TOPIC 2: PLANNING

LEARNING OBJECTIVES
Define

planning and plans

Explain the importance of planning
Describe various types of plans
Differentiate between strategic plans and
operational plans
Describe common barriers to effective
planning and explain ways to reduce
these barriers.

DEFINITION
A Plan:

A blueprint for action. It prescribes the activities

necessary for the organization to realize its goals

Planning:

The process of setting goals and defining the

actions necessary to achieve those goals (Lewis,
2007)
The process begins with objectives, defined
strategies, policies and detailed plans in order to
achieve them

PURPOSE AND BENEFITS OF

PLANNING
Purpose:
To ensure that the organization is both effective and efficient in its activities
Benefits:
A Road Map
sense of direction
Better Coordination
Planning provides a much needed foundation for the coordination of a
broad range of organizational activities
Focus on Forward Thinking
Forces managers to think ahead and consider resource needs &
potential opportunities or threats that the organization may face in the
future
More Effective Control System
A plan provides a foundation for control of the processes and
progress of the company

IMPORTANCE OF PLANNING
1.
2.
3.
4.
5.

Helps to determine what are companys opportunities

Planning enables company to identify the course of
action
Without planning much will be left out
Through plan, resources are efficiently and effectively
utilized, resulting in saving resources
When we plan we know what are we really expected
and becoming more meaningful

IMPORTANCE OF PLANNING
1.
2.
3.

4.

It helps to achieve goals and reduces overlapping

activities
Planning can provide effective utilization of available
facilities
Planning helps managers to become confident and
aggressive leader and can cope with all the
problems.
Planning guides management thinking to future
desirable activities and what must be done to attain
goals.

TYPES OF PLANNING
Strategic

Planning

Focuses on enhancing the competitive position and

overall performance of the organization in the long
term
It defines the markets in which the organization
competes, what the customers in those markets
want, and how the organization will deliver products
and services to satisfy what customers want.
Purpose: To move the organization from where it is
to where it wants to be.

Levels of Strategic Planning

Time
Horizon

Focus

Specificity

Participants

Corporate
strategy

To develop a mix of
business units that meets
the companys long-term
growth and profitability
goals

Broad

Board of directors
Top-level executives

510 years

Business
strategy

To develop and maintain

a distinctive competitive
advantage that will ensure
long-term profitability

More specific
than the
corporate
strategy

Top-level executives
Managers within the
business unit

15 years

Functional
strategy

To develop action plans

that ensure that corporate
and business strategies
are implemented

Very specific

Middle-level managers 12 years

Lower-level managers

Source: Management, Challenges for Tomorrows Leaders, International

Student Edition, 2007, pp.108.

Operation Planning
The

process of determining the day-today activities that are necessary to

achieve the long-term goals of the
organization
Operational plans outline the tactical
activities that must occur to support the
ongoing operations of the organization.
Types: Single use plan and Standing
plan

Standing Plan
Standing

Plans are designed to deal with

organizational issues or problems that
recur frequently. Types of standing plan
includes:
Policies A guideline for decision making
within the organization
Procedures An instruction how to complete
recurring tasks
Rules provide detailed and specific
guidelines for actions

Single Use Plan

Single-use

plan are developed to

address a specific organizational
situation. They include:
Programs A single-use plan that governs a
comprehensive set of activities designed to
accomplish a particular set of goals
Projects Direct the efforts of individuals or
work groups towards the achievements of a
specific goal
Budget A plan that specifies how financial
resources should be allocated.

MISSION STATEMENT
A broad

declaration of an organizations
purpose identifies organizations
products and customers and
distinguishes the organization from its
competitors

MISSION STATEMENT (contd)

Developing
Define

Mission Statement

its business

Who are the customers?

What customers needs are being satisfied?
How are we satisfying customer needs?

Establish

a set of primary goals/objectives

Sense of direction or purpose for organization

Should be realistic and within a reasonable time
period

Barriers to Effective Planning

Demands

on the managers time

Ambiguous and uncertain operating
environments
Resistance to change

Overcoming the Barriers to

Planning
Involve

Input from all levels of a firm is essential for

successful planning.

Take

Employees in Decision Making

Advantage of a Diversity of Views

Diverse views lead to a broader assessment of

organizational problems and opportunities.

Encourage

Strategic Thinking

Effective strategic thinking can be developed

through training and practice.