The document discusses the significance and types of business planning, emphasizing that planning is essential for management success and involves defining goals, strategies, and visions for organizations. It outlines three main types of planning—strategic, tactical, and operational—each with distinct purposes and timeframes. The text also addresses the importance of a comprehensive and methodical planning process that engages stakeholders and aligns short-term decisions with long-term objectives.

1. Business planningIyad S. Attari2009

2. IntroductionPlanning is the first function of any successful management.It is the tool that all other managerial functions depends on.It is a continuous process that aims to specify the goals, objectives, strategies, mission, and vision of any organization.

3. IntroductionDepending on the type of objectives and time frame .planning is divided into three main types; strategic, tactical, and operational.

4. Planning Concept and Principles

5. Planning Principles Good planning requires a methodical process that clearly defines the steps that lead to optimal solutions.

6. Planning Principles This process should reflect the following principles:Comprehensive : all significant options and impacts are considered. Efficient : the process should not waste time or money.Inclusive : people affected by the plan have opportunities to be involved.

7. Planning Principles Informative : results are understood by stakeholders (people affected by a decision).Integrated : individual, short-term decisions should support strategic, long-term goals. Logical : each step leads to the next.Transparent : everybody involved understands how the process operates.

8. Planning Principles A principle of good planning is that individual, short-term decisions should support strategic, long-term goals.This requires comprehensive evaluation and negotiation to help people accept solutions that may seem difficult and costly in the short-term.

9. Planning Principles Good planning is understanding, comprehensive and strategic.A planning process should not be limited to the first solution planned or the concerns of people who attend meetings.

10. ExamplePlanning Principles

11. Merchants might complain of insufficient customer parking near their storesThis problem can be defined in various ways:Not enough parking supply.

12. Too many vehicles.

13. Inefficient management of available spaces.Each implying different solutions

14. Here are questions to ask to help understand this problem:How much parking exists, including spaces currently unavailable to customers?

15. Who currently uses the most convenient spaces?

16. Who encounters this problem, when and where?

17. How is parking currently managed (including regulations and prices)?What is the cost of increasing parking supply?

18. What management strategies could help address this problem?

19. Who bears the costs and benefits from potential solutions?

20. How well do various solutions integrate with strategic planning objectives?Planning ConceptsA planning framework defines the basic planning process structure.This typically includes the following components:

21. Planning ConceptsA planning framework defines the basic planning process structure.This typically includes the following components:

22. Planning ConceptsPrinciples : A basic rule or concept used for decision-making.

23. Vision : A general description of the desired result of the planning process.

24. Problem : An undesirable condition to be mitigated (solved, reduced or compensated). Planning ConceptsGoals : A general desirable condition to be achieved.

25. Objectives : Specific ways to achieve goals.

26. Scope : The range (area, people, time, activities, etc.) to be included in a process.

27. Options : Possible solutions to a problem or ways to achieve an objective.Planning ConceptsPolicies : A general course of action.

28. Plans : A scheme or set of actions. This may be a strategic (general and broad) or an action (specific and narrow) plan.

29. Programs : A specific set of objectives, responsibilities and tasks within an organization.

30. Tasks or Actions : A specific thing to be accomplished.Planning ConceptsTargets : Something specific to be achieved.

31. Performance indicators – Practical ways to measure progress toward objectives. Planning ConceptsEvaluation refers to the process of determining the impacts of an object, activity, policy or program, and its ultimate value.

32. Types of Planning

33. Types of Planning Three types:Strategic PlanningTactical PlanningOperational Planning

34. Types of Planning Strategic Planning:The art & science of formulating, developing, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives.

35. Is a course of action to achieve long-range goals.

36. Reflect the company’s direction and its purpose as stated in its mission statement.Types of Planning Tactical Planning:The tactical plan express how the strategic plan will be executed.

37. Course of actions to achieve short-term goals, generally within a year or less.

38. Tactical plans represent the short-term efforts to achieve the strategic, longer-term goals.

39. They are concerned with what the units under top management must do, how they must do it and who has the responsibility.Types of Planning Operational Planning :IS a description of how the work will be done, the flow of work from input to end results, including the machines which will be used.Types of Planning Generally :Strategic Planning is known as long term planning.

