MISAMIS UNIVERSITY

OZAMIZ CITY

Graduate School
Master in Business Administration

SUBJECT: BA 261 Decision Making Theory and Analysis in

Management
Professor: DR. RUBEN M. BUBURAN,DBA,MBA,REA,REB,REC
Student: RICHILLE SORDILLA – PALAD

1st Semester 2019-2010

Handwritten Report

Topic: Managing the Planning Process

CHAPTER LEARNING OBJECTIVES:

 Understand how to take advantage of the benefits of planning at

various levels of the organization.
 Recognize major planning pitfalls and develop strategies for
avoiding them.
 Balance formal planning with opportunistic planning.
 Develop and overall planning model incorporating key planning
elements.
 Establish the planning objectives to drive the entire planning
process.
 Prepare the necessary action plan at strategic, tactical, and
operational levels.
 Learn how to implement a plan successful.

Planning

 is a future-oriented
 is a process that helps managers set objectives for the future
and map out the activities and means that will make it
possible to achieve those objectives.
Objectives

 are goals or targets that firm wishes to reach within as stated

amount of time.

Actions

 are the specific steps of the firm intends to take to achieve

the desired objectives.

Resource/s Allocation

 The planning step that determines where the resources will

come from and how the resources will be deployed to
achieve the agreed-on objectives.

Implementations Guidelines

 Show how the intended actions will be carried out.

The Purpose of Planning

 Identifying the factors that affect the organization

 Coordination efforts
 Establishment of priorities
 Assessment of external forces
 Understanding Circumstances Contributing to Past Success
or Failure
 Ensuring the availability of Adequate Resources
 Establishing Performance Standards
 Management Development

The Pitfalls of Planning

 Poor Assessment of Future Conditions

 Fostering Hierarchical Reporting Relationships
 Planning as a Self-Contained Activity
 Extensive Bureaucratization
 Inflexible Adherence to Objectives and Processes
 Approaches to Successful Planning

 Involving Different Organizational Levels

 Using Both Numerical and Judgmental Methods
 Viewing Planning as Continuous and Capable of Adapting to
Change
 Avoiding Paralysis of the Analysis
 Concentrating Planning on a Manageable Set of Issues

Formal Planning and Opportunistic Planning

Formal Planning-

 It is a system designed to:

 Identify Objectives; and to
 Structure the major tasks of the organization to accomplish
them

Opportunistic Planning-

 It is a type of planning that involves programmatic actions triggered

by unforeseen circumstances:

 It can coexist with formal planning and can help the formal plan
function more smoothly

Formal Planning Process Involves

Setting Objectives-

 Are the goals set for the end of planning cycle.

 Objectives should be specific and measurable.
 Objectives should specify a timetable or deadline for
accomplishment.

Charting a Course of Action-

 the next step in the planning process is to determine the actions

necessary for producing orderly results.

Implementation-

 involves defining tasks to be accomplished, assigning individual

responsibilities for those tasks, and managing individuals to ensure
that the tasks are appropriately completed.
 Three types of actions are normally Planned

Strategic Action Plans

 management plans based on macro approaches for analyzing

organizational features, resources, and the environment and
establishing long-term corporate wide action programs to
accomplished the stated objectives in light of that analysis.

Tactical Action Plans

 management action plans at the division or departmental level that

indicate what activities must be performed, when they must be
completed and what resources will be needed at the division or
departmental level to complete the portions of the strategic action
plan that fall under the purview of that particular organizational
subunit.

Division of Labor

 The production process in which each worker repeats one step

over and over, achieving in the use of time and knowledge, also,
the formal assignments of authority to job holders.

Strategic Plan Criteria

 Proactivity – The degree to which the strategic action plan takes a

long -term view of the future.

 Congruency- The extent to which the strategic action plan fits with
organization characteristics and the external environment.

 Synergy - The integration of the efforts of the various organizational

subunits to better accomplish corporate wide business objectives.

Budgeting

 Controlling and allocating the firm’s funds; variable

Variable Budgeting

 Allows for deviations between planned output and actual output by

considering the fact that variables costs depend on the level of
output, whereas fixed costs do not
Moving Budgeting

 Creates a tentative budget for a fixed period of time and then

revises and updates it on a periodic basis to take changes into
account.

Budgeting Functions:

 Informing- If most persons in the organization understand clearly the

strategic directions of the organization, constructive ideas for the use of
financial resources will result and unrealistic proposals should be reduced
to a minimum.

 Proposing- Standardized guides and forms should require information

that will make clear the contribution to strategic objectives of the activity
to be financed.

 Selecting - Each proposal must be weighed by comparing its strategic

value with its cost. The Budget committee should be able to explain in
tactical terms why each proposal is accepted or rejected.

 Monitoring- Proposal effectiveness should be evaluated periodically to

determine whether the projected contribution of the activity financed to
strategic objectives actually is realized.

 Proposal effectiveness should be evaluated periodically to

determine whether the projected contribution of the activity financed
to strategic objectives actually is realized.

 Proposal effectiveness should be evaluated periodically to

determine whether the projected contribution of the activity financed
to strategic objectives actually is realized.

OPERATIONAL ACTION PLANS

 Are normally created by line managers and employees directly

responsible for carrying out certain tasks or activities.

Typical Operating System

Control element-

is a device that directly controls the value of the manipulated variable of

a control loop.
Product/service element-

is the production of an essentially intangible benefit, either in its own right or as a

significant element of a tangible product, which through some form of
exchange, satisfies an identified need.

Resources element-

Transformation element-

Authority- is a formal power accorded to the position rather than the

person. As part of implementation, each position is vested with the
authority to make certain decisions and is held accountable for those
decisions.

Persuasion- while most firms rely on some of authority structure to

ensure employee compliance with planned actions, acceptability of the
plan is a necessary condition to ensure employee commitment.

Policy- Both formal authority and persuasion must operate within a

general institutional context that governs the relations and actions of
individuals responsible for implementing the plan.

Feedback Mechanism- successful plan implementation requires a

continuous flow of information that is used to determine to what extent the
plan is being carried out as expected and to assess how and why activities
are helping attain the o objectives

CHARACTERISTICS OF EFFECTIVE POLICIES:

Flexibility- A policy must strike a reasonable balance between stability and

technically. Condition change, and policies must change accordingly.

Comprehensiveness- If plans are to be followed, a policy must be

comprehensive enough to cover any contingency.

Coordination- A policy must provide for coordination of the various subunits

whose actions are interrelated.

Ethics- A policy must conform to society’s prevailing codes of ethical behavior.

Clarity- A policy must be a written clearly and logically

A Six Stage Approach to Facilitate Organizational Problem Solving

1. Identify performance gaps- a diagnosis begins with a manager and

his or her team defining the difference or shortfall between
objectives and achievements. This step must not become part of
such personnel decisions as merit pay, performance appraisal, and
promotion so as not to dampen people’s willingness to be self-
critical and openly share information.
2. 2.Identify tasks and work processes necessary for accomplishing
the plan.
3. Check for organizational congruence.
4. If any incongruences are found, intervene to create alignment in
order to effectively implement the plan.
5. Execute the plan.
6. Learn from the consequences.