A.) Introduction: What is Planning?

Planning Process
There are two major types of organizational planning; long-range, or strategic, planning and short-range, or operational,
planning.
Strategic planning extends 3 to 5 years into the future. It begins with in-depth analysis of the internal environment’s strengths
and weaknesses and the external opportunities and threats so that realistic goals can be set for the preferred future. It
determines the direction of the organization, allocates resources, assigns responsibilities, and determines time frames.
Strategic planning goals are more generic and less specific that operational planning.
Nurse managers are more likely to be involved in the operational planning. Operational planning is done in conjunction with
budgeting, usually a few months before the new fiscal year. It develops the departmental maintenance and improvement
goals for the coming year.
Purpose of

Purpose of Strategic Planning

Strategic planning clarifies beliefs and values: What are the organization’s strengths and weaknesses? What are the potential
opportunities and threats? Where is the organization going? How is it going to get there? It gives direction to the
organization, improves efficiency, weeds out poor or underused programs, eliminates duplication of efforts, concentrates
resources on important services, improves communications and coordination of activities, provides a mind-expanding
opportunity, allows adaptation of the changing environment, sets realistic and attainable yet challenging goals, and helps
ensure goal achievement.
Leaders need vision that is realistic and feasible. Development of a strategic vision involves analysis of the agency’s
environment, capabilities, and resources; development and articulation of a conceptual image; clarification of values;
development of a mission statement; identification of goals and objectives; and identification of strategies for
reaching the goals.

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B.) Types of Planning

B.1: Strategic Planning

Strategic Planning in nursing is concerned with what nursing should be doing. Its purpose is to improve allocation of
scarce resources, including time and money, and to manage the agency for performance. Strategic planning provides
strategic forecasting from one year up to more than twenty years. It should involve top nurse managers and
representatives of all levels of nursing management and practice. It will include analysis of such factors as projected
technological advances, the internal and external environments, the nursing and health-care market and industry, the
economics of nursing and health care, availability of human and material resources, and judgments of top
management.

In today’s world, the strategic planning process is used to acquire and develop new health-care services and product
lines, including new nursing services and products. Strategic planning is also used to divest outdated services and
products. Both activities present moral and ethical dilemmas for the managers and practitioners of nursing. Strategic
planning can foster better goals, better corporate values, and better communication about corporate direction. It can
lead to changes in operating management and organization.

Strategic planning can produce better management strategy and analysis and can forecast and mute external threats.
Odiorne recommends the following process for crafting a strategic plan:
 a.) Identify the major problems of your organization, determining where you are headed and where you want to be.
This is “gap analysis,” a technique to examine markets, products, customers, employees, finances, technology, and
community relations. Cabinets or task forces from each area may be helpful in doing gap analysis and identifying major
problems.

b.) Examine outside influences that relate to the key problems of your organization. Focus on the few major issues.

c.) List the critical issues-those that affect the entire organization, have long-term impact, and are based on irrefutable
evidence rather than media hype.

d.) Rank the critical issues according to their importance to your organization and plan accordingly: “must do” and “to
do” important but not urgent.” Then divide them into “success producers” and “failure preventers.”

e.) Decide the critical issues to all organization managers.

f.) Include time in the budget.

B.2: Functional and Operational Planning

Operational management is the organization and directing of the delivery of nursing care. It includes such planning as
creating a budget, creating an effective organizational structure that encompasses a quality monitoring process, and directing
nurse leaders, an administrative staff, and new programs.
Nursing planning performed at a service or departmental level is referred to as functional planning. It generally relates to a
specialty service within a nursing division. For example, the staff development director would be included in development of
the strategic plan but would develop operational plans for staff development as a whole and for specific services or units.
Likewise the directore of a home-health-care agency would assist in developing the strategic plan for the company but would
develop agency mission, philosophy, goals objectives and operational plans. With decentralization, each nurse manager
would develop strategic plan for her or his unit to be integrated into the organization’s strategic plan.
Operational plans are everyday working management plans developed from both long-range objectives and the strategic
planning process and short-range or tactical plans. In development of operational objectives, new strategic objectives can
emerge or old ones can be modified or discarded. Strategic and tactical plans are made into operational plans and carried out
at all levels of nursing management, not just at the patient-care level.
B.3: Business Plans
Business plans are detailed descriptions of the process for ensuring the launching of a new product line, project, unit,
or service. Business plans meet many of the standards for strategic planning, as they are projected over an extended
time period of months or years. Their purpose is to provide sources of information for investors and decision makers
within the external to the organization, motivation, and measurement of performance. Business plans are the
blueprints for business ventures.

