Planning

The process of determining where the organization wants to be in the future and then
selecting and implementing the most suitable set of actions (strategy) to achieve that state.
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All other functions stems from planning.

The most important and fundamental process of management.

Example Chang Yung Fa 1991

Planning to Launch new airlines EVA in south eastern Asia.
Competitors: Cathay Pacific and Singapore airlines
GOAL: The future and target state that an organization wants to achieve.
PLAN: The means pursuing goals.

STANDING PLAN: Ongoing plans that are used to provide guidance in management decisions
and activities that occur repeatedly.
Policy: A standing plan that provides broad-level set of guidelines for directing
managerial activities in pursuit of organizational goals. Example is; allowing managers to
purchase external software in order to achieve organizational goal.
Procedure: Standing plan encompassing the specific series of detailed steps to be
followed in situations that occur repeatedly. (Standard operating procedure)
Example: A fashion retailers procedure to make sale more visible by cutting the
prices down in order make a way for new merchandise.
RULE: A standing plan that provides in certain circumstances in which certain activities
can or cannot be performed.

Low Flexibility for managers

Rule is narrower than procedure because it is more specific

Example: Business magazines ads displayed 25 percent per page.

CONTINGENCY PLAN: Alternative course of actions to be followed if unforeseen or

unexpected environmental shifts occur.
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In the times of economic recession

Severe weather conditions
Less likely events to occur.

EXAMPLE: LADWP

PLANNING AND MANAGEMENT

Responsibility for Planning

1. Role of Planning Specialist

SHELL Petroleum contingency planning for 1991 gulf war.
2. Role of Planning Task Force
3. Role of Individual Manager
More effective planning by reducing barriers like
Adaptation to Complex Environment
Dominance of the Planning Specialist

MANAGEMENT BY OBJECTIVES (MBO)

The process in which managers and employees set mutually agreeable
goals, define responsibility for results and determines the means of evaluating individual
and group performance.
Schools universities and hospitals use this process.
4 cycle step
o Setting goals
o Planning Action (who what where and how)
o Implementing plans
o Reviewing performance (Obstacle removal, Modification of goals)

PLANNING TOOLS
FORECAST: the prediction about future events and conditions.
FORECASTING: the process of predicting or projecting the future environmental conditions or
events based on current data, experience and research. Forecasting can be done in following
areas:
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Marketing
Operations
Finance and Accounting
Human Resources
Information Resources
Research and Development

1. QUANTATIVE FORECASTING: A mathematical method analyzing historical data to

determine a pattern that can be projected in future.
a. Time series model
b. Causal model
2. QUALITATIVE FORECASTING: