THE PLANNING PROCESS

Introduction

• Planning :
The management function that assesses the management
environment to set future objectives and map out the
activities necessary to achieve those objectives.
• Objectives :
The goals and targets that the firm wishes to accomplish
within a stated amount of time.
 Introduction (cont’d)

• The end result of any planning process is a series of

statements regarding objectives to be met along with
expected activities.

• Organization can not be successful unless control

systems are in place to ensure that objectives are being
attained and the resources are being used appropriately.
 Introduction (cont’d)

• Effective planning requires thorough understanding

of interrelated environmental and organizational
factors. These factors requires clues about :
1. Where the firm should be moving in the future.
2. The resources it has at its disposal.
3. Constraints it faces.
 Introduction (cont’d)

• The planning process is to be successful;

Company leaders must be flexible enough to:
1. Respond to changes in technology.
2. Competitors' reactions
3. Internal trends
4. Industry conditions
 Working as a manager

• If you are a top manager, planning emphasis should

be on broad objectives to guide the entire
organization and overall allocation of resources to
support accomplishment of objectives.
• If you are a middle manager, planning emphasis
should be on tactical plans that allow you to best
utilize people and resources under your control to
support the firm's general plan.
 Working as a manager (cont’d)

• If you are a first-line supervisor or a lower-level

manager, planning emphasis should be on drawing
specific action steps to complete assigned objectives
of your unit; including precise scheduling; concrete
tasks to be accomplished; budgeting; assigning
responsibilities to each subordinate.
 Managing The Planning Process

1. Identify the different elements of an effective plan

2. Analyze the advantages and disadvantages of planning,
and identify how planning pitfalls can be avoided
3. Distinguish between formal and informal planning
4. Recognize the features of well-designed objectives
5. Identify the various types of action plans that
managers can use to accomplish stated objectives
 Managing The Planning Process (cont’d)

1- Identify the different elements of an effective plan

• Objectives. Goals or targets to be accomplished.
• Actions. Specific steps needed to achieve the stated
objectives.
• Resource allocation. Necessary financial and human
resources to carry out the planned activities.
• Implementation guidelines. A description of how
intended actions will be executed.
 Managing The Planning Process (cont’d)

2- Analyze the advantages and disadvantages of planning,

and identify how planning pitfalls can be avoided
• Benefits of planning. These include assessing external forces,
developing a sense of direction, identifying the factors that
affect the organization, encouraging participation, coordinating
efforts, establishing priorities, focusing attention on different
time horizons, understanding circumstances contributing to past
success or failure, ensuring the availability of adequate
resources, establishing performance standards, supporting
organizational control systems, developing "what if" scenarios,
and management development.
 Managing The Planning Process (cont’d)

• Pitfalls of planning. These include poor forecasts of

future conditions, plans imposed from above, planning as
a self-contained activity, extensive bureaucratization, and
inflexible adherence to objectives and processes.
• Avoiding planning pitfalls. Managers can overcome
disadvantages of planning by 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, and concentrating on a manageable set of issues.
 Managing The Planning Process (cont’d)

3- Distinguish between formal and informal planning

• Formal planning. A well-defined set of objectives, action
plans, resource allocation
procedures, and implementation guidelines, usually in a
written document.
• Opportunistic planning. Programmatic actions to respond
to unforeseen circumstances.
 Managing The Planning Process (cont’d)

4- Recognize the features of well-designed objectives

• Cascading of objectives. In general, objectives are
broader at the top of the organization and become more
specific at lower organization levels.
• Specificity and measurability. By knowing what is
expected and how expectations will be measured, managers
and employees can focus on the most important actions,
thereby concentrating on achieving the best results.
 Managing The Planning Process (cont’d)

• Difficulty. Challenging yet achievable objectives

induce employees to work harder to use their full
potential.
• Milestones. Timetables and deadlines serve to
motivate individuals to try harder.
• Priorities. Ranking of objectives in order of
importance.
 Managing The Planning Process (cont’d)

5- Identify the various types of action plans that

managers can use to accomplish stated objectives.
• Strategic plans. The primary purpose is to link the action
plans of different organizational functions and units so that
they can help support the business strategy adopted by the
entire corporation.
 Managing The Planning Process (cont’d)

• Tactical plans. Divisions or department leaders must

decide what activities should be performed, when those
activities should be completed, and what resources to
allocate to accomplish them. This includes defining the
responsibilities of jobholders and controlling and
allocating resources through the budgeting process.
• Operational plans. Employees directly responsible for
carrying out activities should develop systems to
transform resources into products or services, including a
control component to ensure that quantity and quality of
inputs and outputs meet established criteria within budget
constraints.