40. Operational planning is short term planning.

41. Tactic planning relates to in between both the above.Strategic Planning

42. Environmental Analysis(S.W.O.T.)Tactical PlansOperational plans, budgetsMaster StrategiesVision, mission, strategies,goals, objectivesMonitor PerformanceImplementationAdjust

43. The art & science of formulating, developing, implementing and evaluatingcross-functional decisions that enable an organization to achieve its objectivesA complete look at how to position the organization for the future 29Strategic Planning

44. MatrixorganisationCEOTechnicalSalesINSEclmHDSSIFPMCOPDSubNWCoreQ.A.Fin.H.R.MKTSupportICTR&D

45. Fundamental decision making/problem solving modelDefines where the organization is now, where it wants to be, and how it will get there

46. Gathers internal and external information.

47. Develops alternative strategies

48. Selects appropriate strategies

49. Implements a plan

50. Evaluates and revises the plan as needed31Strategic Planning Process

51. Strategic Planning ProcessPhase 1: Strategy FormulationVisionGuiding image of the organizations desired futureStrategy FormulationDevelop vision & mission statementsDefine organizational valuesValues Describe what is important Dictate employee behaviorMissionWho the company is?

52. What the company do?

53. Who the company’s customers are?32

54. Vision, Mission, Objectives, and GoalsVision Defines the desired or intended future state of an organization or enterprise in terms of its fundamental objective and/or strategic direction.

55. Vision is a long term view.33

56. Vision, Mission, Objectives, and GoalsMission Defines the fundamental purpose of an organization or an enterprise.

57. Describing why it exists and what it does to achieve its Vision

58. A corporate Mission can last for many years, or for the life of the organization.34

59. Vision, Mission, Objectives, and GoalsGoals are general guidelines that explain what you want to achieve in your company.

60. They are usually long-term and represent global visions.

61. such as “protect public health and safety.”35

62. Vision, Mission, Objectives, and GoalsObjectivesdefine strategies or implementation steps to attain the identified goals.

63. Unlike goals, objectives are specific, measurable, and have a defined completion date.

64. They are more specific and outline the “who, what, when, where, and how” of reaching the goals.36

65. ExampleNatHealthVision, Mission, & Values

66. الرؤياالتوسع وتحقيق الإعتراف الإقليمي والعالمي كمزود رئيسي لخدمات التأمين الصحي ولإدارة المطالبات الإلكترونية، وذلك بإستخدام تقنية البطاقة الذكية

67. الرسالةتقديم خدمة متميزة للزبائن من شركات التأمين ، الصناديق ذاتية التأمين والمؤسسات الحكومية بهدف حماية الموجودات ومساعدتهم على توسعة مجالات عملهم وتحقيق تكاليف متدنية للمطالبات ، مع ضمان رفع مستويات الخدمة الطبية للمستخدم النهائي حسب السياسات التعاقدية المتفق عليها

68. قيم نات هيلثالنزاهة والإستقامةالإلتزام والمصداقيةالإفصاح والشفافيةالدقة والإنضباطالمحافظة على الممتلكاتعدم تضارب المصالحاللطف والكياسةالتعامل بمهنية ومسؤولية مع الجميع10- النظافة والترتيب والمحافظة على البيئة الصحيةحماية الملكية الفكرية وأسرار المؤسسة (نـاتهيلـث )

69. Strategic Planning ProcessPhase 2: Strategy DevelopmentStrategy DevelopmentInternal StrengthsConduct a SWOT analysis including environmental scanEstablish long-term objectives (3-5 Ys)Identify strategies: - corporate - unit & - functional SOTWExternalThreatsExternal OpportunitiesInternal Weaknesses41

70. Placeholder for your own sub headlineStrengthsWeaknessesInternal analysisExternal analysis SWOTThreatsOpportunities!SWOT Analysis

71. Placeholder for your own sub headlineS T R E N G T H SW E A K N E S S E S What do you do particularly well?

72. What do you do that is unique in the “marketplace?”

73. What do your customers/ clients/ patrons ask for you to do over and over again?

74. What do you have the right tools/ resources to accomplish?

75. What do you not feel as comfortable doing?

76. What needed resources, staff, or skills do you lack?

77. Are there new situations coming down the road that you can take advantage of (new programs being offered, new faculty joining the department, new tools available to you)?

