Fundamentals of planning

1. Fundamentals of Planning
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Rey Lugtu
www.reylugtu.com

2. Organizational Objectives
Organizational objectives are the targets
toward which the open management system
is directed. They flow from the organization’s
purpose or mission.
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3. How an Open Management System Operates
to Reach Organizational Objectives
Government
Suppliers
Customers
Competitors
Input
Process
Output
ENVIRONMENT
Organizational Objectives
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4. Goal Integration Model
B
A
C
Individual Objectives
Organizational Objectives
Extent of Goal Integration
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5. In general, an organization should set
three types of objectives:
1. Short-term objectives: targets to be achieved in
one year or less.
2. Intermediate-term objectives: targets to be achieved
in one to five years.
3. Long-term objectives: targets to be achieved in five
to seven years.
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6. Management by Objectives
Management by objectives (MBO) is a manage-
ment approach that uses organizational
objectives as the primary means of managing
organizations.
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7. Organizational
objectives reviewed
Worker
objective set
MBO for next normal
operating period begins
Performance
evaluated
Rewards
given
Progress
monitored
The MBO
Process
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8. Planning and Plans
Planning is the process of determining how
the management system will achieve its
objectives. In other words, it determines how
the organization can get where it wants to go.
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A plan is a specific action proposed to help
the organization achieve its objectives.
A planner is a one that oversees the planning
process, evaluate developed plans, and solve
planning problems.

9. Planning
• Strategic Planning is long-range
planning that focuses on the
organization as a whole
• Tactical or Operational Planning
is short-range planning that
emphasizes the current
operations of various parts of
the organization e.g. marketing,
production, finance, personnel
Planning is a particular kind of decision-making
that addresses the specific future that managers
desire for their organizations.
Mission Statements
Strategic Plans
Operational/Tactical Plans

10. Planning as the Foundation for Organizing,
Influencing, and Controlling
Planning
Organizing
Influencing
Controlling
Achieving Objectives
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11. Stating organizational
objectives
Listing alternative ways
of reaching objectives
Developing premises upon
which each alternative is based
Developing plans to
pursue chosen alternative
Choosing best alternative
for reaching objectives
Putting plans into action
STEP 1
STEP 3
STEP 4
STEP 6
STEP 5
STEP 2
Elements of
the Planning
Process
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12. Levels and Types of Planning
Figure 8.2

13. Strategic Management Process
Environmental Analysis
Goal Setting
(Establishment of Organizational Direction)
Strategic Plan Formulation
Administration
Strategic Control
Strategic Planning
Strategy
Implementation
ORGANIZATIONAL GOALS
PLANNING
CONTROLLING
LEADING, MOTIVATING
ORGANIZING

14. Symptoms of Planning Problem
• Not meeting production objectives
• Weakness in dealing with competition
• Declining sales volume
• Too low or too high inventory levels
• High operating expenses
• Too much capital investment in equipment

15. Relationships Among Symptoms, Problems,
and Opportunities That Face the Planner
Symptoms Problems Opportunities
Create Suggest
Traditional Problem Solving
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16. Why Plans Fail
1. Corporate planning is not integrated into the
total management system.
2. There is a lack of understanding of the different
steps of the planning process.
3. Management at different levels in the organization
has not properly engaged in or contributed to
planning activities.
4. Responsibility for planning is wrongly vested
solely in the planning department.
A study by K. A. Ringbakk determined that plans fail when:
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17. Success of
Organizational
Planning
Effort
Effective and
Efficient
Planning Org
Inclusion of
Right People
Implementation-
Focused
Planning
Top Management
Support
Maximizing the Effectiveness of
the Planning Process

18. Ensuring Success of an Organizational
Planning Effort
• Top Management support
• Effective and Efficient Planning Organization:
the planning organization should have three-
built-in characteristics:
– Should be designed to use established management
systems within the company
– Complex enough to ensure coordination; all facets of
the planning should be clear to all members
– Should be flexible and adaptable

19. Ensuring Success of an Organizational
Planning Effort (cont’d)
• Implementation-focused planning
– Should attain organizational objectives
– Ease of implementation
• Inclusion of right people
– Should involve managers of other functional areas in
planning and implementation
– Input from organization members who will be directly
affected by the plans

20. Four Major Dimensions to Consider When
Developing a Plan
ORGANIZATIONAL
PLAN
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21. Standing Plan Program
Policies
ProceduresRules
•Use in programmed decision situations
•Policies are general guides to action.
•Rules are formal written specific guides to action.
•Standard operating procedures (SOP) specify an
exact series of actions to follow.
•A successful standing
plan program with
mutually supportive
policies, procedures,
and rules
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22. Human Resource Planning
Human resource planning is input planning
that involves obtaining the human resources
necessary for the organization to achieve its
objectives.
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23. The Human Resource Planning
Process
Organizational Objectives
and Plans
Human Resource
Requirements
Human Resource
Inventory
Net Human Resource
Requirements
Human Resource
Programs
Expansion AdjustmentContraction
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24. Forecasting
Forecasting is a planning tool used to
predict future environmental happenings
that will influence the operation of the
organization.
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25. Scheduling
Scheduling is the process of formulating
a detailed listing of activities that must be
accomplished to attain an objective,
allocating the resources necessary to
attain the objective, and setting up and
following timetables for completing the
objective.
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26. End