The Fundamentals of Planning in Management

PLANNING

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PLANNING DEFINED

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Defining the organization’s objectives or goals

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Establishing an overall strategy for achieving those goals

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Developing a comprehensive hierarchy of plans to

integrate and coordinate activities

Planning is concerned with ends (what is to be

done) as well as with means (how it is to be done).

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Planning is the first managerial function to be

performed. It is concerned with deciding in advance

what is to be done in future, when, where and by

whom it is to be done. It is a process of thinking

before doing.

•

“

Without the activities determined by planning, there

would be nothing to organize, no one to activate and

no need to control”.

George R. Terry

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Planning is a technical managerial function that enables

organizations to deal with the present and anticipate the

future.

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It is the first and fundamental function of management

because all other management functions are dependent

on it.

•

 Planning is deciding what is to be done, when it is to be

done, how it is to be done and who is to do it.

•

It is an orderly process that gives organizational

direction.

•

 Planning is the process of determining how the

organization can get where it wants to go

.

•

Planning is the process of determining exactly what the

organization will do to accomplish its objectives.

•

In more formal terms, planning has been defined as ‘the

systematic development of action programmes aimed at

reaching agreed objectives by the process of analyzing,

evaluating and selecting among the opportunities which

are foreseen.”

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Planning is a comprehensive term & involves choosing a

course of action from all available alternatives for

accomplishing the desired results which are economical

& certain.

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Planning sketches a complete mental picture of things

yet to happen in the enterprise through the process of

looking ahead.

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Planning is a rational, dynamic and integration process.

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Planning cannot be haphazard or improvised.

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It is never the result of chance or unconscious effort.

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Planning is a process involving conceptual & analytic

skills, critical thinking, decision making & problem

solving.

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Planning is selecting & relating facts & the making &

using of assumptions regarding the future in the

visualization & formulation or the proposed activities

believed necessary to achieve the desired results.

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Planning is a rational, conscious & deliberate effort.

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Planning is not a static process, it is dynamic & needs

continuous adaptation in the light of experience, constant

evaluation, review & follow up.

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Planning is a comprehensive & integrative process, not

confined to any one branch of knowledge.

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Planning is the conscious determination of a future

course of action to accomplish a defined objective.

•

Planning is inevitable at all levels of administration.

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It gives direction to the organization.

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 It improves efficiency

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It eliminates duplication of efforts.

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 It concentrates resources on important services.

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 It reduces guess work.

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It improves communication and coordination of activities

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1. It attempts to offset uncertainty by foreseeing the future

& bringing about preparedness for the happening in

future.

2. It focuses attention on the objectives or goals of the

organisation & their achievement.

3. It leads to economy in operation through the selection of

the best possible course of action.

4. It helps in controlling the activities by providing measures

against which performance can be evaluated.

5. It helps in coordinating the operations of an organization

since a well-considered plan embrace & unifies all

divisions in an organisation.

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1.

Focus on realizing the objectives set

2.

Intellectual process involving mental exercise

3.

Selective as it selects the best course of action

4.

Pervasive as all the levels of management plan

5.

Lays foundation of the successful actions of

management

6.

It is flexible

7.

It is Continuous

8.

Efficiency is measured by what it contributes to

the objectives.

OBJECTIVES OF PLANNING

1.

Helps in effective forecasting

2.

Provides certainty in the activities

3.

Establish coordination in the enterprise

4.

Provides economy in the management

5.

Helpful in the accomplishment of budgets

6.

Gives direction to all the activities of an

organization

PRINCIPLES OF PLANNING

1.

Planning must focus on purposes. It should always be

based upon clearly defined objective.

2.

Planning is a continuous & iterative process which

includes series of steps, so continuity & flexibility should

be maintained in planning cycle.

3.

Planning should be simple & there should be provision

for proper analysis & classification of actions.

4.

In planning, there should be a good harmony with

organization & environment.

5.

Planning is hierarchical in nature & must have

organizational identification.

6. Planning should be persuasive activity covering the

entire organization with all its departments, sectors &

different levels of administration, and it should be

balanced.

7. Planning must be precise in its objective, scope and

nature. It should be realistic in its scope & pinpoint the

expected results.

8. In planning the provision should be made to use all

available resources.

9. Planning should always be documented so that all the

concerned are fully committed to the implementation of

the programme.

