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Planning

Planning is a basic function of management, is a

principal duty of all managers. It is a systematic

process and requires knowledgeable activity

based on sound managerial theory.

The first element of management is planning

(Fayol)

Planning improves experience, gives sequence inactivity, and protects a business against

undesirable changes.

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Planning facilitates wise use of resources andselection of the best approaches to achieving

objective (Fayol)

Planning is a continuous process, beginningwith the setting of goals and objectives and

then laying out a plan of action to accomplishthem, put them into play, review the processand the outcomes, provide feedback topersonnel, and modify as needed.

A mental process of decision making andforecasting

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Importance of Planning

1. It increases the chances of success by

focusing on results and not on activities

2. It forces analytic thinking and evaluation of

alternatives

3. It establishes a framework for decision

making that is consistent with top

management objectives.

4. It orients people to action rather thanreaction

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5. In includes day to day and future focused

managing.

6. It helps to avoid crisis management and

provides decision-making flexibility.

7. Provides a basis for managing

organizational and individual performance.

8. It increases employee involvement and

communication

9. It is cost-effective.

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Scope of Planning

1. TOP LEVEL MANAGEMENT these are people who dostrategic planning for 3 to 5 years. They are responsible for

the whole organization and need an awareness of externalinfluences.

2. MIDDLE-LEVEL MANAGEMENT do intermediateplanning for 6 months to 2 years. They are responsible for

integrating organizational and unit planning. They maydevelop and monitor tactics, develop and monitor controlplans, and develop and control evaluation plans.

3.LOWER-LEVEL MANAGEMENTdo operational planningof daily, weekly, and monthly activities that support theother plans. They assess, plan, implement, and evaluatecare. (Huber, 2006; Marquis, Huston, 2006)

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Types of PlanningSTRATEGIC PLANNING long range - extends 3 to 5

years into the future. It begins with in-depth analysisof the internal environments strengths andweaknesses and the external opportunities andthreats so that realistic goals can be set for thepreferred future. Are more generic and less specificthan operational planning. ( SWOT)

Strength : facilities, location, quality of service,qualification of staff

Weaknesses : scarcity of staff, financial situation, cashflow position

Opportunities : improve technology, populationgrowth, nurse recruitment

Threats: shortage of nurses, decrease patientsatisfaction, competition, loss of accreditation

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PURPOSE OF STR ATEGIC PLANNING

Clarifies beliefs and values

Values - is the worth, usefulness, or importance ofsomething. Core values do not change. A value statement isa planning tool. (Huber, 2006)

Give direction to the organization

Improved efficiency

Weed out poor or underused programs

Eliminate duplication of efforts

Concentrate resources on important services

Improve communications and coordination of activities

Provide a mind-expanding opportunity Allow adaptation to the changing environment

Set realistic and attainable yet challenging goals

Help ensure goal achievement

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Tactical Planning - planning in the middle

level management

OPERATIONAL PLANNING planning extends

to the operational units of any health care

agency; the processes involved are the same.

It is in the units that the work for whichnursing exists takes place. Planning should be

done on a daily, weekly, and long-term basis.

Daily planning is related to patient care andincludes history taking, assessment, and

nursing diagnosis and intervention.

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Principles of Planning

1. Purpose of the plan must be determined

2. Plans must be formulated on clearly defined dataand information

3. Plans of the various sections of the organizationmust be coordinated

4. Standards to be achieved by the plan must be setand performance monitored

5. Plans must be flexible

6. Full communication to all concerned in operating

the plans7. Plans must be seen to be achievable

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Characteristic of a Good Plan

1. Clearly worded objectives

2. Guided by policies or procedures affectingplanned action

3. Indicate priorities4. Develop actions that are flexible and realistic

5. Develop logical sequence of actions

6. Includes the most practical methods for achievingeach objectives.

Planning Process

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Planning Process

1. Establish mission and objectives

2.Collect Data analyze external environment

analyze internal environment

use existing data

methods of collecting data

questionnaire

interview

observation

3. Develop action plan4. Evaluate plan

implement and monitor and modify

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Advantages of Planning

1. Ensures progress

2. Adequate attention is paid to the futureover long period

3. Helps concentrate attention on the

organizations goals

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Barriers to Planning

1. Reluctance (not wanting to do) to establish

goals and objectives

2. Resistance to change

3. Difficult to predict the future 4. Time-consuming

5. Lack of top management support

6. Lack of information

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Elements of Planning

1. Forecasting

Fore casting To estimate or calculate inadvance (Webster)

Looks into the future including the

environment in which the plan will beexecuted

Who will be the client

Equipment Facilities

Supplies

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2. Setting Vision, Mission, Philosophy, Goals, Objectives

Vision - outlines the organizations future role andfunction

Gives the institution something to strive for Is a mental image or the power of imagination to see

something that is not actually visible

Mission - is a brief statement identifying the reason that

an organization exist and its future aim or function.This identifies the organizations constituency and

addresses its position regarding ethics, principlesand standards of practice.

