PLANNING : AN INTRODUCTION

Selecting the best course of action in anticipation of future trends so that the desired result may be
achieved.
It must be stressed that the desired result takes first priority and the course of action chosen is the means
to realize the goal.
The process of determining objectives and selecting a future course of action to accomplish them.
It is considered as the most basic of all managerial functions.
PROVIDES SPECIFIC ANSWER TO SIX BASIC QUESTIONS IN REGARD TO ANY INTENDED
ACTIVITY:
o WHAT identifies the specific goals to be accomplished.
o WHEN answers questions of timing; each long-term goal may have a series of short-term
objectives that must be achieved before the long-term goal can be reached.
o WHERE concerns the place or places where the plan will be executed.
o WHO identifies the specific people who will perform specific tasks essential to plans
implementation.
o HOW involves specific actions to be taken to reach the goals.
o HOW MUCH is concerned with the expenditure of resources needed to reach the goals- both
short and long term.
WHEN PLANNING, MANAGERS SHOULD POSSESS THESE RESPONSIBILITIES:
o Construct, review and rewrite their organizations mission.
o Identify and analyze their opportunities.
o Establish the goals they wish to achieve.
o Identify, analyze and select the course/courses of action required to reach their goals.
o Determine the resources they will need to achieve their goals.
MAJOR ASPECTS OF PLANNING
o Contribution to purpose and objectives.
o Planning as the basic function.
o Planning is a major function of all managers.
WHY MANAGERS RESIST PLANNING?
o Managers have many functions.
o Managers prefer to act on many problems by providing instant feedback.
o Good planning is hardwork.
o Plan can be used to measure results.
o Planning often involves serious thinking and extensive paperwork.
o Planning takes time.
IMPORTANCE OF PLANNING
o It sets the stage for resource acquisition and the focus of energy for the entire organization. It
provides DIRECTION and a common sense of PURPOSE for the organization.
o Generate goals and sets the foundation for organizing of resources and activities to achieve the
goals.
o Organizations ability to adjust. Planning increases the possibility of survival in business by
minimizing the risks inherent in the future.
o Unified framework of plans. The result of the planning process should provide for a unified for
the accomplishment of the organizations purpose. Plans for each level from top to bottom should
fit into each other.
o Planning reduces Overlapping and wasteful activities.

o Planning promotes innovative ideas.

o Planning facilitates decision making.
o Planning establishes standards for controlling.
Relationship between Goals and Plans in the organizational Planning Process
Mission
Mission

Strategic

Strategic

Strategic as a Strategic
Top
Top Management
Management (Organization
(Organization
as a whole)
whole)
Goals
Plans
Goals
Plans

Tactical
Tactical
Middle
Division
functions)
Middle Management
Management (Major
(MajorTactical
Division and
and Tactical
functions)
Goals
Plans
Goals

Plans

Operationa
Operationa
Operationa
Operationa
Lower
Individuals)
Lower Management
Management (Department,
(Department,
Individuals)
l Goals
l Plans
l Goals

l Plans

CLASSES AND TYPES OF PLANS

Accrd to
NATURE AND SCOPE
I.

Strategic Plans

contain the answers to who, what, when, where how and how much for achieving strategic goals---longterm, companywide goals established by top management.
concerned with the entire organizations direction and purpose---how it intense to grow, compete and
meet its customers needsover the next few years
II.
Tactical Plans
develop by middle managers, this plan are more detailed, have shorter time frames, and narrower scopes
than a strategic plan; are accomplished within 1 year or less.
Concerned with:
1. What each of the major organizational
subsystems must do?
2. How they must do it?
3. When things must be done?
4. Where activities will be performed?
5. What resources are to be utilized?
6. Who will have the authority needed to perform each task?
Tactical Objectives
Short-term goals set by middle managers that must be achieved in order to reach top managements
strategic goals and the short- and long-term goals of middle managers.
Functional Area Plans
1. Marketing Plan
- considered as game plan or master plan of the company.

2. Production Plan
-plans the schedule of production activities with the aim of achieving production efficiency.
3. Financial Plan
- states the acquisition and use of financial resources
4. Human resource management Plan
-indicates human resource needs
III.