C.) Principles of Planning

Purpose of Planning
The following are some reasons for planning:
1.) Planning increases the chances of success by focusing on results, not on activities.
2.) It forces analytic thinking and evaluation of alternatives, therefore improving decisions.
3.) It establishes a framework for decision making that is consistent with top management objectives.
4.) It orients people to action instead of reaction.
5.) It includes day-to-day and future-focused managing.
6.) It helps to avoid crisis management and provides decision-making flexibility.
7.) It provides a basis for managing organizational and individual performance.
8.) It increases employee involvement and improves communication.
9.) I t is cost-effective.
Among the activities of planning that Douglass addresses are assessment by collection, classification, analysis, interpretation,
and translation of data; strategic planning; development of standards; identification of needs and priority setting management
by objectives; and formulation of policies, rules, regulations, methods, and procedures.
Donovan wrote that planning has several benefits, among which are satisfactory outcomes of decisions; improved functions
in emergencies; assurance of economy of time, space, and materials; and the highest use of personnel. She included decision
making, philosophies, and objectives as key elements in planning.
Characteristics of Planning
What is the nature of planning? What is so distinctive about it that requires a nurse to have the knowledge and skills requisite
to engage in planning? In an environment of changing technology; mounting costs, and multiple activities, a need exists for
professional nurses to plan. The forecasting of events and the laying out of a system of activities or actions for accomplishing
the work of nursing and of the organization are perquisites to success.
Koontz and Weihrich define planning as “selecting missions and objectives and the actions to achieve them; [planning]
requires decision making, that is, choosing future courses of action form among alternatives.” They viewed planning as an
elementary function of management. In planning, the nurse would avoid leaving events to chance; she or he would apply an
intellectual process to consciously determining the course of action to take in accomplishing work. Donovan stated that the
planning process must be deliberate and analytic to produce carefully detailed programs of action that will achieve
objectives.
The nurse manager plans effectively to create an environment in which nursing personnel will provide the nursing care
desired and needed by clients. In such an environment, clinical nurses will make decisions about the form or modality of
practice, and nurse managers will work with nursing personnel to establish and meet their personal objectives while meeting
the objectives of the organization. 8
According to Hodgetts, planning forces a firm to forecast the environment, gives direction in the form of objectives, provides
the basis for teamwork, and helps management to learn to live with ambiguity. It should be comprehensive, with professional
nurses carefully determining objectives and making detailed plans to accomplish them. All managers and representative
clinical nurses should provide input into strategic planning, and every unit should have a strategic plan.
Planning involves the collection, analysis, and organization of many kinds of data (the how) that will be used to determine
both the nursing care needs of patients and the management plans that will provide the resources and processes to meet those
needs.
The following are some of the kinds of data that will need to be collected and analyzed for planning purposes:
1.) Daily average patient census.
2.) Bed capacity and percentage of occupancy.
3.) Average length of stay.
4.) Number of births.
5.) Number of operations.
6.) Trends in patient populations.
7.) Trends in technology.
8.) Environmental analysis.

D.) Steps in Planning

The Process in Planning: Whythe and Blair (1995) identified the following steps in the strategic planning process (Figure
11.1):
1.) Planning the process
2.) Developing and/ or assessing the mission statement
3.) Conducting the external assessment
4.) Conducting the internal assessment
5.) Setting goals and objectives
6.) Formulating strategic options
7.) Selecting and developing strategies
8.) Developing the implementation plan

E.) Budgeting as Part of the Planning Process

A budget is a plan for the allocation of resources and a control for ensuring that results comply with the plan. Results are
expressed in quantitative terms. Although budgets are usually associated with financial statements, such as revenues and
expenses, they also may be nonfinancial statements covering output, materials, and equipment. Budgets help coordinate the
efforts of the agency by determining what resources will be used by whom, when, and for what purpose. They are frequently
prepared for each organizational unit and for each function within the unit.
Planning is done for a specific period, usually a fiscal year, but may be subdivided into monthly, quarterly, or semiannual
periods. The budgeting period is determined by the desired frequency of checks and should complete a normal cycle of
activity. Budget periods that coincide with other control devices-such as managerial reports, balance sheets, and profit-and-
loss statements-are helpful.
The extent to which accurate forecasts can be made must be considered. If the budget forecasts too far in advance, its
usefulness is diminished. On the other had, factors such as seasonal fluctuations make it impossible to predict long-range
needs from short budget periods. Managers therefore necessarily revise budgets as more information becomes available. Top
management and the board of directors also may prepare long-term budgets of 3, 5, or more years, but these are not used as
direct operating budgets.
Types of Budgets
E.1: Operating or Revenue-&-Expense Budget
The operating budget provides an overview of an agency’s functions by projecting the planned operation, usually for the
upcoming year. The operating table reveals an input-output analysis of expected revenues and expenses. Among the factors
that nurse managers might include in their operating budgets are personnel salaries, employee benefits, insurance, medical-
surgical supplies, office supplies, rent, heat, light, housing-keeping, laundry service, drugs and pharmaceuticals, repairs and
maintenance, depreciation, in-service education, travel to professional meetings, educational leaves, books, periodicals,
subscriptions, dues and membership fees, legal fees, and recreation, such a Christmas parties and retirement teas. 10
Both controllable and noncontrollable expenses are projected. The manager determines the number of personnel needed and
the level of skills required of each. Wage levels and quality of materials used are other controllable expenses. Indirect
expenses, such a rent, lighting, and depreciation of equipment, are noncontrollable. The noncontrollable expenses and the
probability of rises in the material prices of labor cost during the budgetary period demand that an operating budget include
some cushion funds to provide for changes beyond the agency’s control.
The operating budget deals primarily with salaries, supplies, and contractual services. Nonfinancial factors, such as
time, materials, and space can be translated into dollar values. Work hours, nurse-patient interaction hours, units of
materials, equipment hours, and floor space also can be assigned dollar values.

Tomey, A. 2000. “ Guide to Nursing Management and Leadership”, Elsevier Science (Singapore) PTE LTD, pp. 175-177

Swanshurg, R.C. and Swansburg R.J. 1999. “Introductory Management and Leadership for Nurses”. 2nd ed.
Massachusetts, Jones & Bartlett Publishers. pp. 73-86