78. Are there gaps in the “market” that you can fill?

79. Are there partnerships that might be fruitful?

80. Who is your competition and what do they offer that you can’t do as well or at all?

81. Are there “environmental” changes or situations that could cause problems for you and your programs?

82. What other roadblocks are being thrown in your path?O P P O R T U N I T I E ST H R E A T SSWOT Analysis

83. 44Strategic Planning ProcessPhase 3: Strategy ImplementationStrategy ImplementationEstablish short-term objectives (6 Ms-1 Y)Develop action plans

84. Allocate resources

85. Motivate employeesStrategic Planning ProcessPhase 4: Strategy EvaluationActivity one:Review strategiesStrategy EvaluationActivity three:Take corrective actionReview strategies

86. Measure performance

87. Take corrective actionHave significant differences occurred?YesNoActivity two:Measure performanceHave significant differences occurred?YesNoContinue present courseFramework to Evaluate StrategiesFebruary 6, 201045

88. Assessing the Internal EnvironmentDescribe the role of each function in the organization. Understand the organization structure & its effect of the implementation of strategic planningmust be able to Understand the perspective of your business partners.

89. Create communication & collaboration.

90. Identify internal needs & emerging issues.46

91. Finance: Assists other business units in the financial aspects of their business.Pricing products

92. Creating financial modelsAccounting: Balances the checkbook of the company.Accounts receivable

93. Accounts payable47Finance and Accounting

94. 48Assets, Liabilities & Equity

95. Accounts Payable & Accounts ReceivableAccounts PayableAccounts ReceivableThe money a company owes to its vender & suppliers (liability accounts)The money a company’s customers Owe the company (assets accounts)49

96. 50Balance SheetSummarizes the firm’s financial position Assets = Liabilities + EquityEvery financial transaction is an exchange, and both sides are recorded.

97. Only records transactions measured in money.

98. Profit increase equity

99. Cash withdrawal decrease equity 51Income StatementA statement explaining revenues, expenses, and profits over a specific period of time(one year or a quarter) Gross sales $360,000Less cost of goods sold $240,000Gross profit $120,000Less expenses: $50,000Salaries $20,000Rent $18,000Utilities $7,200Depreciation $1,800Interest $3,000Income less expenses $70,000Income tax expense $28,000Net income $42,000

100. 52Gross Profit Margin Measures the difference betweenwhat its costs to produce a productselling price

101. ProductPromotionPlaceKeyElements4 PsPriceMarketing and SalesSales:Sell the organization's product to the marketplaceMarketingThe process of planning, pricing, promoting & distributing goods/servicesto satisfy organizational objectives What the organization sells to make profit Who the product/service will be made available for purchase by customers Techniques for communicating information about product/service to customers A key decision in marketing plan. (large share of the market/ lowest price) 53

102. CapacityStandardsControlKeyconceptsSchedulingInventoryOperationsThe Central Focus To provide goods and services to customersPrimary responsibility Productivity, quality, cost, delivery & performanceAffected by supply chain management54

103. Information TechnologyEnables an organization to use information to support its strategic objectives.Strategic information systems are designed to achieve competitive advantages.

104. Airline reservation systems

105. Operational systems focus on reducing costs or improving productivity.

106. Remote access systems that allow telecommuting55

107. 56Employees

108. 57Increasing Employee EngagementEmployees willingness to “go the extra mile”Measuring employee engagement How employee describes the organization

109. Whether they choose to remain

110. How they work58Investing in Human CapitalHuman capital consists of combined knowledge, skills and experience of company’s employees Create an organizational culture that develop creative, loyal and empowered employees

111. HR to play a role in confirming the organization’s return on investment (ROI) in its human capitalOrganizational Design IntroductionGrowthMaturity DeclineHigh energy/creativity

112. Develop products/Services & marketsExperienced staff

113. Meet or exceed the pay rangeNo training

114. Basic employee policy

115. Change & expansion

116. Backlogs & scheduling problem Polices, procedures & rules in place Recruitment & selection increased Leadership sustains moral/ motivation while building teams Problem resolved

117. Staffing & organizational culture stabilized Additional product & services Training

118. Labour cost becomes a factor No change

119. Fixed rules & regulations Leadership resist change Enhanced product/cost reduction programs (early retirement- closing major facilities- outsourcing- third party contracts- retaining key staff) 59

120. 60Patterns of Organizations Change

121. Scanning The External Environment

122. Environmental ScanningIs a process that systematically surveys & interprets relevant data to identify external opportunities and threats NowIn the future

