1.

0 ORGANISATION

An organization is an entity such as institution or an association. That organization will have a
collective goal to reach and most likely it will be related to an external environment. We can meet a lot
of organization in Malaysia currently which stand from a business organization, welfare organization,
medical organization, financial organization and also others. They have their goal to reach while
conducting activities towards their goal and even had a link with external factors which will influence
them towards it.

As a business organization, their goal is to reach or make profit. While welfare organization has its aim
to reach the inner live of human being and create and demonstrate peace in a country or a place. Their
link to the outside will be their link towards selling their product to people or reach them towards
creating. An organization will stand differently according to their different goal.

Before we go further, we must clearly understand the origin of the word organization. The word
derived from the Greek word Organon or ergon which means organ. In the scientific term the organ
means a collective of tissues in a body which will form a organ and it will function as needed. In a human
body an organ is very important. So do the organization, which plays an important role towards the
success of a country in multi areas.

But we must too remember that even planning is important in an organization if they need to be
success.

2.0 PLANNING

There is no agreement or agreed term which can be used to explain among economists with regard to
the meaning of the term planning. Its because it can be explained according to the situation or places
where we are going to discuss the word planning. According to Prof. L. Robbins, planning is collective
control or suppression of private activities of production.

While for Hayek, the word planning means, the direction of productive activity by a central
authority. Dalton elaborates the planning as, Economic planning in the widest sense is the deliberate
direction by persons in charge of large resources of economic activity towards chosen end. Planning in
an organization is seems to be important because it can decide or determine the objectives which
should or could be achieved by an organization. The planning also can be best explained as a mutual
objective of the people in the organization towards reaches their goal.

Other than that, the planning also can be explained as a plan for the future. Its because by the
planning the organization will be ready to achieve something in future with implementing the process
now. The planning is a process to bring the organization a step forward in future.


3.0 TYPE OF PLANNING

Planning by Direction and Planning by Inducement:

Planning by direction is an integral part of a socialist society. It entails complete absence of laissez-
faire. There is one central authority which plans, directs, and orders the execution of the plan in
accordance with pre-determined targets and priorities. Such planning is comprehensive and
encompasses the entire economy.

Planning by inducement is democratic planning. It means planning by manipulating the market. There
is no compulsion but persuasion. There is freedom of enterprise, freedom of consumption and freedom
of production. But these freedoms are subject to state control and regulation. People are induced to act
in a certain way through various monetary and fiscal measures. Thus, planning by inducement is able to
achieve the same results as are likely to be achieved in planning by direction but with less sacrifice of
individual liberty.

Financial Planning and Physical Planning:

Financial planning refers to the technique of planning in which resources are allocated in terms of
money. Financial planning is essential in order to remove maladjustments between supplies and
demand and for calculating costs and benefits of the various projects. Thus, financial planning is thought
to secure a balance between demands and supplies, avoid inflation and bring about economic stability.

Physical planning refers to the allocation of resources in terms of men, materials and machinery. In
physical planning, an overall assessment is made of the available real resources such as raw materials,
manpower, etc., and how they have to be obtained so that bottlenecks may be eliminated during the
plan. Physical planning requires the fixation of physical targets with regard to agricultural and industrial
production, socio-cultural and transportation services, consumption levels and in respect of
employment, income and investment levels of the economy. Physical planning has to be viewed as an
overall long-term planning rather than a short-term piecemeal planning.

Perspective Planning and Annual Planning:

Perspective planning refers to long-term planning in which long range targets are set in advance for a
period of 15, 20, or 25 years. A perspective plan, however, does not imply one plan for the entire period
of 15 or 20 years. In reality, the broader objectives and targets are to be achieved within the specified
period of time by dividing the perspective plan into several short-period plans of 4, 5 or 6 years.

Not only this, a five year plan is further broken up into annual plans so that each annual plan fits into
the broad framework of the five-year plan. Plans of either kind are further divided into regional and
sector plans. Regional plans pertain to regions, districts and localities and sector plans pertain to plans
for agriculture, industry, foreign trade etc.

Indicative Planning and Imperative Planning:

This is the French system of planning which is based on the principle of decentralization in the
operation and execution of the national plans. This type of planning is not imperative but flexible. In
indicative planning the private sector is neither rigidly controlled nor directed to fulfill the targets and
priorities of the plan. Even then, the private sector is expected to fulfill the targets for the success of the
plan. The state provides all types of facilities to the private sector but does not direct it, rather indicates
the areas in which it can help in implementing the plan.

