This document defines planning and strategy formulation. It discusses that planning involves defining objectives, establishing strategies, and developing coordinated plans. The purposes of planning are to provide direction, reduce change impact, minimize waste, and set controlling standards. Benefits include thinking ahead, developing performance standards, articulating objectives, and preparing for developments. Elements of planning are objectives, actions, resources, and implementation. Types of plans differ in breadth, time frame, specificity, and frequency. Strategic plans are long term while operational plans are short term. Contingency factors for planning include organizational level, environmental uncertainty, and commitment length. The document also discusses defining the business, establishing goals, formulating corporate, business unit, and functional strategies, and implementing

2. THE DEFINITION OF PLANNING
A PROCESS THAT INVOLVES DEFINING THE ORGANIZATION’S OBJECTIVES OR GOALS, ESTABLISHING AN
OVERALL STRATEGY FOR ACHIEVING THOSE GOALS, AND DEVELOPING A COMPREHENSIVE HIERARCHY OF
PLANS TO INTEGRATE AND COORDINATE ACTIVITIES.
Mahmood Qasim

3. PURPOSES OF PLANNING
1. GIVES DIRECTION
2. REDUCES THE IMPACT OF CHANGE
3. MINIMIZES WASTE AND REDUNDANCY
4. SETS STANDARDS USED IN CONTROLLING
Mahmood Qasim

4. BENEFITS OF PLANNING
1. FORCES MANAGERS TO THINK AHEAD
2. LEADS TO DEVELOPMENT OF PERFORMANCE STANDARDS WHICH ENABLE MORE EFFECTIVE
MANAGEMENT CONTROL
3. FORCES MANAGEMENT TO ARTICULATE CLEAR OBJECTIVES
4. PREPARES ORGANIZATION TO BE BETTER PREPARED FOR SUDDEN DEVELOPMENTS
Mahmood Qasim

5. ELEMENTS OF PLANNING
1. OBJECTIVES
2. ACTIONS
3. RESOURCES
4. IMPLEMENTATION
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6. TYPES OF PLANS
Breadth Time Frame Specificity Frequency of
Use
Strategic Long Term Directional Single Use
Operational Short Term Specific Standing
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7. Strategic Operational
Extended period of time – usually three Shorter period of time – usually monthly,
weekly or day-today
Covers broader view of the organization Deals with specific areas
Includes the formulation of objectives Defines the ways to attain the objectives
Strategic Versus Operational Plans
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8. Short-Term Plans Long-Term Plans
Covering one year or less Covering time frame beyond three years
Short-Term versus Long-Term Plans
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9. Specific Plans Directional Plans
Have clearly defined objectives Focused but does not lock managers into
specific line of action
Specific versus Directional Plans
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10. Single Use Plans Standing Plans
Designed to meet the need of a unique
situation
Ongoing plans that provide guidance for
activities repeatedly performed in
Created in response to nonprogrammed
decisions
Created in response to programmed
Single Use Plans Versus Standing
Plans
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11. CONTINGENCY FACTORS
• LEVEL IN THE ORGANIZATION
• DEGREE OF ENVIRONMENTAL UNCERTAINTY
• LENGTH OF FUTURE COMMITMENT
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12. PLANNING IN LEVELS OF
ORGANIZATIONS
Operational
Planning
Strategic
Planning
Top
Executives
Middle-Level
Managers
First-Level
Managers
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13. DEGREE OF ENVIRONMENTAL
UNCERTAINTY•THE GREATERTHE ENVIRONMENTAL UNCERTAINTY THE MORE PLANS
NEEDTO BE DIRECTIONAL AND EMPHASIS PLACED ONTHE SHORTTERM
•IF RAPID OR IMPORTANT TECHNOLOGICAL, SOCIAL, ECONOMIC LEGAL, OR
OTHER ENVIRONMENTAL CHANGESARE OCCURRING, WELL-DEFINED AND
PRECISELY CHARTERED COURSES OF ACTION ARE MORE LIKELYTO HINDER
AN ORGANIZATION’S PERFORMANCETHAN HELP IT.
•WHEN ENVIRONMENTAL UNCERTAINTY IS HIGH, SPECIFIC PLANS HAVETO
BE ALTEREDTO ACCOMMODATETHE CHANGES – OFTEN AT HIGH COST
AND DECEASED EFFICIENCY.
Mahmood Qasim

