chapter 4 - planning 1 (foundation of planning)
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CENTRE FOR FOUNDATION STUDIESFOUNDATION IN BUSINESS PROGRAMMEFBM 1101 FUNDAMENTAL OF BUSINESS
CHAPTER 4 PLANNING 1 FOUNDATION OFPLANNING
LECTURER : MR. KIRANPAL SINGH
Chapter 4 Planning 1 Foundation of PlanningDefinition of Planning
Planning is a management process of determining what an organization needs to do and how best to get it done.
The planning process :
Identifies the goals or objectives to be achieved.Formulates strategies to achieve them.Arranges or creates the means required.Implements, directs, and monitors all steps in their proper sequence.
Chapter 4 Planning 1 Foundation of PlanningTypes of Planning
Strategic Plans
Strategic plans reflect decisions about resource allocations, company priorities, and the steps needed to meet strategic goals. They are usually created by the firms top management team but often rely on input from others in the organization. The fundamental outcome of the strategic planning process is the creation of a strategic plan.
Chapter 4 Planning 1 Foundation of PlanningTypes of Planning
b) Tactical Plans
Tactical plans are shorter-term plans for implementing specific aspects of the companys strategic plans. That is, after a strategic plan has been created, managers then develop shorter-term plans to guide decisions so they are consistent with the strategic plan. They typically involve upper and middle management.
Chapter 4 Planning 1 Foundation of PlanningTypes of Planning
c) Operational Plans
Operational plans which are developed by mid-level and lower-level managers, set short-term targets for daily, weekly, or monthly performance.
Chapter 4 Planning 1 Foundation of PlanningPURPOSES OF PLANNING
Chapter 4 Planning 1 Foundation of PlanningPurposes of Planning
The planning done by managers is aimed at achieving the organizational goals set by the senior management.
The planning helps people in concentrating their efforts on the most important jobs rather than wasting time on the lesser important work.
The purpose of planning is also to minimize the cost of performance and eliminate unproductive efforts.
It also helps the management in adopting and adjusting according to the changes that take place in the environment.
Chapter 4 Planning 1 Foundation of PlanningPurposes of Planning
Planning also provides a basis for teamwork as when the goals are properly defined assignments can be fixed and all the members can start contributing in the achievement of these objectives.
Planning gives a sense of direction and ensured that efforts are being put to useful purpose instead of being wasted.
Planning also facilitate control because without planning there will be nothing to control.
Chapter 4 Planning 1 Foundation of PlanningTYPES OF PLANS
Chapter 4 Planning 1 Foundation of PlanningTypes of Plans
Singleuse plans
This applies to activities that do not recur or repeat. A onetime occurrence, such as a special sales program, is a singleuse plan because it deals with the who, what, where, how, and how much of an activity. A budget is also a singleuse plan because it predicts sources and amounts of income and how much they are used for a specific project.
Chapter 4 Planning 1 Foundation of PlanningTypes of Plans
Continuing or ongoing plans
These plans are usually made once and retain their value over a period of years while undergoing periodic revisions and updates.
The following are examples of ongoing plans:
A policy
It provides a broad guideline for managers to follow when dealing with important areas of decision making. Policies are general statements that explain how a manager should attempt to handle routine management responsibilities. Chapter 4 Planning 1 Foundation of PlanningTypes of Plans
A procedure
This is a set of stepbystep directions that explains how activities or tasks are to be carried out. Most organizations have procedures for purchasing supplies and equipment, for example. This procedure usually begins with a supervisor completing a purchasing requisition. The requisition is then sent to the next level of management for approval. The approved requisition is forwarded to the purchasing department.
By defining the steps to be taken and the order in which they are to be done, procedures provide a standardized way of responding to a repetitive problem.
Chapter 4 Planning 1 Foundation of PlanningTypes of Plans
A rule
This an explicit statement that tells an employee what he or she can and cannot do. Rules are do and don't statements put into place to promote the safety of employees and the uniform treatment and behavior of employees. For example, rules about tardiness and absenteeism permit supervisors to make discipline decisions rapidly and with a high degree of fairness.
Chapter 4 Planning 1 Foundation of PlanningTypes of Plans
Contingency plans
Intelligent and successful management depends upon a constant pursuit of adaptation, flexibility, and mastery of changing conditions. Strong management requires a keeping all options open approach at all times and that is where contingency planning comes in.
Contingency planning involves identifying alternative courses of action that can be implemented if and when the original plan proves inadequate because of changing circumstances.
Chapter 4 Planning 1 Foundation of PlanningTypes of Plans
Basically, we can also define types of plans as following :
Long term plans (time frame beyond three years)Short term plans (cover one year or less)Specific plans (clearly defined plans)Directional plans (flexible plans that set out general guidelines)
Chapter 4 Planning 1 Foundation of PlanningMANAGEMENT BY OBJECTIVE
Chapter 4 Planning 1 Foundation of PlanningManagement by Objectives (MBO)
This is a system which is designed to motivate and coordinate a workforce by dividing the organizations overall aim into specific targets for each division, department and individual.
If this process is undertaken after discussion and agreement with personnel at each level of the organization then it can be a very effective way of delegating authority and motivating staff.Chapter 4 Planning 1 Foundation of PlanningManagement by Objectives (MBO)
The possible benefits of MBO :
For the MBO system to be effective, targets and objectives should be agreed and discussed with the managers and staff at departmental and individual level. This form of staff involvement is a key feature of job enrichment and should help provide a motivating force.
Objectives act as a control device. By setting targets agreed with the people who have the authority to reach them, managers are able to monitor everyones performance and measure success or failure.
Chapter 4 Planning 1 Foundation of PlanningManagement by Objectives (MBO)
The possible benefits of MBO :
Each manager and subordinate will know exactly what they have to do. This will help them to prioritize their time. It will also enable them to see the importance of what they do to the whole organization.
By using the corporate aim and objectives as the key focus to all departmental and individual objectives, everyone should be working to the same overall target. This will avoid conflict and should ensure a consistent and well-coordinated approach.
Chapter 4 Planning 1 Foundation of PlanningManagement by Objectives (MBO)
The possible problems of MBO:
The process of dividing corporate objectives into divisional, departmental and individual targets can be very time consuming, especially as this is best performed only after full consultation with those most affected.
Objectives can become outdated very quickly and fixing targets and monitoring progress against them can be less than useful if the economic or competitive environment has changed completely.Chapter 4 Planning 1 Foundation of PlanningManagement by Objectives (MBO)
The possible problems of MBO:
Setting targets does not guarantee success as some managers might believe. Issues such as adequate resources and staff training must also be addressed if the original targets are to have any real meaning or are to act as true motivating goals.
Chapter 4 Planning 1 Foundation of PlanningCRITICISMS OF PLANNING
Chapter 4 Planning 1 Foundation of PlanningCriticisms of Planning
Planning may create rigidity changing business environment will require constant planning.
Plans cannot be developed for a dynamic environment flexibility is required in a dynamic business environment it cannot be tied to formal plan.
Chapter 4 Planning 1 Foundation of PlanningCriticisms of Planning
Planning focuses managers attention on todays competition and not on tomorrows survival plans usually concentrates on capitalizing on existing business opportunities.
Formal planning reinforces success, which may lead in failure success may breed failure in a uncertain environment.
Chapter 4 Planning 1 Foundation of PlanningEND OF CHAPTER 4PLANNING 1 FOUNDATION OF PLANNING