On the other hand, under imperative planning all economic activities and resources of the economy
operate under the direction of the state. There is complete control over the factors of production by the
state. The entire resources of the country are used to the maximum in order to fulfill the targets of the
plan. There is no consumers sovereignty in such planning. What and how much to produce such
decisions are taken by the managers of firms and factories on the direction of the planning commission
or a central planning authority? Since the government policies and decisions are rigid, they cannot be
changed easily.

Democratic Planning and Totalitarian Planning:

In totalitarian or authoritarian planning there is central control and direction of all economic activity
in accordance with a single plan. There is planning by direction where consumption, production,
exchange, and distribution are all controlled by the state. In totalitarian planning, the planning authority
is the supreme body. It decides about the targets, schemes, allocations, methods and procedures of
implementation of the plan. There is absolutely no opposition to the plan. People have to accept and
rigidly implement the plan.

In democratic planning, the philosophy of democratic government is accepted as the ideological basis.
People are associated at every step in the formulation and implementation of the plan. Cooperation of
different agencies, and voluntary groups, and associations plays a major role in the execution of the
plan. Democratic planning respects the institution of private property. Price mechanism is allowed to
play its due role. The government only seeks to influence economic and investment decisions in the
private sector through fiscal and monetary measures. The private sector operates side by side with the
public sector. Democratic planning aims at the removal of inequalities of income and wealth through
peaceful means by taxation and government spending on social welfare and social security schemes.
Individual freedom prevails and people enjoy social, economic and political freedoms.



Rolling and Fixed Plans:

In a rolling plan, every year three new plans are made and acted upon. First, there is a plan for the
current year which includes the annual budget and the foreign exchange budget. Second, there is a plan
for a number of years, say three, four or five. Third, a perspective plan for 10, 15 or 20 or even more
years is presented every year in which the broader goals are stated and the outlines of future
development are forecast. The annual one-year plan is fitted into the same years new three, four or five
year plan, and both are framed in the light of the perspective plan.

In contrast to the rolling plan, there is a fixed plan for four, five, six or seven years. A fixed plan lays
down definite aims and objectives which are required to be achieved during the plan period. For this
purpose, physical targets are fixed along with the total outlay. Physical targets and financial outlays are
seldom changed except under emergencies. Planning in India (Five-Year) and Russia (Seven-Year) is of
the fixed type.

Centralised and Decentralised Planning:

Under centralized planning, the entire planning process is under a central planning authority. The
authority formulates a central plan, fixes objectives, targets, and priorities for every sector of the
economy. The principle problems of the economy what and how much to produce, how and for whom
to be produced etc are decided by this authority. The entire planning process is based on bureaucratic
control and regulation. Naturally, such planning is rigid. There is no economic freedom and all economic
activities are directed from above.

On the other hand, decentralized planning refers to the execution of the plan from the grass roots.
Under it, a plan is formulated by the central planning authority in consultation with the different
administrative units of the country. The central plan incorporates plans under the central schemes, and
plans for the states under a federal set-up. The state plans incorporate district and village level plans.
Under decentralized planning, prices of goods and services are determined by the market mechanism
despite government control and regulation in certain fields of economic activity.

Traditional Material Requirements Planning (MRP)

In traditional SAP MRP system, sales order, planned independent requirements, reservations,
dependent requirements that are created by BOM explosion, and so on are planned directly as
requirements. The materials planning procedure will create procurement proposal only if these
requirements will result in shortage of material stocks at a certain time. There are no other
requirements that can trigger a procurement proposal. This procedure is used in PD-MRP MRP Type in
standard SAP R/3.

MRP is especially useful for the planning of finished products and important assemblies and
components (A materials).

Consumption Based Planning (CBP)

Consumption-based planning (CBP) is a materials planning procedure based on past consumption
values that determine future requirements by using forecast or other statistical procedures.

Originally, in CBP, planned independent requirements or dependent requirement will not be
considered in the net requirements calculation. Instead, it is triggered when stock levels fall below a
predefined reorder point or by forecast requirements calculated using past consumption values. So, all
the planned independent or dependent requirements in a certain period of time should have been
considered before (when set the reorder point or calculate the requirement forecast).

Consumption-based planning procedures are simple materials planning procedures which we can use
to achieve set targets with relatively little effort. Therefore, these planning procedures are used in areas
without in-house production and/or in production plants for planning both B- and C-parts and operating
supplies.