14. LENGTH OF FUTURE
COMMITMENTS
THE MORE THAT CURRENT PLANS AFFECT FUTURE COMMITMENTS, THE LONGER THE TIME FRAME FOR
WHICH MANAGERS SHOULD PLAN.
MANAGERS DO NOT PLAN FOR FUTURE DECISIONS, RATHER THEIR PLANS ARE FOR THE FUTURE IMPACT OF
THE DECISIONS THEY ARE CURRENTLY MAKING.
DECISIONS MADE TODAY BECOME A COMMITMENT TO SOME FUTURE ACTION OR EXPENDITURE.
Mahmood Qasim

15. CRITICISM OF PLANNING
• PLANNING MAY CREATE RIGIDITY
• PLANS CAN’T BE DEVELOPED FOR DYNAMIC ENVIRONMENT
• FORMAL PLANS CAN’T REPLACE INTUITION AND CREATIVITY
• PLANNING FOCUSES MANAGERS’ ATTENTION ON TODAY’S COMPETITION NOTON TOMORROW’S SURVIVAL
• FORMAL PLANNING REINFORCES SUCCESS, WHICH MAY LEAD TO FAILURE
Mahmood Qasim
Mahmood Qasim

16. TIPS FOR NEW MANAGERS
1. THINK AHEAD BY USING EXERCISES LIKE SCENARIO PLANNING ON A REGULAR BASIS
2. SEE PLANS AS A GUIDE TO ACTION. DON’T BECOME STRAITJACKETED BY PLANS THAT MAY NO LONGER BE
APPROPRIATE IN A CHANGING ENVIRONMENT
3. MAKE SURE THAT THE PLANS CREATED AT EACH OF THE THREE ORGANIZATIONAL LEVELS ARE COMPATIBLE
WITH ONE ANOTHER AND THAT MANAGERS AT ALL LEVELS RECOGNIZE HOW THEIR ACTIONS FIT INTO THE
OVERALL CORPORATE PLAN
4. GIVE MANAGERS AT ALL LEVELS THE OPPORTUNITY TO PARTICIPATE IN THE PLANNING PROCESS TO BEST
ANALYZE AN ORGANIZATION'S PRESENT SITUATION AND FUTURE SCENARIOS THAT MAY AFFECT IT
Mahmood Qasim

17. DEFINING THE BUSINESS
TO DETERMINE AN ORGANIZATION’S MISSION, MANAGERS MUST FIRST DEFINE ITS NOSINESS SO THAT THEY
CAN IDENTIFY WHAT KIND OF VALUE THEY WILL PROVIDE TO CUSTOMERS. TO DEFOME THE BUSINESS,
MANAGERS MUST ASK THREE QUESTIONS:
1. WHO ARE OUR CUSTOMERS?
2. WHAT CUSTOMER NEEDS ARE BEING SATISFIED?
3. HOW ARE WE SATISFYING CUSTOMER NEEDS?
Mahmood Qasim

18. ESTABLISHING MAJOR GOALS
AFTER DEFINING THE BUSINESS, MANAGERS MUST ESTABLISH A SET OF PRIMARY GOALS T WHICH THE
ORGANIZATION IS COMMITTED. DEVELOPING THESE GOALS GIVES THE ORGANIZATION SENSE OF DIRECTION
OR PURPOSE.
TIME PERIOD IN WHICH A GOAL IS EXPECTED TO BE ACHIEVED SHOULD BE STATED, IT GIVES A SENSE OF
URGENCY INTO GOAL ATTAINMENT AND ACT AS A MOTIVATOR.
Mahmood Qasim

19. FORMULATING STRATEGY
STRATEGY FORMULATION ANALYSIS OF AN ORGANIZATION’S CURRENT SITUATION FOLLOWED BY THE
DEVELOPMENT OF STRATEGIES TO ACCOMPLISH ITS MISSION AND ACHIEVE ITS GOALS
Mahmood Qasim

