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Planning

CHAPTER 2

Planning defined

The process of outlining the activities that are necessary to

achieve the goals of the organization.

A plan

A blueprint for action that prescribes the activities necessary for

an organization to realize their goals.

Purpose of Planning

The purpose of planning is simple to ensure that the

organization is both effective and efficient in its activities.

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The Importance of Planning

The purpose of planning is simple to ensure that the

organization is both effective and efficient in its activities.

1. Helps to determine what are companys opportunities

2. Planning enables company to identify the course of action

3. Without planning much will be left out

4. Through plan, resources are efficiently and effectively

utilized, resulting in saving resources.

5. When we plan we know what are we really expected and

becoming more meaningful.

6. It helps to achieve goals and reduces overlapping activities

The Importance of Planning

7. Planning can provide effective utilization of available facilities.

8. Planning helps managers to become confident and aggressive

leader can cope with all the problems.

9. Planning guides management thinking to future desirable

activities and what must be done to attain goals.

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Goals and Controls

Goals

Provide a clear, engaging sense of direction and specify what is

to be accomplished

Control

Monitor the extent to which goals have been achieved and

ensure the organization is moving in the right direction.

Planning as a Linking Mechanism

GOALS

Provide a clear, engaging sense of

direction and specify what is to be

accomplished

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Planning as a Linking Mechanism

GOALS CONTROL

Provide a clear, engaging

sense of direction and

specify what is to be

accomplished.

Monitor the extent to

which goals have been

achieved and ensure the

organization is moving in

the right direction

Planning as a Linking Mechanism

GOALS CONTROL PLANS

Relationship among goals , plans and

controls

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Benefits of Planning

Better coordination

Focus on Forward Thinking

Participatory Work Environment

More Effective Control System

Where Should Planning Begin?

Planning efforts begin

with the board of

directors and top

executives of

the firm.

Top-Down Planning

Bottom-Up Planning

Planning is

initiated at the

lowest level in

the organization

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Advantages of Each Approach

Top-Down Planning

The advantage is that the top managers, who are the most

knowledgeable about the firm as a whole, drive the

development of the plan.

Bottom-Up Planning

The primary advantage is that the people closest to the

operating system, customers, and suppliers drive the

development of the plan.

Strategy/ Strategic Planning A comprehensive plan for accomplishing an organization

goals and objectives. [strategy]

Strategic planning is the process

by which an organization makes

decisions and takes actions that

affect its long-run performance.

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Strategy/ Strategic Planning

A strategic plan is the output of the strategic planning

process

Strategic plans define both the markets in which the firm

competes and the ways in which it competes in those

market.

The resulting comprehensive plan that provides overall

direction for the organization.

Level of Planning In general, most organization engage in both :

1. Strategic Planning

2. Operational Planning

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Planning in the Hierarchy of

Organizations

Top

Executives

Middle-Level

Managers

First-Level

Managers Operational

Planning

Strategic

Planning

The Purpose of Strategic Planning

To move the organization from

where it is to where it wants to

be.

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Levels of Strategic Planning : Planning

Focus

Corporate

What business should we

be in?

Business

How do we compete in

our existing lines of

business?

Functional

How do we implement

our corporate and business

strategies

Levels of Strategic Planning :

Participants

Corporate

Board of directors and top-

level executives

Business

Top-level executives and

managers within the

business unit

Functional

Mid-level managers and

lower-level managers

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Levels of Strategic Planning : Scope &

Time Horizons

Corporate

Broad strategies 5 to 10

year time horizon

Business

More specific strategies 1

to 5 year time horizon

Functional

Very specific strategies 1 to

2 year time horizon

Functional Strategic Planning

Functional strategy specifies activities necessary to

implement the organizations corporate and business

strategies

Operations

R&D

Financial

Human resource management

Marketing

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Mission Statements

A statement of an

organizational fundamental

purpose

Importance of Mission Statement

1. It sets the strategic direction of an organization

Why we are here and where are we going

2. It provide a foundation for the development of

business strategy

3. It determines how well it serves the

organizational stakeholders : individuals and

group directly affected by an organizational

and its accomplishment.

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Developing a Mission Statement

Concise and meaningful

It must describe the three primary aspect of an organization

1. Its primary product or services

2. Its primary targets markets

3. Overall strategy for ensuring long term success

It must become a natural part of the organization.

Embodied in the minds, habits, attitudes and decisions of

everyone in the company everyday.

Types of Organizational / Operational

Plan

Critical element in effective planning

Aim at achieving goals

Narrowly focused, have relative short term and involved

lower level manager

Two types of organizational plan :

1. Single-Use Plan

2. Standing Plans

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Types of Organizational / Operational

Plan

Single- Use Plan

It is develop to carry out a course of action not likely to

be repeated in the future. There are 3 types :

1. Program

2. Project

3. Budget

Types of Organizational / Operational

Plan

Single-Use plan

1. Program

Single-used plan for large set of activities

2. Project

Single-used plan for less scope and complexity than program.

May be part of broad program OR a self contained single-

used plan.

3. Budget

Statement of financial resources set aside for a specific

activities in a given period of time.

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Types of Organizational / Operational

Plan

Standing Plan

It is develop for activities that recur regularly over a

period of time. There are 3 types :

1. Policies

2. Standard operating procedure

3. Rules and Regulations

Types of Organizational / Operational

Plan

Standing Plan

1. Policies

Standing plan that specifies the organizations general response to a

designated problem OR situation

2. Standard operating procedure

Standing plan that outlines the steps to be followed in a

particular circumstances

3. Rules and regulations

Standing plan that describe exactly how activities are to be

carried out

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END OF CHAPTER 2

Write by : Nurfaizah Sahimi