There are three procedures in Consumption Based Planning (CBP), which are:

o Reorder point planning

In reorder point planning, SAP checks whether the available stocks are below the reorder point that
has been set for the material. If they are, SAP will create procurement proposal. We can determine the
reorder point manually (VB-Manual reorder point planning MRP Type in standard SAP R/3) or, it can
also be calculated automatically using the material forecast (VM-Automatic reorder point planning
MRP Type in standard SAP R/3). The reorder point should cover the average material
requirement/consumption expected during the replenishment lead time (procurement processing time
+ planned delivery time + GR processing time). Besides the average consumption, we also should
consider safety stock. The safety stock exists to cover both excess material consumption within the
replenishment lead time and any additional requirements that may occur due to delivery delays.
Therefore, the safety stock is included in the reorder level.
The following values are important for defining the safety stock:
Past consumption values (historical data) or future requirements
Vendor/production delivery timelines
Service level to be achieved
Forecast error, that is, the deviation from the expected requirements

In standard SAP R/3 system, besides VB Manual Reorder Point and VM Automatic Reorder
Point MRP Type, there are also other MRP Types that have reorder point as its basis to calculate
requirement with additional procedure which count external requirement (sales order and manual
reservation) as a requirement. The MRP Type is: V1-Manual reorder point with external requirements
and V2-Automatic reorder point with external requirements.

o Forecast-based planning

In forecast-based planning, historical data is used in the material forecast to estimate future
requirements. These requirements are known as forecast requirements and are immediately available in
planning. The forecast, which calculates future requirements using historical data, is carried out at
regular intervals. This offers the advantage that requirements, which are automatically determined, are
continually adapted to suit current consumption needs. This procedure is used in VV-Forecast-based
planning MRP Type in standard SAP R/3.

o Time-phased materials planning

In time-phased planning, historical data is also used in the material forecast to estimate future
requirements. However, in this procedure, the planning run is only carried out according to predefined
intervals. If a vendor always delivers a material on a particular day of the week, it makes sense to plan
this material according to the same cycle, in which it is delivered. This procedure is used in R1-Time-
phased planning MRP Type in standard SAP R/3. Besides all procedures that have been explained
above, in SAP R/3 system we can create other procedures according to our own needs. We can do it
through configuration with SPRO T-code.

OPERATIONAL PLANNING

Operational planning is short range planning which deals with the day to day maintenance activities in
an organization. During the operational planning the planning will as short as a day to maintain the stock
or financial needs in an organization. The operational planning will be done at a unit or departmental
level. But, this plan is still considered as a part of the overall strategic planning.

For example:
Unit Director plans a meeting of staff nurses to reinforce knowledge gained from orientation of new
staff. Chief Nurse has set her own staff development plan for the whole division.

There are a few steps in preparing the operational planning for a unit or department. The steps are
important because planning is good. The steps are as follows:
1. Set our objectives
a. Objective is an important tool in setting a plan. A plan for an organization is set to be
with objectives so that there is a intention to reach it.
2. Set our priorities
a. Priorities is to be set if there are more than an objective in our planning. Its so none
of the objectives clashes and left unachieved.
3. State our assumption
a. The assumption in achieving the plan must be set.
4. Review limitations
a. There must be limitations. So we must check to know the limitations in achieving our
goal in organization so we can plan for prevention.
5. Develop a primary and backup plans
a. There must be a plan A and B so that we wont lose after a plan fail.
6. Implement the plan
a. The plan which is set to be must be implemented.
7. Set up the control system and follow up the progress result.
a. Progress must be observed so that we can improve in other plans.


INTERMEDIATE PLANNING

Intermediate planning is a planning which is usually done in the middle of a fiscal year. This mid year
plan will be ongoing plans to set up the new plan to rest of the year. And for entities this plans will be
focusing on the main issues about performance, resources and staff developments. And for some
institutions the intermediate plan will be an updated plan for the prior plan which is made in the
beginning of the year. If the beginning plans succeed then there will be an intermediate plan of new
settings and if fails it will be a plan to undergo a new idea to cover up the entity.

For example, if the there is a report of a weakness about a program is reported, then there must be a
intermediate plan to change the program or reinvent it to be a new program which will benefit the
company. But before doing the intermediate programs, there will be discussion to analyze the weakness
and problems faced. Based on the weakness, the new intermediate program will be drafted and
implemented. The intermediate programs also will be including few new faces to overcome the
problems.

Contingency planning

Contingency planning is a planning which will manage the problems that interfere with getting a work
which is planned to be done. This plan will be either reactive or proactive.

Example: If nurses who are working in an emergency unit suddenly fall in sick, the contingency plan
will be calling for a second nurse to replace her from other unit. This also can be called or named as plan
B. this plan will help the unit or company to complete their task without any problems or delay. This
plan should be ready anytime to overcome the uncertain situation which will happen in a place.




Strategic planning

Strategic planning is a defining and prioritizing a long term plans that includes examining the
organizations purpose, mission, philosophy and goals in the light of external environment. These plans
will eventually focuses on a 3 to 5 years operation of an organization. These plans also will generally
aims at creating an image of the desired future and design ways to make plans a reality.