123. External EnvironmentFactors

124. Demographic Factors

125. Demographic FactorsAgeNontraditional labor forceGenderUnskilled laborGenerational differences Ethnicity Geographic shifts in populations

126. Demographic Factors (cont.)Age

127. Demographic Factors (cont.)AgeBaby boomers 200478 million baby boomers EducatedTrainedLoyalDependableStart to be 60 in 2006Born between 1946 and 196444%

128. Demographic Factors (cont.)Gender 47% of 2004 workforce56% of student in college campusesFamily constrain Inflexible working conditions Occupational barriers Gender stereotyping

129. Demographic Factors (cont.)Generational differencesMillenniumBorn between 1965 and 1980Born after 1980

130. Demographic Factors (cont.)Geographic shifts in populationsUrban centersThe suburbs

131. Demographic Factors (cont.)EthnicityAvoid discrimination &harassmentIncrease inclusion& engagementHispanicThe largest minority group in USHawaiiMinorities made up the majority of the population

132. Demographic Factors (cont.)Unskilled laborSkilled workersHigher educationTrainingOff shoring

133. Demographic Factors (cont.)Nontraditional labor forceFind enabling technology Create enabling environment

134. Economic FactorsGDPCPIInterestratesEconomicFactorsDisposableincomeInflationTotal value of goods and services produced in a country in a given yearGross Domestic ProductGood economyWage increases No wage increases DownsizingMeasure the average change over time in the prices paid by the consumer for goods & services UnemploymentLess investment EmploymentInvestmentConsumer Price IndexThe amount of money the consumer have to spend after taxes paid When supply of money is in excess of the amount of goods and services Salary compression Increase in starting salary

135. Other Factors

136. Risk Management Prepared by Iyad Al-Attari2007

137. First: Introduction to Risk :

138. What is Risk ?A - Any obstacles to reach the Goal . B - Any obstacle to reach profit for the business. C - Risk is connected with bad results in the future.

139. So Risk aspects * Bad results occurrence. * Future Events. * Probabilities.We Describe Risk : The Uncertainty of the future ,as the probability of bad result of any future events.

140. Example :

141. Type Of Riskswhat is the obstacles not only effect the business negatively (income) but also to Maximize income . Inflation Risk :Inflation has an advantage for producers but disadvantages for consumer.

142. To measure the inflation= The Average of all goods and services. ( The important prices and non important prices taking together .

143. So the simple average not considered to measure inflation and replaced by the Weighted Average .

144. Weighted Average (price level) = (p1 * w1) + (p2 * w2)+…………(pn * wn) = Points.

145. The relationship between inflation and unemployment . ( is negative , when the inflation increase the employers or producers use more employees to collect more revenues from the increase prices because it become worth it . ( Fillips theory ).Negative Relation2Increase1Decrease

146. Political Risk :

147. Political Risk :The probability of loss from actions of governments.Political system in the country .Changes in public opinion ,government policy , tax laws, regulations on exportations, foreign influence, & War.

148. Exchange Rate Risk :Is the risk that a foreign currency transaction will be negatively exposed in exchange rates.

149. For example the Jordanian currency drop in year 1989 against the us dollar.

150. Foreign currency risk : Hard currencies ( US Dollar, Euro , Pound , Yen )

151. Other currencies called the Soft currencies.

152. What effect the currency price : a) GNP b) Inflation c) The increase in the interest rate on the currency effect to increase the demand on it .

153. Interest Rate Risk :Is the risk of fluctuations in the value of assets due to changes in interest rates.

154. Greater the longer the maturity of the asset.

155. The value of bonds decline when the interest rates increase .

156. If interest rate Decline lower return will be available for reinvestment of interest & principal payments received .Default risk:Is the risk that the borrower will be unable to repay debt.

157. The higher the default risk the higher the rate of return required by the investor .Credit Risk :Ex. When you can collect the loans after 3 years so the purchasing power will decrease.

158. Type of credit risk :( Default risk , interest rate changes ).

159. Credit Policy : Credit period. ( 2/10 , net 30 ) Discounts given for early payments. ( 2/10 , net 30 ) Credit Standards. ( financial strength can accept credit customers, but this cause bad debts). Collection Policy. ( speed up collections but it might also anger customers).

160. Market Risk :Changes in prices will result from changes that effect all firms.

161. The Competition is the risk but not the monopoly .

162. Prices correlated to some degree with broad swing in the economy caused by recession , inflation high interest rates ,etc.

