PPT file, Planning function Introduction to Management

1. The planning function
@Introduction to management
Compiled by Mohammed J.
1/25/2023

2. Definition of planning
❯Planning – is the dynamic process of
making decisions today about future
actions; and it is a selection or choice
among alternatives as to:
 What missions or objectives be achieved
 What actions should be taken
 What organizational positions be assigned
 How the end can be achieved
 When to achieve it
 Who is to do it
 Where to do it
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3. Planning ……………
❯ Planning choosing a goal and developing a strategy to
achieve that goal
❯ Planning - is preparing today for tomorrow; it is the activity
that allows managers to determine what they want and how
to get it: they set goals and decide how to reach them.
❯ planning is a systematic way of deciding today about the
future and doing things in a purposeful manner.
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4. Nature of planning
 It is goal oriented.
 Primacy of planning.
 Pervasiveness/ universality of planning.
 Planning and information are deeply related.
 Planning is a continuous process.
 Planning is the means to an end.
 Plans are arranged in a hierarchy.
Corporate
plans
Departmental/d
ivisional plans
Unit plans
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5. Importance of planning
 It provides direction and sense of purpose
 It helps to reduce uncertainties.
 It provides basis for controlling
 It promotes efficiency (resource use)
 Developing managers (it is an intellectual
activity, systematic thinking)
 It provides guideline for decision making
(policies and rules for instance).
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6. Shortcomings of planning
 Planning is risky (uncertainties)
 It is a difficult and complicated task
 It is expensive and time consuming
 Affected by external factors (nature,
government policies,…)
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7. Components of planning
 A vision or strategic intent is a view of a future reality that
the organization seeks.
 Vision is a mental journey from known to theun known,
creating the future from a montage of current facts, hopes,
dreams, threats and opportunities.
 A vision is often expressed in a vision statement.
 A vision statement should answer the basic question, “What
do we want to become?”
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8. Components of planning………
Mission
❯ Mission is defined as “the fundamental purpose of the
organization & its scope of operation.”
❯ Organization mission is written in terms of the general set
of products & services the organization provides & the
markets & clients it serves.
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9. Components of planning………
❯ An organization’s mission statement is a concise introduction
to its work. It describes an organization in terms of its:
❯ Purpose: what the organization seeks to accomplish (WHY
DO WE EXIST?)
❯ Target Audience: the target group or beneficiaries of the
organization’s work (WHO DO WE SERVE?)
❯ Business: the main method or activity through which the
organization tries to fulfill this purpose (WHAT SERVICES DO
WE PROVIDE and HOW DO WE GO ABOUT PROVIDING
THEM?)
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10. Components of planning………
Objectives
❯ Objectives are the important ends of planning toward which
organizing, staffing, leading and controlling are aimed.
❯ Objectives are the important ends toward which organizational
and individual efforts or activities are directed.
❯ Objectives are essential starting points in planning because they
provide direction for all other managerial activities.
❯ While enterprise objectives are the basic plan of the firm;
department may also have its own objectives.
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11. Objectives…………….
 Points to consider Include:
 Quantification (if possible)
 Indicate how the mission can be achieved
 Represent specific planned levels of achievement
 Provide precise points or states to be achieved
 Allow review and appraisal of achievement
 Make clear:
 What is to be accomplished
 How much is to be accomplished
 By when it is to be accomplished
 By whom it is to be accomplished
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12. Setting objectives/Goals
❯ In short an objective should be Specific, Measurable, Achievable, Relevant and
Time bound (SMART)
❯ Specificity indicates clearly what needs to be achieved. Example: reduce
delay.
❯ Measurability indicates the possibility to determine if the desired condition is
fulfilled. Example: Reduce delays by 40% by the end of 2012.
❯ Achievability indicates a consensus and commitment to the objectives among
the major stakeholders
❯ Relevance indicates objectives need to be achievable. It answers feasibility,
the availability of authority of the managers and the means of realization.
❯ Time bound indicates a clear understanding of the time scales associated with
each objective as defined. It is difficult to have commitment without time
frame.
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13. Planning process
❯ Formal planning is a systematic process.
❯ The elements of a formal planning process provide a
general pattern of rational planning.
❯ They do not form a step-by-step procedure, yet the
sequence approximates behavior in a formal planning
environment.
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14. Planning process
 Establishing objective/setting organizational
goals. It has three steps.
 Assessing the present situation
 Anticipating future conditions
 Setting the objectives
 It is only after the managers have at least the
rudimentary knowledge about their capabilities and
available opportunities that objective setting does
make sense.