The scopes of the strategic plans are as follow:

External assessment >opportunities and threats

Internal assessment >strengths and weaknesses

Priority issues and programs

Vision, mission, values, philosophy

Goals: >strategic organization >operational division, unit

Objectives - Strategies >timelines >plans

Policies and procedures

Implementation

Evaluation >production/operations


STEPS IN STRATEGIC PLANNING

Analyze the organizations internal and external environment (SWOT analysis)

Conduct a stakeholder assessment 3.Define the purpose of the organization 4.Clarify values
important to the organization 5.Set the goals and objectives

Communicate the goals and objectives to the constituents 7.Identify strategies set time
lines and tasks

Estimate and allocate resources

Develop and communicate a marketing or business plan

Establish a system for the implementation and monitoring of policies, procedures, and rules

Establish a system for exchanging information and building consensus

Provide a mechanism for evaluation


Tactical Planning

Tactical planning also considered an important plan for an institution or a business company.
Normally for a company it will hire a new company to draw their tactical plans. The company will have
their own objectives as a tool to bring the company achievement higher. So they will plan their tactical
plans to develop more strategies and achieve their drawn objectives. Tactical plans are actually the
specific actions and steps necessary to get top results.

Tactical plans are also called as short-term action plans. This is because this tactical plans breakdown
bigger goals and strategies into narrower, actionable tasks which enable the organization to take simple
actions and achieve their goals. The key to have a well-developed tactical plan is having specifically
stated actions. The actions should be assigned to particular employees with specific deadlines so that it
can be completed. The goals and strategies which were planned will give vision and the actions make
the company plans real.

Tactical plans should typically focus on a handful of core company goals; otherwise, employee
activities become too fragmented and it is hard for employees to understand how their activities
ultimately tie into goals.

For example: A Corporation instructed its clients to develop tactical plans with three to five strong
goals in mind.

"Increase sales by 20 percent within 12 months"

The above statement is an example of a specific and measurable goal. A strategy of training
employees on suggestion selling may help. A specific tactical planning is a plan which is requiring all
sales employees to recommend a certain add-on product to each customer buying "product Y."


Single Use and Standing Planning

All businesses or an organization must create plans. These plans are important for the organization
before making any decisions related to their internal operations, short-term projects or long-term
development and also financial growth.
There are several types of plans for a given business or organizations. The two of which includes
single-use plans and standing plans.

Single-Use Plans

A single-use plan in a business environment or an organization always refers to plans which developed
for a one-time project or event that has one specific goal or objective. The length of a single-use plan
differs greatly depending on the project. As a single event plan which might only last for one day or a
single project may last weeks or months. Single-use plans consist of budgets, programs and a description
of the employees who will be contributing to the single-use plan in question.

Example of a single use plans:

A company is deciding to have a Gala Dinner for its staffs together with annual meeting. The dinner and
the annual meeting only will last for one day and the main objective is to entertain the staffs.


Standing Plans

Standing plans are often policies, procedures and programs developed to ensure the internal operations
of a given business are operating smoothly. Standing plans are often developed once and then modified
to suit the business' needs as required.

Examples of standing plans include policies for employee interaction, procedures for reporting internal
issues in the company and regulations in terms of what is allowable and what is prohibited in the
business.


4.0 Conclusion

Planning is an important tool to organize a organization towards success. If there is a fail it means the
organization fails to plan. A perfect plan will help the organization to become a good and fortunate
organization in creating a high demand. A well plan organization is needed to run a good ethics in his
management.








5.0 Bibliography

1. Bloisi, Wendy, Management and Organisational Behaviour, 2007, 2
nd
European edition, McGraw
Hill

2. Deresky, Helen, Global Management, 2002, Prentice Hall


3. Gomez-Meija, Luis, Balkin, David, and Cardy, Robert, Management, 2005, 2
nd
edition, McGraw-
Hill Irwin

4. Jones, Gareth R. and George, Jennifer M., Contemporary Management, 2006, 4
th
edition,
McGraw-Hill Irwin

5. Kreitner, Robert, Management, 2004, 9
th
edition, Houghton Mifflin Company


6. Pearce/Robinson, Strategic Management, 2007, 10
th
edition, McGraw-Hill Irwin

7. Robbins, De Cenzo, Stuart-Kotze, Fundamentals of Management, 2002, 3
rd
edition, Pearson
Education Canada inc.

8. Robbins, Stephen and Coulter, Mary, Management, 2002, 7
th
edition, Prentice Hall


9. Russell and Taylor, Operations Management, 2006, 5
th
edition, John Wiley and Sans Inc.


10. Thompson, John and Martin, Frank, Strategic Management, 2005, 5
th
edition, Thomson