PLANNING

PLANNING

How To Best Meet Your

Mission
We must plan for the
future,
because people who stay
in the present will remain
in the past.

WHAT IS PLANNING?
Planning
involves defining the organizations goals,
establishing an overall strategy, and developing
a comprehensive set of plans to integrate and
coordinate organizational work
informal planning - nothing is written down
little or no sharing of goals
general and lacking in continuity
formal planning - written
defines specific goals
specific action programs exist to achieve goals

WHY DO MANAGERS PLAN?

Planning is the primary management function that
establishes the basis for all other management
functions
Planning establishes coordinated effort
Planning reduces uncertainty
Planning reduces overlapping and wasteful activities
Planning establishes goals and standards used in
controlling

CHARACTERISTICS AND
NATURE OF PLANNING

Involves rational approach

It is a process
Primary function
It is an open Systems Approach
Planning is future oriented
Involves choice from alternatives
Planning occurs at all levels of Mgt.
It is flexible
Pervasive & Continuous

IMPORTANCE OF PLANNING

Attention on results
Reduces uncertainty and risk
Gives sense of direction
Innovation and creativity
Helps in coordination
Guides decision making
Basis of decentralization
Provides efficiency
Facilitates control

LIMITATIONS

Lack of accurate info

Time and cost
Inflexibility
Resistance to change
Environmental constraints
Inefficient planning

PLANNING IS PERVASIVELEVELS OF PLANNING

Corporation Level planning

Strategic Business Unit (SBU)
Level planning
Functional or Department
Level planning
Team or work group level
planning

OTHER PLANNING TYPES

Long term planning
Intermediate planning
Short term planning

PLANNING IN THE HIERARCHY OF

ORGANIZATIONS
Strategic
Planning

Top
Executives

Middle-Level
Managers

Operational
Planning

First-Level
Managers

ORGANIZATIONAL MISSION
The Mission states the organizations
values, aspirations, and reason for
existence.
The Mission Statement is the basis for all
following goals and plans.
Without a clear mission, goals and plans
may be developed haphazardly causing
the organization to fail.

Goals and Plans

Goals: specify future ends.
Desired future state.
Plans: specify the means to
future ends. The blueprint for
goal achievement specifies
the necessary resource
allocations, schedules, tasks

STRATEGIC GOALS AND PLANS

Strategic Goals pertain to the entire
organization (not specific divisions and
departments).
Strategic Plans define the action steps
the company will use to attain strategic
goals.

TACTICAL GOALS AND PLANS

Tactical Goals apply to middle
management and describe what major
subunits must do to to enable the
organization to meet its strategic goals.
Tactical Plans:
Help execute major Strategic Plans.
Cover a shorter period of time.

OPERATIONAL GOALS AND

PLANS
Operational Goals: the specific results
expected of small units, workgroups, and
individuals.
Operational Plans: developed at the
lower levels of an organization to specify
actions required to achieve operational
goals and to support tactical plans.

GOAL CHARACTERISTICS
Be specific and measurable
Quantitive Terms

Cover key result areas

Contribute most to company performance

Be challenging but realistic

Be for a defined time period.
Be linked to rewards.

TYPES OF PLANS
Types of Plans
Strategic plans - apply to the entire
organization
establish organizations overall goals
seek to position the organization in
terms of its environment
Operational plans - specify the
details of how the overall goals are to
be achieved
tend to cover short time periods

TYPES OF PLANS
Long-term plans - time frame beyond three years
definition of long term has changed with
increasingly uncertain organizational
environments
Short-term plans - cover one year or less
Specific plans - clearly defined with little room for
interpretation
required clarity and predictability often do not
exist
Directional plans - flexible plans that set out
general guidelines
provide focus without limiting courses of action

TYPES OF PLANS
Breadth

Frequency
Time Frame Specificity
of Use

Strategic Long term

OperationalShort term

Directional Single use

Specific
Standing

TYPES OF PLANS
Single-use plans - one-time plans specifically designed to
meet the needs of a unique situation
Standing plans - ongoing plans that provide guidance for
activities performed repeatedly
include policies, procedures, and rules

TYPES OF PLANS
Single-use plans are developed to
achieve objectives that are not likely to
be repeated in the future. Single-use
plans include programs, budgets and
projects.

