2. Why Do We Plan?
We plan because we want to avoid failures and
uncertainty
The better the planning, the more chances for
success
Common sayings about planning:
“Think before you speak”
“Look before you leap”
“Think 100 times, cut once”
“Proper planning prevent poor performance” 5Ps
“Poor planning produces poor performance”
3. How things should be done?
Thinking
Before
Doing
Doing the
Things
Evaluating
What we did
F e e d b a c k
4. Steps in Planning
Being aware of the
Opportunity /
Situation
Setting objectives
or goals
Considering planning
assumption
Identifying
alternatives
Comparing
alternatives
Choosing
an alternative
Formulating
supportive
plans
Quantifying plans
by
making budgets
1-
2-
3-
5-
4- 8-
7-
6-
5. 1- Being Aware of Opportunities
Opportunity is an unmet need or an area of
dissatisfaction
One person’s need is an opportunity for another
person
It already exists in the external environment
We need to do some research to find the
opportunities
6. Being Aware of Opportunities
We do research in light of:
The market
Competition
Customer wants
Our strengths and weaknesses (SWOT analysis)
While planning you must consider the social, political and
economical conditions of your environment
7. 2- Setting Objectives or Goals
Where we want to be and what we want to
achieve and when (SMART objectives)
Objectives may be long term or short term
Objectives or Goals may be set at all levels
In light of the organization’s objectives, we can
define objectives for the departments and units
we are working in
8. Setting SMART Objectives
To make a
reasonable profit
To improve
communication
To increase
productivity
To develop
better managers
To achieve an ROI of 12% at
the end of this year
To start a monthly
newsletter from Nov 1st
To increase output by 5% by
Dec 31without increasing the
current cost of production
To design and conduct a
training course on leadership
skills for all front line
managers by Nov 31
10. Strategic, tactical and Operational goals
Strategic Goals are linked to the strategic
planning of the organization and mark the future
that is expected for the company in the next 5 or
10 years.
Tactical Goals or planning is an action plan to be
undertaken within 1-3 years and must be fully
aligned with strategic planning.
Operational Goals are closely linked to the
processes and operation of the company as a
whole. These are assigned to people, that he or
she actively contributes to the organization’s
strategic objectives.
11. 3- Considering Planning Premises
Premises are assumptions about the environment
in which the plan is to be carried out
In what environment internal or external will our
plans operate?
Forecasting is important in premising i.e. what
kinds of market will there be?, what products?,
what new machines, skills and technology? etc.
12. 4- Identifying Alternatives
Looking for all the available alternatives
Also search for alternatives which are not
apparent at first sight
Reducing the number of alternatives
Finding out the most promising alternatives
to accomplish our plans
13. 5- Comparing Alternatives
After short listing the alternatives, we
evaluate the selected alternatives in light
of the organizational objectives and
planning premises
Every alternative may have its own
strengths and weaknesses
14. 6- Choosing an Alternative
This is the point of decision making
We chose the alternative which is most
relevant to the organizational objectives,
require less resources and bears minimum risk
Sometimes, more than one courses of action
can be adopted at the same time
15. 7- Formulating Supportive Plans
Planning does not completes with choosing the
best alternative only
We need to formulate supportive plans to
arrange resources for turning our main plans into
actions
Example of supportive plans could be planning
for traveling arrangements, planning for
acquiring financial resources etc.
16. 8- Quantifying Plans by Making Budgets
Budget is a quantified plan
It is a written statement of what sales volume we
expect, how much to spend on purchase of
equipment, what will be operating expenses,
human resource cost and other expenses
Budget also tells us what profits we are expecting
at the end of operation
Each department or unit can make its own budgets
in accordance with the corporate budget
