This document discusses planning, including the types, nature, importance, steps, levels, and techniques of planning. It defines strategic, tactical, and operational plans as the primary types of planning. The nature of planning is described as an intellectual, continuous process that is crucial, flexible, and contributes to objectives. Planning is said to improve utilization of resources, effectiveness, coordination, and decision making while reducing costs and risks. Key steps in planning include defining the situation, setting goals and alternatives, evaluating options, and implementing with feedback. Planning techniques discussed include Gantt charts, critical path method (CPM), and decision trees.

1. Definition and Nature of
Planning
Chapter 3

2. Whenever you see a successful business,
someone once made a courageous decision.
- Peter F. Drucker

3. Planning – The primary function of management.
Types of Planning
1. Strategic Plan
2. Tactical Plan
3. Operational Plan
Other types of Planning
Contingency Planning
Scenario Planning
The Nature of Planning

4. Essential Characteristics of Planning
1. Planning is crucial
2. An intellectual process
3. A continuous function
4. Planning is flexible
5. For all managerial functions
6. Planning contributes to the objectives
7. Future is always full of uncertainties
8. Better utilization of resources
9. Increases organizational effectiveness
10. Reduces the cost of performance
11. Help in coordination
12. Delegation is facilitated
The Nature of Planning

5. Importance of Planning
1. Planning provides direction
2. Planning reduced risks of uncertainty
3. Planning reduced overlapping and wasteful
activities
4. Planning promotes innovative ideas
5. Planning facilitates decision making
6. Planning establishes standards for controlling
The Nature of Planning

6. Steps Involved in Planning
1. Defining the current situations
2. Establishing goals and objectives
3. Establishment of planning premises
4. Determining alternative course of action
5. Evaluating all alternatives
6. Choosing a course of action
7. Devising supporting plans
8. Establishing succession of activities
9. Feedback action
The Nature of Planning

7. Planning Levels
Top Level Management
Middle Level Management
Low Level Management
Types of Plan at Different Management Levels

8. Gannt Chart
- Developed by an American engineer and
social scientist Henry L. Gannt in 1917.
- It is a planning technique that graphically
documents and presents schedule of a plan and
real progress of a project.
Planning Techniques and Tools and their Application

9. Planning Techniques and Tools and their Application
Critical Path Method
- Developed by DuPont in the 1950s and first
applied in missile-defense construction projects.
- It is a mathematical way of planning and
scheduling for programmed management to ensure
a timeless and minimum use if resources.

10. Planning Techniques and Tools and their Application
Critical Path Method
Steps in applying the CPM:
1. Identify and list down the mandatory task in order.
2. Construct a diagram illustrating the relation of each
task to the others.
3. Name the critical and non-critical paths among task
4. Find out the estimated completion time for each task
5. Establish or formulate alternatives or backups for the
main critical paths

11. Decision Trees – a complete graphical visualization
of possible decision under conditions of risk which
permits a manager to make a diagram of outcome
of different alternatives.
Payback Method – This method is used in
evaluating alternatives in purchasing equipment,
furniture and fixtures.
Planning Techniques and Tools and their Application