some specific level (contingency event),
then (contingency plan) the rate of the company’s growth will increase from
100 to 150 new store per year; (2) if inflation increases substantially, the
expansion rate will drop from 100 to 75 new stores per year. The organization
has now specified two crucial contingencies (expansion or inflation in the
economy outside the expected range) and two alternative plans (increased or
decreased growth).
13. TIME SPANS OF PLANS
LONG - RANGE PLANS
Long-range plans determine organizational strategy and mission. A long-range plan is a
component of a strategic plan, and usually associated with a functional strategy. This type of
plan covers many years, perhaps even decades.
INTERMEDIATE PLANS
Intermediate plans are somewhat less tentative and less subject to change, and they usually
cover periods from one to five years. This is a component of the long-range plans.
SHORT - RANGE PLANS
Short-range plans are sets of plans dealing with a time frame of one year or less. These
short-range plans have more impact on the manager’s day-to-day activities than long range
or intermediate plans. These plans schedule activities.
There are two types of short-range plans:
Operational/Action plans :: Operational plans are those that have been
systematically developed and derived from a broader framework of plans.
Reaction Plans :: Reaction plans are plans designed to allow the company
to react to an unforeseen circumstance.
14. STEPS IN PLANNING
BEING AWARE OF
OPPORTUNITY
In Light of:
The Market
Competition
What Customers Want
Our Strengths
Our Weaknesses
SETTING OBJECTIVES
OR GOALS
Where we want to be ?
What we want to accomplish ?
When we want to accomplish ?
CONSIDERING
PLANNING
PREMISES
In what environment
Internal or External
will our plans operate ?
IDENTIFYING
ALTERNATIVES
What are the most
promising alternatives to
accomplish our objectives ?
COMPARING ALTERNATIVES
IN LIGHT OF GOALS SOUGHT
Which alternative will give us
the best chance of meeting our
goals at the lowest cost and
with the highest profit ?
CHOOSING AN
ALTERNATIVE
Selecting the course of action
that we shall pursue.
FORMULATING
SUPPORTING PLANS
Such as Plans To:
Buy Equipment
Buy Materials
Hire and Train Workers
Develop A New Product
NUMBERIZING PLANS
BY MAKING BUDGETS
Develop such Budgets as:
Volume and Price of Sales
Operating Expenses
Necessary for Plans
Expenditures for Capital Equipment
15. IMPORTANCE OF PLANNING
TO OFFSET UNCERTAINTY AND CHANGE
Future uncertainty and change make planning a necessity. The future is seldom very certain,
and the further in the future the results of a decision must be considered, the less the
certainty.
TO FOCUS ATTENTION ON OBJECTIVES
Because all planning is directed toward achieving enterprise objectives, the very act of
planning focuses attention on these objectives. Well-considered overall plans unity
interdepartmental activities.
TO GAIN ECONOMICAL OPERATION
Planning minimizes costs because of the emphasis on efficient operation and consistency. No
one who has watched the assembly of automobiles in one of the larger factories can fail to be
impressed with the way that the parts and subassemblies come together.
TO FACILITATE CONTROL
Managers cannot check on their subordinates’ accomplishments without having goals and
programs against which to measure. There is no way to control without plans to use as
standards.
16. MANAGEMENT BY OBJECTIVES
Management By Objectives (MBO) can be defined as a
comprehensive managerial system that integrates many key
managerial activities in a systematic manner, and is consciously
directed toward the effective and efficient achievement of
organizational and individual objectives.
PURPOSE
The purpose of MBO is generally to give subordinates a voice in the
goal-setting and planning processes and to clarify for them exactly
what they are expected to accomplish in a given time span.
17. MANAGEMENT BY OBJECTIVES
PROCESS
The basic mechanism of the management by objectives is shown bellow through
some stages:
• Establishment of Organizational Goals and Plans at The Top Level of
Management.
• Clarification of Organizational Role.
• Setting Subordinates’ Objectives.
• Evaluation.
• Recycling Objectives.
BENEFITS
Some benefits of the management by objectives (MBO) are listed bellow:
Better Managing.
Clarified Organization.
Personal Commitment.
Development of Effective Control.
18. BARRIERS TO PLANNING
INAPPROPRIATE GOALS
Goals that are illegal, impossible, unattainable etc.
IMPROPER REWARD SYSTEM
People are often rewarded for poor goal setting behavior and
punished for proper goal-setting behavior.
DYNAMIC AND COMPLEX ENVIRONMENT
Rapid change, technological innovation, and competition
increase the difficulty in assuming future as well as in goal
setting.
19. BARRIERS TO PLANNING
RELUCTANCE TO ESTABLISH GOALS
Reluctance of some managers to establish goals for themselves and
their units. The reason for such reluctance may be lack of
confidence or fear of future.
RESISTANCE TO CHANGE
Planning essentially involves changing something about the
organization. But it is seen that often such changes are not
accepted.
CONSTRAINTS
Constraints, that limit what an organization can do, are also major
barriers in planning. Common constraints include a lack of
resources, government restrictions, and strong competition.
20. OVERCOMING THE BARRIERS
Understanding The Purpose of Goals and
Planning.
Communication and Participation.
Consistency, Revision, and Updating.
Effective Reward System.
