Planning process ends with a plan

What Is Planning?
Planning
Managerial function that involves:

Defining the organizations goals

Establishing an overall strategy for achieving those
goals
Developing a comprehensive set of plans to integrate
and coordinate organizational work
Types of planning
Informal: not written down, short-term focus; specific
to an organizational unit
Formal: written, specific, and long-term focus,
involves shared goals for the organization

Purposes of Planning
Provides direction
Reduces uncertainty
Minimizes waste and redundancy
Sets the standards for controlling

Planning and Performance

The Relationship Between Planning and

Performance
Formal planning is associated with:
Higher profits
Other positive financial results

The quality of planning and implementation affects

performance more than the extent of planning

How Do Managers Plan?

Elements of Planning
Goals (also objectives)

Desired outcomes for individuals, groups, or entire

organizations
Provide direction and performance evaluation criteria

Plans

Documents that outline how goals are to be

accomplished
Describe how resources are to be allocated

Steps in Planning
1.
2.
3.
4:
5.
6.
7.
8.

Being Aware of Opportunities

Establishing Objectives or Goals
Developing Premises
Determining Alternative Courses
Evaluating Alternative Courses
Selecting a Course
Formulating Derivative Plans
Quantifying Plans by Budgeting

Types of Plans

Types of Plans
BREADTH
Strategic Plans
Apply to the entire organization
Establish the organizations overall goals
Cover extended periods of time

Operational Plans
Specify the details of how the overall goals are to

be achieved
Cover short time period

Types of Plans (contd)

TIME FRAME
Long-Term Plans
Time frames extending beyond three years

Short-Term Plans
Time frames of one year or less

SPECIFICITY
Specific Plans
Clearly defined

Directional Plans
Flexible plans that set out general guidelines,

provide focus, yet allow discretion in implementation

Types of Plans (contd)

FREQUENCY OF USE
Single-use Plan
A one-time plan specifically designed to meet
the needs of a unique situation
Standing Plans
Ongoing plans that provide guidance for

activities performed repeatedly

Types of Plans
Plans can be classified as
(1) mission or purposes,
(2) objectives or goals,
(3) strategies,
(4) policies,
(5) procedures,
(6) rules,
(7) programs, and
(8) budgets

Types of Plans
The mission, or purpose, identifies the basic

purpose or function or tasks of an enterprise or

agency or any part of it
Objectives, or goals, are the ends toward
which activity is aimed
Strategy is the determination of the basic
longterm objectives of an enterprise and the
adoption of courses of action and allocation of
resources necessary to achieve these goals
Policies are general statements or
understandings that guide or channel thinking
in decision making
Procedures are plans that establish a required
method of handling future activities

Types of Plans cont.

Rules spell out specific required actions or no

actions, allowing no discretion

Programs are a complex of goals, policies,
procedures, rules, task assignments, steps to be
taken, resources to be employed, and other
elements necessary to carry out a given course of
action
A budget is a statement of expected results
expressed in numerical terms