Operational Plans
the first-line managers tool for executing daily, weekly, and monthly activities
Operational Objectives
The specific results expected from first-level managers, work groups and individuals.
Key Differences
Strategic Plan

Tactical Plan

Operational Plan

Impact

Have
the
potential
to
dramatically
impact
both
positively and negatively the
fortunes and survival of the
organization

Can affect specific business but

generally not the fortunes of
survivability of the entire
organization

Interdependence

High interdependence; must

take into account the resources
and capabilities of the entire
organization and its external

Moderate
interdependence;
must take into account the
resources and capabilities of
several units within a business

Low interdependence; the plan

may be linked to higher level
tactical and strategic plans but
is less interdependence with
them

Time Horizon

Typically 3-5 years

Often focused on 1-2 years

in the future

Usually focused on the

next 12 months or less

Scope

Broadest; originating with

a focus on the entire
organization

Rarely broader than

strategic business unit

Narrowest;
usually
centered on departments or
smaller units of the
organization

Complexity

The most complex and

general because of the
different industries and
business

Somewhat complex but

more specific because of
the more limited domain of
application

The least complex because

they usually focus on small
homogenous units

Plans as to FREQUENCY OF USE

I.

Standing Plan
It is used again and again; specifies how to handle continuing or recurring activities such as hiring,
granting credit and maintaining equipment.
Types:

a. Policy - A broad guide for organizational members to follow them dealing with important and
recurring areas of decision making. They set limits and boundaries for decision makers.
b. Procedure-

A set of step-by-step directions for carrying out activities or tasks.

c. Rule An ongoing, specific guide for human behavior and conduct at work. Rules are usually
do or do not statements established to promote employee safety, ensure the uniform treatment of
employees, and regulate civil behavior.
II. Single Plans
It is developed to achieve specific purposes and to be dissolved when these have been accomplished.
Types:
a. Budget
a. formal quantitative statements of the resources allocated to specific programs or projects for a given
period.
b. use for predicting sources and amounts of income and how it is to be used.
c. aims to control the use of financial resources
b. Program
a. major undertaking that may take several years to complete
b. refer to larger activity units
c. typically involve several different departments or units of the organization
d. are composed of several different projects
c. Projects
a. smaller in scope and complexity than a program with a shorter time horizon.
b. often part of a larger program
Summary of Standing and Single Plans
Type

Definition

Standing Plans

A general statement that guides decision making.

1.

Policy

2.

Procedure

A series of related steps that are to be followed in an established order to

achieve a given purpose.
A statement that prescribes or prohibits action by specifying what a person
may or may not do in a specific situation.

3. Rule
Single-use Plans
1.

Budget

2.

Programs

3. Projects

A plan that deals with the future allocations and utilizations of various
resources to different activities over a given time.
A plan typically intended to accomplish a specific objective within a fixed
time.
A subset or component part of a specific program.

Plans as to TIME HORIZON

I.
II.

Short range- plans covering the span of less than one year.
Long range- plans covering a span of more than one year.

Strategic Management
- Art and science of formulating, implementing, and evaluating, cross-functional decisions that enable an
organization to achieve its objectives
Stages of Strategic Management
- The strategic management process attempts to organize quantitative and qualitative information under conditions
of uncertainty
1. Formulating
Developing a vision and mission statement, Identifying an organizations external opportunities and
threats
Determining internal strengths and weaknesses,
Establishing long-term objectives,
Generating alternative strategies
Choosing strategies to pursue.
2. Implementation
Establish annual objectives, devise policies, motivate employees, and allocate resources so formulated
strategies can be executed.
3. Evaluation
Final stage, includes 3 fundamental activities
i. Reviewing external and internal factors as bases for current strategies
ii. Measuring performance
iii. Taking corrective actions
A Comprehensive Strategic Management Model