6 Ps in Planning

•

Purpose

•

Philosophy

•

Premise

•

Policies

•

Plans

•

Priorities

CHARACTERISTICS OF PLANNING

1.

Primacy: Precedes other elements or functions of

administration.

2.

Continuity: never ending activity. One plan begets

another plan.

3.

Flexibility

4.

Unity

5.

Precision

6.

Pervasiveness: responsibility of all members at different

levels of management.

MERITS AND DEMERITS OF PLANNING

Criticisms Of Formal Planning

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Planning may create rigidity.

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Plans can’t be developed for a dynamic

environment.

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Formal plans can’t replace intuition and

creativity.

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Planning focuses managers’ attention on

today’s competition, not on tomorrow’s

survival.

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Formal planning reinforces success, which may

lead to failure.

Planning and Performance

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Formal planning generally means higher

profits, higher return on assets, and other

positive financial results.

•

Planning process quality and implementation

probably contribute more to high

performance than does the extent of

planning.

•

When external environment restrictions

allowed managers few viable alternatives,

planning did not lead to higher performance.

Types of Plans

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PLANNING: FOCUS AND TIME

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Plans that are organization-wide, establish overall

objectives, and position an organization in terms

of its environment

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Plans that specify the details of how an

organization’s overall objectives are to be

achieved

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Plans that cover less than one year

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Plans that extend beyond five years

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Strategic plans

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Apply broadly to the entire organization

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Establish the organization’s overall objectives

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Seek to position the organization in terms of its

environment

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Provide direction to drive an organization’s efforts to

achieve its goals.

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Serve as the basis for the tactical plans.

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Cover extended periods of time

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Are less specific in their details

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Tactical plans (operational plans)

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Apply to specific parts of the organization.

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Are derived from strategic objectives

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Specify the details of how the overall objectives are to

be achieved.

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Cover shorter periods of time

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Must be updated continuously to meet current

challenges

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–

The process of developing a mission and long-

range objectives and determining in advance

how they will be accomplished.

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The process of setting short-range objectives

and determining in advance how they will be

accomplished.

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A plan for pursuing the mission and achieving

objectives.

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Plans that have clearly defined objectives and leave

no room for misinterpretation

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“What, when, where, how much, and by whom”

(process-focus)

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Flexible plans that set out general guidelines

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“Go from here to there” (outcome-focus)

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A plan that is used to meet the needs of a particular

or unique situation

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Single-day sales advertisement

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A plan that is ongoing and provides guidance for

repeatedly performed actions in an organization

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Customer satisfaction policy

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Y

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Planning responsibilities are different for managers at

each organizational level.

Strategic planning

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Top-level managers, formulate long-term strategic

planning to reinforce the firm’s mission (the mission

clarifies organizational purpose)

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Strategic plans are specified for five years period or

more; but circumstances dictate the planning horizon.

Tactical planning

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Middle management is responsible for translating

strategies into shorter-term tactics.

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Tactical plans are often specified in one-year increments.

Eg. annual budget.

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Translating strategic plans into measurable tactical

objectives is important because most strategic objective

is rather vague.

Operational planning

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Operational planning is accomplished by fist-line

managers.

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 Operational planning is most concerned with budgets,

quotas and schedules.

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 These are refinements of tactical objectives in which

work is defined and results are measured in small

increments.

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Time horizon for operational planning is very short.

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 Most plans at this level reflect operational cycles.

Operational objectives are:

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Narrow in scope

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Short-lived

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Subject to sudden change.

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In order to fulfil her/his own job responsibilities and to

guide subordinates towards agency goals, the nurse

manager must spend scarce materials and human

resources wisely.

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 Since the nursing service operation in even a small

agency is immensely complicated, careful planning is

needed to avoid waste, confusion and error.

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Formal planning is a systematic process. It consists of

five guidelines. These guidelines provide a general

pattern of rational planning.

1

.

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It analyzes the Past, current and future forces that affect

the organization.

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Expectation of outside interests such as government

officials, insurance companies and consumers are

sought.

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 Expectations of inside interests such as nurses, doctors,

administrators and other staffs are collected.

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 Environment, demographic, resources, legal,

technological factors should also be considered.

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Every plan has the primary purpose of helping the

organization succeed through effective management.

