PRINCIPLES OF

PLANNING
Lec # 5
By : Miss Hareem Siddiqui
 After studying the chapter, you will be enable to
understand..
Planning
Need and Purpose of Planning
Steps involved in planning process
Planning and organizational objectives
Management by Objectives

OBJECTIVES OF THIS
CHAPTER 2
Principles of Planning
 A process to determine about an organization:

Where to go?
How to reach there?
What to do to reach that target?

PLANNING 3
Principles of Planning
 A process that involves defining the organizations
goals, establishing overall strategy for achieving those
goals and developing a comprehensive set of plans to
integrate and coordinate organizational work.

DEFINING PLANNING 4
Principles of Planning
 The systematic development of action programs aimed
at reaching agreed-upon business objectives by the
process of analyzing, evaluating, and selecting among
the opportunities which are foreseen.

DEFINING PLANNING 5
Principles of Planning
 Planning involves:
Means (How work is to be done)
Ends (What is to be done)

It could be:
Formal
Informal

PLANNING 6
Principles of Planning
 Gives direction
Reduces uncertainty
Reduces overlapping and wasteful activities
Establishes goals or standards

PURPOSE OF PLANNING 7
Principles of Planning
 Makes managers future oriented.
Enhances decision coordination.
Emphasizes organizational objectives.
Ensures success
Helps in dealing with the risks and problems.

ADVANTAGES OF PLANNING 8
Principles of Planning
 If not managed correctly, planning can be
disadvantageous.

Overemphasized planning takes up too much time.

DISADVANTAGES OF
PLANNING 9
Principles of Planning
SIGNIFICANCE OF
PLANNING 10
Principles of Planning
 Planning Identifying and selecting
appropriate goals and
courses of action; one of the four principal
tasks of management.

Planning is both a goal-making and a

strategy-making process.

PLANNING AND STRATEGY 11

Principles of Planning
 Strategy A cluster of decisions about
what goals to pursue, what
actions to take, and how to use resources
to achieve goals.

PLANNING AND STRATEGY 12

Principles of Planning
STEPS IN PLANNING 13
Principles of Planning
 Corporate
Level

Business 1/ Business 2/
Division Division
Level Level

Functional Functional Functional

Level Level Level

LEVELS OF PLANNING 14
Principles of Planning
LEVELS OF PLANNING 15
Principles of Planning
 Breadth Strategic/ Corporate
Operational/ Business Level

Time Frame Long Term

Short Term

Frequency of Use Single Use

Standing

TYPES OF PLANS 16
Principles of Planning
 Top managements decisions pertaining to the
organizations mission, overall strategy, and
structure.

Corporate-level strategy A plan that

indicates in which industries
and national markets an organization intends
to compete.

CORPORATE LEVEL PLAN 17

Principles of Planning
 Divisional managers decisions pertaining to
divisions long term goals, overall strategy,
and structure.

Business-level strategy A plan that

indicates how a division
intends to compete against its rivals in an
industry.

BUSINESS LEVEL PLAN 18

Principles of Planning
 Functional managers decisions pertaining to
the goals that they propose to pursue to help
the division attain its business-level goals.

Functional-level strategy A plan of action

to improve the ability of each of an
organizations functions to perform its task-
specific activities in ways that add value to an
organizations goods and services.

FUNCTIONAL LEVEL PLAN 19

Principles of Planning
 The intended duration of a plan.

Long Terms Plans

Short Term Plans

TIME HORIZONS OF PLAN 20

Principles of Planning
 Single Use Plans
Standing Plans

FREQUENCY OF USE 21
Principles of Planning
STRATEGIC PLANNING
22
Principles of Planning
 Defining the Business

Who are our Customers?

What Customer needs are being satisfied?
How are we satisfying customers needs?

DETERMINING ORGANIZATIONS
MISSION AND GOALS 23
Principles of Planning
 Once the business is defined, managers must
establish a set of primary goals to which the
organization is committed.

Developing these goals gives the organization a

sense of direction or purpose.

In most organizations, articulating major goals

is the job of the CEO, although other managers
have input into the process.

DETERMINING ORGANIZATIONS
MISSION AND GOALS 24
Principles of Planning
 The development of a set of corporate,
business, and functional strategies that allow
an organization to accomplish its mission and
achieve its goals.

It begins with managers systematically

analyzing the factors or forces inside an
organization and outside in the global
environment that affect the organizations
ability to meet its goals now and in the future.

FORMULATING STRATEGY 25
Principles of Planning
 2 handy tools:

SWOT Analysis
5 Forces Model (Business Level Strategy)

FORMULATING STRATEGY 26
Principles of Planning
 Planning exercise in which managers identify
organizational:
Strengths (S)
Weaknesses (W)
Environmental opportunities (O)
Threats (T).

SWOT ANALYSIS 27
Principles of Planning
5 FORCES MODEL 28
Principles of Planning
 Concentration
Vertical Integration
Diversification
Expansion

FORMULATING CORPORATE
LEVEL STRATEGIES 29
Principles of Planning
 Low Cost
Differentiation
Focused

FORMULATING BUSINESS
LEVEL STRATEGY 30
Principles of Planning
 Strategy implementation is a five step
process:
1. Allocating responsibility for implementation to the
appropriate individuals or groups.
2. Drafting detailed action plans that specify how a strategy is
to be implemented.
3. Establishing a timetable for implementation that includes
precise, measurable goals linked to the attainment of the
action plan.
4. Allocating appropriate resources to the responsible
individuals or groups.
5. Holding specific individuals or groups responsible for the
attainment of corporate, divisional, and functional goals.

STRATEGY
IMPLEMENTATION 31
Principles of Planning