Planning

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Planning
We must plan for the future, because people who stay in the present will remain in the past
Abraham Lincoln

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What is Planning?
Henry Mintzberg :

Planning is future thinking; Planning is controlling the future; Planning is decision making;

Common definitions:

Planning is the process by which an individual or organization decides in advance on some future course of action(Omran, 2002).

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The process of setting objectives and determining how

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Look at the statements on planning

A good plan today is better than a perfect plan tomorrow.

George S. Patton

The best way to prepare for the future is to create it.

PETER Drucker
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What Is Planning?
A primary functional managerial activity involving:

Defining the organizations goals Establishing an overall strategy for achieving those goals

Developing a comprehensive set of plans

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Why Do Managers Plan?

Purposes of Planning
1.

Provides direction Reduces uncertainty Minimizes waste and redundancy Sets the standards for controlling

2.

3.

4.

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Sets Standards to Facilitate Control

Provides Direction

Reasons for Planning

Minimizes Waste and Redundancy
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Reduces the Impact of Change

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Plans - foundation of Management

What kind Of organizational Structure to have Which helps us know What kind of people We need and why Which affects the kind of Leadership we have and direction How effectively lead people In order to ensure success of plan Standards Of control

Plans How to achieve them

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The relationship between Planning and performance

Formal planning is associated with:

Higher profits and returns of assets. Positive financial results. The quality of planning and implementation affects performance. The external environment can reduce the impact of planning on performance,
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Formal planning must be used for 99

How Do Managers Plan?

Elements of Planning

Goals (also objectives)

Desired outcomes for individuals, groups, or entire organizations

Provide direction and performance evaluation criteria

Plans

Documents that outline how goals are to be accomplished

Describe how resources are to be allocated and

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Types of goals
Financial goals

Are related to the expected internal financial performance of the organisation. Are related to the performance of the firm relative to factors in its external environment (e.g., competitors).
1111 Broadly-worded official statements of

Strategic goals

Stated goals versus real goals

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Approaches to Establishing Goals

Traditional Goal Setting

Broad goals are set at the top of the organization Goals are broken into sub-goals for each level Goals are intended to direct, guide, and constrain from above

Goals lose clarity and focus as lowerlevel managers attempt to interpret and define the goals for their areas of 3/17/12 1212 responsibility.

Traditional Objective Setting

We need to improve compa s the ny performance .

I want to significant see a in this improvement s division profits .

D t worry quality; about just work o fast. n

T o Manageme s p nt Objecti ve Divisi Managon s er Objectiv Departme e nt Manag s er Objectiv Individ e ual Employ s ee Objectiv e

Increase regardless of the profits means.

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Characteristics of Well-Designed Goals

Outcomes rather than actions Measurable and quantifiable Clear time frame Challenging yet attainable Written down

Communicated to all organizational

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members

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Steps in planning
1. 2. 3. 4.

Being Aware of Opportunity Establishing Objectives Considering the Planning Premises Determining & Identifying the Alternative Courses Evaluating these Alternative Courses Selecting the Appropriate Course of Action Developing Plans to Pursue the 3/17/12 1515 Chosen Alternative

5. 6.

7.

PLANNING PROCESS/STEPS IN PLANNING

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Types of Plans

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Types of Plans

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Types of plans..
Strategic plans

Apply to the entire organisation. Establish the organisations overall goals. Seek to position the organisation in terms of its environment. Cover extended periods of time. Specify the details of how the overall 3/17/12 1919

Operational plans

Types of plans.

Long-term plans Plans with time frames extending beyond three Years Short-term plans Plans with time frames on one year or less Specific plans Plans that are clearly defined and leave no room for interpretation
2020

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Types of plans

Single-use plan A one-time plan specifically designed to meet

the need of a unique situation. Standing plans Ongoing plans that provide guidance
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Types of Planning

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Levels and Types of Planning

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Levels of Planning at General Electric

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Where Should Planning Begin?

Planning efforts begin with the board of directors and top executives of the firm

Top-Down Planning

Planning is initiated at the lowest level in the organization

Bottom-Up Planning

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Advantages of Each Planning Approach

Top-Down Planning

Top managers, who are the most knowledgeable about the firm as a whole, drive the development of the plan. The people closest to the operating system, customers, and suppliers drive the development of the plan.
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Bottom-Up Planning

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Table 5.1 Top-Down

Top-Down and Bottom-Up Planning Bottom-Up

CEO, Board of Directors service, customer. Units develop goals and plans. As hierarchy, units determine actions and adjusted for accuracy and Begins specific and probably becomes cohesive and integrated as it moves up the hierarchy. Those closest to customers, suppliers, operating systems provide focus of

Organizational People/department closest to product, level Role of As the plan moves down the plans organizational move up the hierarchy, they are evaluated unit needed to support the plan. feasibility. Specificity fragmented; of plan Potential and advantages plans. Begins broad, becomes more specific as it moves down the hierarchy. Plans are driven by top-level managers who are most knowledgeable about all factors affecting the organization. Potential 3/17/12 Top-level managers may be

Lower-level managers may lack under-

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Major dimensions of plans

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Contemporary Issues in Planning

Criticisms of Planning

Planning may create rigidity Plans cannot be developed for dynamic environments Formal plans cannot replace intuition and creativity Planning focuses managers attention on todays competition, not tomorrows survival

Formal planning reinforces todays success, which may lead to tomorrows 2929 3/17/12 failure

Contemporary Issues in Planning Effective Planning in Dynamic Environments

Develop plans that are specific but flexible

Understand that planning is an ongoing process

Change plans when conditions warrant in planning eventually pays 3030

Persistence 3/17/12