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Success is defined as achieving organizational

objectives.

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These are performance targets, the end results that

managers seek to achieve.

3

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Involving a greater number of managers will result in

better plans and more wide spread acceptance of

objectives.

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A successful planning process will generate several

options for manages to consider.

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These options are alternative courses of action that can

achieve the same result.

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The task of management is to decide among them.

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Managers usually consider many alternatives for a given

situation, but a viable alternative suggests a proposed

course of action that is:

• 

Feasible

• 

Realistic

• 

Sufficient

5

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Planning requires clear and effective communication at

all levels before performance begins to mirror

expectations.

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 Objectives are written and plans are documented to give

employees direction.

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 Managers communicate plans into two categories:

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a continuous basis to achieve consistently repeated

objectives. Standing plans take the form of:

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Policies

- Procedures

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Rules

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to achieve unique objectives or objectives that are

seldom repeated. They are communicated through:

- Programs

-  

Budget

- Schedule

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1.

Awareness of opportunities and problems

a)

What business opportunities will arise in future

b)

What benefits will the organization get

c)

How to exploit these opportunities

2. Collecting and analyzing information

3. Determination of objectives

4. Assessment of environment

5. Premising and forecasting

6. Review of key factors

 7. Development of alternative plans

8. Evaluation of alternative plans

9. Selection of a suitable plan

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1.

Analysis & understanding of system

2.

Formulation of operational goals & objectives

3.

Establishment of planning premises

4.

Selection & formulation of operative plan for alternatives

5.

Securing participation

6.

Implementation

7.

Follow up to the proposed course of action

8.

Evaluation

9.

Reanalysis and new understanding of system.

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KINDS OF PLANNING

Organizational level        Focus               Time period

Corporate 

       Strategic

                 Long range

Divisional 

       Operational 

      Medium range

Functional 

       Tactic

      Short range

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•

Objectives

•

Policies

•

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•

Programme

•

Budget

B

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P

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S

•

Policies provide the framework within which the decision

makers are expected to operate while making decisions

related to an organization.

•

They are guide to the thinking and action of subordinates for

the purpose of achieving the objectives of the business

successfully.

N

A

T

U

R

E

O

F

P

O

L

I

C

Y

1.

Policy is an expression of intentions of top management.

2.

It serves as a guide to decision making in an organization.

3.

It should be planned after taking into consideration the long

range plans and needs of an organization.

4.

As policies live longer than the people therefore the policies

should be framed after serious thinking and participation of

the top executives.

5.

Policies take a concrete step when they are put in writing.

T

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S

1.

Better performance

2.

Helps in control

3.

Better industrial relations

4.

Helps in enhancing co-operation

5.

Consistency

S

T

R

A

T

E

G

Y

It refers to the firm’s overall plan for dealing with and existing in

the environment.

F

E

A

T

U

R

E

S

1.

It is a general program of action

2.

More concerned with external problems  rather than

internal

3.

It includes tactics used by the opponents

4.

They need to be changed as per the requirements

5.

Formulated only at the top level

T

Y

P

E

S

O

F

S

T

R

A

T

E

G

I

E

S

•

Strike while the iron is hot

•

Strength in unity

•

Divide and rule

•

Times is a great healer

•

One step ahead

A

P

P

R

O

A

C

H

E

S

T

O

P

L

A

N

N

I

N

G

There are three distinct approaches that describe who has

the responsibility for formulating plans:



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S

W

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A

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S

I

S

“Winners recognize their limitations but focus on

their strengths; losers recognize their strengths

but focus on their limitations”

•

A weakness can be converted into strength by

recognizing it and by making an effort in that

Direction.

•

Opportunities and threats also need to be

recognized.

SWOT ANALYSIS

                          SWOT ANALYSIS

Internal environment 

External environment

Strengths 

Weaknesses 

Opportunities 

Threats

Importance of SWOT analysis

•

It analyses whether the business is healthy or

sick.

•

An organization comes to know about the

internal and external factors that affect its

success or failure.

•

It helps in the formation of a strategy so as to

make preparations for the possible threats from

the competitors.

•

It helps to evaluate a business environment in a

detailed manner so as to take strategic decisions

for the future course of action.

Internal factors

STRENGTH

: It is a positive, good or such other

thing that gives an edge to a company.