Strategic Planning
- An organizations process of defining its strategy, or direction, and making decisions on allocating its resources to
pursue this strategy.
- The big picture of what your company is doing and where it is going
- Helps determine where your organization is going over the next year or more.
- Why is this important?
o Takes you outside the day-to-day activities of your organization or project and helps give you clarity
about what you actually want to achieve and how to go about achieving it rather than a plan of action for
day-to-day operations.
Strategic Planning Models
Goals-Based
Works with the agency vision, mission, and the agency goals to work toward achieving the mission
Issues-Based
Starts with examining issues that the organization is facing
Organic
Focus is primarily on vision and values
Scenario
- What could possibly happen in the future
Components of a Strategic Plan
Vision Developing a clear understanding of what is your preferred future
Mission Developing a sound statement about why you exist
Core Values and Beliefs Describes behaviors and ideas that are important to your organization
Strategic Issues
The issues that create a gap between the ideal and reality
Operational Plans
How are you going to achieve your vision?

Steps of a Strategic Plan

Where is your agency in its development RIGHT now?
Assess the Internal and External Environments
SWOT Analysis
Regardless of whether your organization is future planning for specific products, work,
personal or any other area, the SWOT analysis process is the same.

Step 1 In the here and now List all strengths that exist now. Then in turn, list all weaknesses
that exist now. Be realistic but avoid modesty!
Step 2 What might be List all opportunities that exist in the future. Opportunities are
potential future strengths. Then in turn, list all threats that exist in the future. Threats are
potential future weaknesses.
Step 3 Plan of action Review your SWOT matrix with a view to creating an action plan to
address each of the four areas.
Step 4 Develop Operational Plans, Monitor Actions, Evaluate Progress, and Revise the Plan!
Other Steps in Strategic Plan
Create a Vision
Define core beliefs and values of your agency
Identify your agencys mission
Identify critical strategic issues
Sometimes referred to as barriers
Develop goals and detailed action plans for each strategic issue
How can you maximize the forces in favor and minimize forces against?
Monitor Action Plans your agency has developed in response to the critical issues
Evaluate progress of
achieving the outcomes
Revise the plan as necessary
Tools and Approaches
SWOT analysis, which addresses internal strengths and weaknesses relative to the external opportunities
and threats;
PEST analysis, which covers the remote external environment elements such as political, economic,
social and technological (PESTLE adds legal/regulatory and ecological/environmental);

Scenario planning, which was originally used in the military and recently used by large corporations to
analyze future scenarios;
Porter five forces analysis, which addresses industry attractiveness and rivalry through the bargaining
power of buyers and suppliers and the threat of substitute products and new market entrants;
Growth-share matrix, which involves portfolio decisions about which businesses to retain or divest; and
Balanced Scorecards and strategy maps, which creates a systematic framework for measuring and
controlling strategy.
The Nine Steps to Success - The Balanced Scorecard Institute's framework for Strategic Planning and
Management.

Planning Process
1. Analyzing the environment

An organizations success is influenced by its external environment, the major forces outside the
organization that have the potential of significantly impacting on the likely success of products or
services.
Type of External Environment:

General, or mega or macro environment

Task or micro environment

Mega Environment- is the segment of the external environment that reflects the broad condition and
trends in the societies within an organization operates.
It consists of the following:
Technological environment
Demographic environment
Economic environment
Task Environment - is specific outside element with which
conducting its business.
It includes the following:
Customers and clients
Competitors

Legal-political environment
Socio-cultural element
International environment
organization interfaces in the courses of

Suppliers
Labor supply

2. Setting Objectives

This second element in the planning process which is setting objectives or desired outcomes for the
entire organization, a specific unit, or even an individual.

Objective or Goal - a future target or end that an organization wishes to achieve.

Consideration must be given the following:
1 Priorities and multiple objectives- very large number of options to consider
2 Measurement of objectives - who, what, by when, and to-what-degree
Major Benefits of Goals/Objectives
Goals can increase performance.
Facilitates the controlling function.
Helps clarify expectations.
Increase in motivation

Levels of Goals or Objectives:

1
2

Strategic Goals - broadly defined targets or future end results set by the top management.
Tactical Goals - are targets or future end results usually set by the middles management for specific
departments or units. They are stated in more measurable terms.
3 Operational Goals - are targets or future end results set by lower management that address specific,
measurable outcomes required from lower levels.
Components of Goals
Goal Content/Characteristics

Specific target a specific area for improvement.

Measurable quantify or at least suggest an indicator of progress.

Assignable specify who will do it.

Realistic state what results can realistically be achieved, given available resources.

Time-related specify when the result(s) can be achieved.

Challenging

Attainable- An achievable goal will usually answer the question How? How can the goal be
accomplished? How realistic is the goal based on other constraints?

Goal Commitment

Major factors affecting commitment:

Supervisory authority

Expectation of Success

Peer and group pressure

Incentives and reward

Public Display

Participation

Work Behavior
Four work behavior factors:

Direction- instructions

Persistence

Effort

Planning

Job Knowledge and Ability

are likely to affect an individuals work behavior and prospects for reaching goals
even here is strong commitment.
Knowledge of Results
feedback about progress toward goal is particularly important aspects of using
goals effectively in organization
Complexity of the Task
affect the degree to which goal directed work behaviours' influence performance.
Situational Constraints
constitutes another element that influences the impact of goals on performance.

Methods of Approaches to Establishing Objectives

1 Entrepreneurial Approach - objectives are set by, the entrepreneur / owner of the
enterprise.
2. The Consensual Method - objectives are set by the general consent of those concerned.
enterprise in setting objectives and conflict estimated by identifying common or
consensual goals. relating to or involving
3. Coalition Method objectives are established as a result of a continuous bargaining
between groups or coalition to ensure that their interests are represented. Alliance may be
temporary or a matter of convenience.

3. Determining Requirements

Usually addresses the question, what will it take to get from here to there? the
there is what you to become while the here requires an assessment or knowledge
of where the organization is today.

4. Assessing Resources
this assessment of the required resources and the resources available to the organization
or manager.
Questions that managers must ask when assessing:
Do we have needed human talent to meet the requirement?
Even if we have the needed talent, are they available? Can we take people of what they
are currently working on in order to put them on this new project?
If we dont have necessary talent, can we develop or acquire it within the needed time
frame?
Do we have the financial resources available? Can we get additional funding from the
debt or equity markets?
Do we have the required technology or can we gain access to it at a cost-effective price?

5. Developing Action Plan

Action Plan - are essentially the marching orders that everyone uses to accomplish the
established tasks.

Elements of an Effective Plan:

1 Sequence and timing most common tool is the Gannt Chart. For example, the manager
may be given monthly earning quotas to stay on track for the goal of increasing sales by
25 percent.
2

Accountability specialization of who is accountable for each action.

6. Implementing Plans
plans often fail in the implementation stage because of inadequate assessment of
resources both those required and available "What happens when we do?"
Implementation is the stage where all the planned activities are put into action.

monitor implementation - One way to do this is through requesting a

monthly progress report from department heads. Communicate with
your staff, Make adjustments, Seek expert advice

time adjustment
The participation and cooperation of subordinates is necessary for successful implementation
of plans. Established plans should be reviewed periodically so as to modify and change them
whenever necessary.

7. Monitor Outcomes

Monitoring is important to ensure that the project is implemented as per the schedule.

It is necessary to know:

Are the land-use activities being carried out as planned?

Are the effects as predicted?

Are the costs as predicted?

Have the assumptions on which the plan was based proved to be correct?

Are the goals still valid?

How far are the goals being achieved?

Making Planning Effective

Planning is done so that some desired results may be achieved. At times, however, failure
in planning occurs.
Planning may be made successful if the following are observed:
1 Recognizing the planning barriers
2 Using the aids to planning
The planning barriers consist of the following:
the managers inability to plan
improper planning process
lack of commitment to the planning process
improper information
focusing on the present at the expense of the future
too much reliance on the planning department
concentrating on only the controllable variables

Among the aids to planning that may be used are:

gathering as much information as possible
developing multiple sources of information
involving others in the planning process
Indications of Good Planning
Workers know how their jobs fit into the total pattern
Jobs are turned out on time
Good relationships with other departments.
Equipment is in good shape.
Materials are available.
Wastes are kept to minimum.
Machines doing their proper role.
People using their highest skills.
Indications of Poor Planning
Skilled workers doing unskilled work.
Men fumbling on jobs for which they are not trained.
Some men are overworked, others are underworked.
Some machines doing jobs which could be done by smaller ones.
Quarrelling, bickering, buck-passing and confusion may arise.
Wasted materials.
Delivery dates are no met.
Machines are idle.