163. Called unsystematic risk or no diversifiable risk. Business Risk :Is the fluctuations in earnings before interest & tax ( Operating income) when the firm it used no debt.

164. Depends on factors such as: 1) Demand Variables. 2) Sales Price Variables. 3) Input Price Variables. 4) Amount Of Operating Leverage.

165. Regulations Risk :Such as the central bank regulation for the local banks to increase their capitals for a higher limits . The solution here is to increase the capital or merge with other banks . Finance Risk :The possibility that an asset cannot be sold on short notice for its market value .

166. Which is the risk to the shareholders from the use of financial leverage.

167. Called the liquidity risk for the short term period but when it became a chronic or long term we call it Bankruptcy.

168. From business failure , stock market, interest rates, etc.Employee Risk :Strikes.

169. Labor unions.

170. Unskilled labor.

171. Ethical risk . Management Risk :Inefficient management.

172. mismanagement.

173. Ethical risks.Technological Risk :Old machines or systems for production and services.

174. From advances in technology technical failure etc. Natural Risk :Earth quick.

175. Volcano.

176. Flood.

177. Fires.

178. Accident

179. Disease.Environmental Risk :Pollution.Natural of the Business Risk :Place of the building, (position far from the harbor or airport ).

180. Operational ( to distribution to supplies & operations, loss of access to essential assets , failures in distribution). Portfolio Risk :Is the risk remaining after allowing for risk reducing effects of combining securities into a portfolio .

181. Portfolio risk is attributable to the poor balance of risks within the portfolio.

182. There is a limitation for the no. of securities in the portfolio.According to the source of risksA) National Risk : Inside the co.Firm risk. ( any risk inside the firm).

183. Market risk. ( Competition from other co. from the same country ).

184. Inflation risk. ( and the local industry for the same industry ). B) International Risk : Outside the co.Firm risk. ( in the international markets).

185. Market risk. ( Competition from other co. from the other country ).

186. Inflation risk. ( International relations between 2 co. such as Mercedes international effect Mercedes in Jordan strongly ).EconomyMarketfirm

187. According to the standard of controllability riskA) Controllable Risk :You can minimize it but can not delete it.

188. Called  Firm risk  Systematic risk  Avoidable risk. Diversifiable risk.B) uncontrollable Risk :The risk that you can not minimize it .

189. Called  Market risk  Economy risk  Unsystematic risk Non-Diversifiable risk.Human being Behavior against Risk:A- Risk lover B- Risk Avoider (Risk Gamblers). (Risk averter).

190. Question: Do the risk avoider accept the same level of return as will as the risk lover ?Answer :No , The higher the risk the higher the return.Or higher return the higher the risk.

191. What kind of relationship between return & risk.Positive relationship .

224. key performance indicator (KPI)

225. key performance indicator (KPI)Is a measure of performance

226. Commonly used to help an organization define and evaluate how successful it is.

227. Typically in terms of making progress towards its long-term organizational goals.

228. Measure activities such as the benefits of leadership development, engagement, service, and satisfaction.

229. KPIs are typically tied to an organization's strategy using concepts or techniques such as the Balanced Scorecard.key performance indicator (KPI)The Balanced scorecard (BSC) Is a strategic performance management tool.

230. Measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy.

231. By focusing not only on financial outcomes but also on the operational, marketing and developmental inputs to these. key performance indicator (KPI)The Balanced scorecard (BSC) helps provide a more comprehensive view of a business, which in turn helps organizations act in their best long-term interests.key performance indicator (KPI)Implementing Balanced Scorecards typically includes four processes:1- Translating the vision into operational goals; 2- Communicating the vision and link it to individual performance; 3- Business planning; index setting 4- Feedback and learning, and adjusting the strategy accordingly.

232. key performance indicator (KPI)Bsc Perspectives :suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:

233. The Learning & Growth Perspective

234. The Business Process Perspective

235. The Customer Perspective

236. The Financial PerspectiveBalanced Scorecard FrameworkPlaceholder for your own sub headlineFinancial„To succeed financially, how should we appear to our shareholders?CustomerBusiness ProcessesBalancedScorecard„To achieve our vision, how should we appear to our customers?“„To satisfy our shareholders and customers, what business processes must we excel at?“Learning & Growth„To achieve our vision, how will we sustain our ability to change and improve?“

237. key performance indicator (KPI)

238. Thank YouIyad Attari