Strengths of a company could be

a)

Technical expertise

b)

Efficient human resources

c)

Possession of latest physical assets

d)

Strong research and development

department

e)

Joint venture with a Multi National Company

WEAKNESS

It is something that a company lacks.

a)

Less competent staff

b)

Lack of goodwill in the market

c)

Obsolete plant and machinery

d)

Weak R & D Department

e)

Underutilized plant capacity

f)

Ineffective marketing strategies

g)

Narrow product line

OPPORTUNITIES

These are the chances or the possibilities that

come in the firm’s way.

a)

To enter in a new product line

b)

To expand the company’s existing product lines

c)

To enter into the foreign markets

d)

To acquire the rival firms

e)

To create new alliances so as to increase

competitive strength.

f)

To use latest technologies in the business.

THREATS

These are the forces that have a negative bearing

on any undertaking.

A)

New competitors may enter the field

B)

Customers purchasing substitute products

C)

New technology making products obsolete

D)

Slow down in the market leading to slump.

E)

Change in government policies

F)

Shift in buyers needs and tastes

PLANNING PREMISING

•

Premising: Planning made today is dependent

upon certain assumptions.

•

It constitutes a framework in which planning is to

be done.

•

Planning premises are made taking into

consideration both the past as well as the

expected events.

TYPES OF PLANNING PREMISES

1.

Internal premises: include those that originate

from the sales forecast, existing policies and

procedures of an organization and capital

investment policies.

2. External premises: relating to Political, Social,

Technological and economical forces. These are

beyond the powers of any organization.

TYPES OF PLANNING PREMISES

•

Controllable premises: factors like materials,

money and machine are controllable factors.

•

Semi controllable: these are under partial

control of a business like labour relations and

marketing strategy.

•

Non controllable: which are beyond the

control of any organization like govt. policy,

wars and natural calamities.

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25. Operational planning and

implementation of measures

65

•

Operational planning and implementation are the concretization of

the goals and plans created over the course of the workshop

•

An operational plan is a highly detailed set of activities which

stipulates the day-to-day practical and concrete activities to be

carried out by the management team

Why do we develop an operational plan and

implement its measures?

•

Operational plans provide those within the organization with

a clear picture of their tasks and responsibilities over a

specified time period

•

It helps to achieve the strategic goals of the organization in a

consistent and coherent manner

•

Clearly defining tasks allows for checks to assure that these

tasks are in line with the strategic objectives

25. Operational planning and

implementation of measures

66

Concrete

activities that

should follow

How do we develop an operational plan and

implement its measures?

1.

Definition of available resources for project

implementation such as time, money, personnel,

knowledge etc.

2.

Assessment of currently unavailable resources



Which resources are necessary for task

execution  but are currently not available?



Is there a lack of funding?



A lack of political will?



Is it likely that these resources will be

available in the future?

25. Operational planning and

implementation of measures

67

How do we develop an operational plan and

implement its measures?

3.

Definition of specific responsibilities within the managing

entity:

a)

Who should be responsible for which activities?

b)

Clarify: Define clearly which tasks must be undertaken

c)

Delegate: Delegate responsibility to a person or group of

people for each activity

d)

Clarify: Have concrete timelines in which tasks must be

completed

e)

Indicate the amount of resources which will be dedicated to

each task

f)

Follow good practice guidelines, such as those from the

Open Standards Methods

g)

Clarify: Continue with the logic of the conceptual model and

results webs to maintain consistency

h)

Are detailed enough to provide all personnel with a clear

idea of what is expected from them

25. Operational planning and

implementation of measures

68

4.

Convert strategies and activities into concrete tasks which:

a)

Define clearly which tasks must be undertaken

b)

Delegate responsibility to a person or group of people for each

activity

c)

Have concrete timelines in which tasks must be completed

d)

Indicate the amount of resources which will be dedicated to each

task

e)

Follow good practice guidelines, such as those from the Open

Standards Methods

f)

Continue with the logic of the conceptual model and results webs

to maintain consistency

g)

Are detailed enough to provide all personnel with a clear idea of

what is expected from them

5.

Follow up with monitoring of results, impacts and research

a)

Refer to the following presentation for more detailed information

25. Operational planning and

implementation of measures

69

How do we develop an operational plan and

implement its measures?