Decision making

the study of identifying and choosing alternatives based on the values and preferences of
the decision maker. Decision-making is one of the central activities of management and is
a huge part of any process of implementation.
can be regarded as the cognitive process resulting in the selection of a belief or a course
of action among several alternative possibilities. Every decision-making process produces
a final choice that may or may not prompt action.
Using a step-by-step decision-making process helps us to make more deliberate,
thoughtful decisions by organizing relevant information and defining alternatives. This
approach enables us to better insure the chances of choosing the most satisfied alternative
possible.

Approaches to Decision Making

Avoiding
One decision-making option is to make no choice at all. There are several reasons
why the decision maker might do this:
There is insufficient information to make a reasoned choice between alternatives.
The potential negative consequences of selecting any alternative outweigh the
benefits of selecting one.
No pressing need for a choice exists and the status quo can continue without
harm.
The person considering the alternatives does not have the authority to make a
decision.
Problem Solving
Most decisions consists of problem-solving activities that end when a satisfactory
solution is reached. In psychology, problem solving refers to the desire to reach a
definite goal from a present condition. Problem solving requires problem
definition, information analysis and evaluation, and alternative selection.
Problem Seeking
On occasion, the process of problem solving brings the focus or scope of the
problem itself into question. It may be found to be poorly defined, of too large or

small a scope, or missing a key dimension. Decision makers must then step back
and reconsider the information and analysis they have brought to bear so far. We
can regard this activity as problem seeking because decision makers must return
to the starting point and respecify the issue or problem they want to address.

Decision Making Approaches - Which Approach Characterizes Your Individual Decision

Making?
The majority of the decisions we make, we make as individuals. In the quest for
making more effective decisions, it is appropriate to look at the approaches we
pursue in our individual decision making.
Since decision outcomes are not certain, to improve decision quality, it is
important to focus on how a decision is made.
Three decision making approaches to consider
1 Rational or Analytical approach - Exemplified by step by step decision making,
this approach defines success factors upfront, seeks information and logically
looks at how each alternative meets each success factor. Decision making is
planned, and choices are made under the premise desired solutions can be
achieved except for large unforeseeable or unknowable events. With this
approach, consequences of the final choice are taken into consideration.
2 Intuitive Decision Making Approach- Relying on emotions and feelings
characterizes this approach. Careful planning is not possible or not desired.
People will point to a "gut feeling" or "hunch" as the cause for a choice, reflecting
that explanation is not accessible through conscious thought.
3 Chance, or Luck Approach - In this approach a decision is made on impulse,
without thought. Flipping a coin or using a "decision wheel" would be
representative of employing this approach. It is sometimes considered a
dependent style because this approach can promote denial of responsibility.
SEVEN-STEP DECISION MAKING PROCESS
1. Identify a problem or opportunity
- to recognize a problem or to see opportunities that may be worthwhile
2. Gather information
- What is relevant and what is not relevant to the decision?
- What do you need to know before you can make a decision, or that will help you make
the right one?
3. Analyze the situation
-What alternative courses of action may be available to you?
- What different interpretations of the data may be possible?

4. Develop options
- Generate several possible options.
- Be creative and positive.
- Ask what if questions.
- How would you like your situation to be?
5. Evaluate alternatives
- Which alternative will best achieve your objectives?
6. Select a preferred alternative
- Explore the provisional preferred alternative for future possible adverse consequences.
- What problems might it create?
7. Act on the decision
- Put a plan in place to implement the decision.
- Have you allocated resources to implement?
-Is the decision accepted and supported by colleagues?

TRUST IN THE LORD WITH ALL YOUR HEART AND LEAN NOT ON YOUR OWN
UNDERSTANDING; IN ALL YOUR WAYS ACKNOWLEDGE HIM AND HE WILL MAKE
YOUR PATHS STRAIGHT
Proverbs 3:5-6