20. PLANNING AND STRATEGY
FORMULATION
SWOT Analysis
A planning exercise to
identify strengths and
weaknesses inside an
organization and
opportunities and threats
in the environment
Corporate-Level Strategy
A plan of action to manage the growth and
development of an organization so as to maximize
its long-run ability to create value
Business-Level Strategy
A plan of action to take advantage of favorable
opportunities and find ways to counter threats so as
to compete effectively in an industry
Functional-Level Strategy
A plan of action to improve the ability of an
organization’s department to create value
Mahmood Qasim

21. FORMULATING CORPORATE-
LEVEL STRATEGIES• CONCENTRATION ON A SINGLE BUSINESS
• DIVERSIFICATION
• RELATED DIVERSIFICATION
• UNRELATED DIVERSIFICATION
• INTERNATIONAL EXPANSION
• VERTICAL INTEGRATION
• BACKWARD
• FORWARD
Mahmood Qasim

22. FORMULATING BUSINESS-LEVEL
STRATEGIES
•LOW-COST STRATEGY
• FOCUSED LOW-COST
•DIFFERENTIATION STRATEGY
• FOCUSED DIFFERENTIATION
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23. FORMULATING FUNCTIONAL-
LEVEL STRATEGIES
• DEPARTMENTAL MANAGERS CAN LOWER THE COSTS OF CREATING VALUE SO THAT AN ORGANIZATION CAN
ATTRACT CUSTOMERS BY KEEPING ITS PRICES LOWER THAN ITS COMPETITORS’ PRICES
• DEPARTMENTAL MANAGERS CAN ADD VALUE TO A PRODUCT BY FINDING WAYSTO DIFFERENTIATE IT
FROM THE PRODUCT OF OTHER COMPANIES
Mahmood Qasim

24. PLANNING AND IMPLEMENTING
STRATEGIES
1. ALLOCATING RESPONSIBILITY FOR IMPLEMENTATION TO THE APPROPRIATE INDIVIDUALS OR GROUPS
2. DRAFTING DETAILED ACTION PLANS THAT SPECIFY HOW A STRATEGY IS TO BE IMPLEMENTED
3. ESTABLISHING A TIMETABLE FOR IMPLEMENTATION THAT INCLUDES PRECISE, MEASURABLE GOAL
LINKED TO THE ATTAINMENT OF THE ACTION PLAN
4. ALLOCATING APPROPRIATE RESOURCES TO THE RESPONSIBLE INDIVIDUALS OR GROUPS
5. HOLDING SPECIFIC INDIVIDUALS OR GROUPS RESPONSIBLE FOR THE ATTAINMENT OF CORPORATE,
DIVISIONAL, AND FUNCTIONAL GOALS
Mahmood Qasim

25. TIPS FOR NEW MANAGERS
1. PERIODICALLY DEFINE AN ORGANIZATION’S BUSINESS TO DETERMINE HOW WELL IT IS ACHIEVING ITS MISSION. USE THIS
PLANNING EXERCISE TO DETERMINE ITS FUTURE GOALS
2. MAKE SWOT ANALYSIS AN INTEGRAL PART OF THE PLANNING PROCESS
3. ALWAYS BE ALERT FOR OPPORTUNITIES TO INCREASE THE VALUE OF AN ORGANIZATION’S GOODS AND SERVICES SO IT
CAN BETTER SERVE ITS CUSTOMERS’ NEEDS
4. ENSURE THAT FUNCTIONAL MANAGERS FOCUSON FINDING NEW WAYS IN WHICH TO LOWER THE COSTS OF VALUE TO
PRODUCTS SO THAT AN ORGANIZATION CAN PURSUE BOTH A LOW-COST STRATEGY AND A DIFFERENTIATION STRATEGY
5. CAREFULLY ASSESS THE COSTS AND BENEFITS ASSOCIATED WITH USING A CORPORATE-LEVEL STRATEGY AND ONLY
ENTER A NEW BUSINESS WHEN IT CAN CLEARLY DEMONSTRATE THAT IT WILL INCREASE THE VALUE OF YOUR PRODUCTS

26. THANK YOU
Mahmood Qasim