Broad declaration of the basic, unique purposeand scope of operations that distinguishes theorganization from others of its type

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GOALS AND OBJECTIVES

state actions for achieving the mission and

philosophy.

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3. Develop programs and Set Time Frame

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4. Prepare budget

Budget a written plan for the allocation of

resources and a control for ensuring that

results comply with the plans

Budget help coordinate the effort of the

agency by determining what resources will be

used by whom, when and for what purpose

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ADVANTAGES OF BUDGETTING

Help fix accountability by assignment of responsibilityand authority

State goals for all units

Offer a standard of performance

Stress the continuous nature of the planning andcontrol process

Encourages managers to make a careful analysis ofoperations and to base decisions on carefulconsiderations

Hasty judgment is minimized

Weaknesses are reveals and corrected Waste minimized

Financial matters can be handled in order.

Balance and Coordination

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DISADVANTAGES OF BUDGETTING

Only those aspects that are easy to measure may

be considered Symptoms may be treated as causes

Budget may become an end itself instead of ameans to an end

Budgetary goals may supersede agency goals

Danger of over budgeting

Skill and experience are needed

Time consuming

Expensive

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Types of Budget

1. Operating budget overall plan identifying

expected revenues and expenses, both fixedand variable, for the forthcoming fiscal year.

2. Capital expenditure budget are related to

long-range planning. Includes expenditureson physical changes such as replacement orexpansion of the plan, major equipment, andinventories. These items are usually major

investments and reduce flexibility inbudgeting because it takes a long time torecover the costs.

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5. Cash budget are planned to make adequate

funds available as needed and to use any

extra funds profitably.6. Labor or personnel budget estimate the cost

of direct labor necessary to meet the

agencys objectives. They determine therecruitment, hiring, assignment, layoff, and

discharge of personnel.

7. Flexible budget shows the effect of changesin volume of business on expense items.

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Zero-Based Budget with this budgeting, no

program is taken for granted. Each program or

service must be justified each time funds arerequested. Managers decide what will be

done, what will not be done, and how much

of an activity will be implemented. A decision

package is prepared.

time consuming, although some business may be

very predictable over time.

The budgeting process starts from zero, and

everything must be justified by each new budget

cycle.

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Periodic Budget review managers should

review the budget at periodic intervals,

compare actual with projected performance

and make necessary changes.

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Supplementary Budget - an expenditure

statement introduced to provide funds to the

Government to meet new or additional

expenses in a fiscal year.

Moving Budget

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Standard Cost

- In modern cost accounting, the concept of recordinghistorical costs was taken further, by allocating thecompany's fixed costs over a given period of time tothe items produced during that period, and recordingthe result as the total cost of production. This allowedthe full cost of products that were not sold in the

period they were produced to be recorded in inventoryusing a variety of complex accounting methods, whichwas consistent with the principles of GAAP (GenerallyAccepted Accounting Principles). It also essentially

enabled managers to ignore the fixed costs, and look atthe results of each period in relation to the "standardcost" for any given product.

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This method tended to slightly distort theresulting unit cost, but in mass-production

industries that made one product line, and wherethe fixed costs were relatively low, the distortionwas very minor.

An important part of standard cost accounting is

a variance analysis, which breaks down thevariation between actual cost and standard costsinto various components (volume variation,material cost variation, labor cost variation, etc.)

so managers can understand why costs weredifferent from what was planned and takeappropriate action to correct the situation

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Budget Process

Establishment of operational goals and

policies for the entire agency Units of service, staffing pattern, salary and

non salary expenses and revenue are

forecasted so that preliminary rate setting canbe done

Operating, payroll, non salary, cash budget can

be incorporated into the master budget Financial feasibility of the master budget is

tested, final document is approved and

distributed to all involved parties