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15. Planning process
 Developing premises- investigating the company’s
environment
 Internal Environment
 External Environment
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16. Planning process…………..
 Determining alternative courses of action
 Roads(actions) to achieve the objective
 Try to create as many roads as possible
 Evaluating alternative courses of action
 This is a step in planning process that operations research and
mathematical as well as computing techniques have their primary
application to the field of management.
 Managers usually consider many alternatives for a given situation, but the
merits, demerits as well as the consequences of each alternative must be
examined before the choice is being made.
 Selecting a course of action
 A point of decision making
 The analysis of each alternative’s disadvantages, benefits, costs and
effects should result in determining one course of action that appears
better than the others.
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17. Planning process…………….
 Formulating derivative plans(supportive plan
 Numbering plan by Budgeting plans.
 Plans will have meaning when they are changed into numbers.
 Budgeting is the means of adding various plans together and set
important standards against which planning process can be
measured.
 Implementing the plan.
❯ This is a step where by the entire organization will be in motion or real
operation.
 what resource will be use
 who will be involved
 how the plan will be evaluated
 Controlling and evaluating the results (monitor progress)
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18. Types of plan
❯ Organizations can establish different types of plans.
Based on different diamentions
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19. Time dimetion
❯ Time dimension refers to the time periods for which
the planning is intended. Based on the length of time
a plan covers, we do have three types of plans:
❯ Long-range (five years or more),
❯ medium-range (between one and five years)
❯ short-range plans (one year or less)
❯ Of course, we should also remember that time frames
vary widely from industry to industry, because what
is considered to be long for one industry might be
intermediate of short for others.
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20. Scope/breadth dimension
❯ Plans in an organization may differ in their scope; accordingly,
organizations can have:
Strategic,
Tactical,
operational plans
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21. Strategic plan
❯ Strategic plans are the plans developed to achieve
strategic goals.
❯ More precisely, a strategic plan is a general plan
outlining decisions of resource allocation, priorities,
and action steps necessary to reach strategic goals.
❯ These plans are set by the board of directors and top
management, generally have an extended time horizon,
and address questions of scope, resource deployment,
competitive advantage, and synergy.
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22. Tactical plan
❯ A tactical plan, aimed at achieving tactical goals, is
developed to implement specific parts of a strategic plan.
❯ Tactical plans typically involve upper and middle
management and, compared with strategic plans, have a
somewhat shorter time horizon and a more specific and
concrete focus.
❯ Thus tactical plans are concerned more with actually
getting things done than with deciding what to do.
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23. Operational plan
❯ An operational plan focuses on carrying out tactical
plans to achieve operational goals.
❯ Developed by middle and lower-level managers,
operational plans have a short-term focus and are
relatively narrow in scope.
❯ Each one deals with a fairly small set of activities
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24. Use dimension
❯ This classification is based on their usage(how
repeatedly/frequently a given plan is used)
 Single use plans
❯ Are developed to achieve specific purposes and
dissolved when these have been accomplished.
❯ They are developed for relatively unique and non-
repetitive situation.
 Program
 Project
 Budget
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25. Standing plan……………
❯ A program is a complex set of objectives and plans to
achieve an important, one-time organizational goal
❯ A project is similar to a program, but generally smaller in
scope and complexity.
❯ A project may be a part of a broader program, or it may be a
self-contained single-use plan.
❯ Budgets are single-use plans that commit resources to
activities, projects, or programs.
❯ They are powerful tools that allocate scarce resources
among multiple and often competing uses.
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26. Standing plan
❯ Standing plans- are plans that provide an ongoing
guidance for performing recurring activates.
❯ It is formulated to be used again and again.
❯ Standing plans allow managers to save time.
❯ Standing plans become valuable under relatively
stable situations.
❯ E.g. a bank can more easily approve or reject loan
requests if criteria are established in advance to
evaluate credit ratings, collateral assets, and related
applicant information.
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27. Standing plans………
❯ TYPES OF STANDING PLANS
 Policies
 Procedures
 Rules
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28. Standing plan…….
❯ As a general guide for action, a policy is the most general
form of standing plan.
❯ A policy specifics the organization's general response to a
designated problem or situation.
❯ Procedures define a precise series of steps to be used in
achieving a specific job.
❯ The narrowest of the standing plans, rules and regulations,
describe exactly how specific activities are to be carried
out.
❯ Rather than guiding decision making, rules and regulations
actually take the place of decision making in various
situations.
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29. Characteristics of a good plan
❯ Objectivity
❯ Futurity
❯ Flexibility
❯ Stability
❯ Comprehensive
❯ Simplicity and clarity
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