Standing plans are used to provide

guidance for tasks performed
repeatedly within the organization. The
primary standing plans are
organizational policies, rules, and
procedures

OTHER TYPES OF PLANS

Long term & Short term

Formal & Informal Plans
Proactive & Reactive Plans
Strategic & Operational Plans

The Planning Process

Planning may be seen as the
identification and formulation of the
objectives of a business (Goal
Setting)
Determining Planning Premises
Analyzing the data (Identifying
Alternatives)
Evaluation & Selection
Implementation & Review

THE PLANNING PROCESS

Perceive the problem at hand
Establish what do you want to achieve
about it
Establish the planning premises
Find out what all can be done to achieve
your aim
Evaluate the various choices you have
Choose one appropriate plan and keep
alternative plans ready
Work out the finer points of the selected
plan
Establish which activities need to be done
and arrange them in a proper sequence

The Planning Process

GOAL SETTING
Identification and formulation of
objectives

Reactive
Planning

DEVELOPING PLANS
Choices between alternative plans

Revision
of goals
and
plans
IMPLEMENTATION
Execution of the plan

Successful Planning
Process
Everyone participates
Board and staff educated about
planning
Board and staff explore new ideas
Board takes advantages of
opportunities
Necessary resources available

Making Planning Effective

Linked to Long term objectives
Consistency
Everyone participates
Feasible
Flexible
Simple
Top Management Support

WHAT IS AN OBJECTIVE?
objective are goals, aims or purposes that
organisation wish over varying periods of
time

MANAGEMENT BY OBJECTIVES
(MBO)
A method whereby
managers and employees
define objectives for every
department, project, and
person and use them to
monitor subsequent
performance.

THE NATURE & PURPOSE OF

MBO
MBO is concerned with goal setting and
planning for individual managers and
their units.
The essence of MBO is a process of
joint goal setting between a
supervisor and a subordinate.
Managers work with their subordinates
to establish performance goals that are
consistent with higher organizational
objectives.

CHARACTERISTICS

Super-ordinate goals
Measurable objectives
Compatibility
Systematic
Continuity
KRAs

OBJECTIVES
To measure and judge performance
Relate individual performance to
organizations
To clarify job done and accomplishments
expected
Increase growth of employees
Enhance communication b/w superior
and subordinates
Basis of promotion and incentives
Drives motivation
Controlling technique

ESSENTIAL STEPS FOR MBO

Set Goals
The most difficult step.

Develop Action Plan

For both workgroups and individuals.

Review Progress/ Take corrective action

Periodic during the year.

Appraise Overall Performance.

Review Annual Goals.

Essential Steps for MBO

Set

Goals
The most difficult step.
Concrete
Specific target and timeframe
Assign responsibility

Develop

Action Plan
Course of action
For both workgroups and
individuals

Review

Progress
Periodicity?
Course corrections

Appraise

Overall Performance.
How are we doing?
Do we need to restate our goals?

ADVANTAGES

Improved planning
Team work
Effective self control
Objective appraisal
Motivation and morale

DISASVANTAGES

Goal setting problems

Time consuming
Increased paperwork
Pressure oriented
Undermining leadership
Participation problem
Inflexibility

MAKING MBO PROCESS

EFFECTIVE
If MBO is to be successful, it must
start at the top of the organization
Employees must be educated about
what MBO is and what their role in it will
be.
Managers must implement MBO in a
way that is consistent with overall
organizational goals.

 Managers tell their subordinates

what organizational and unit goals
and plans top management has
established.
Managers meet with their
subordinates on a one-to-one basis
to arrive at a set of goals for each
subordinate that both develop and
to which both are committed.
Goals are refined to be as verifiable as

 Goals must be written and very

clearly stated.
Managers must play the role of
counselors in the goal-setting and
planning meeting.
The meeting should specify the
resources that he subordinate will
need
Conducting periodic reviews