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Planning

Shipra Singh

WHAT IS PLANNING?
Planning is an intellectual process of deciding in advance what is to be done, who is to do it, how it is to be done, and when it is to be done.

Planning, thus, involves deciding in advance the objectives (what is to be done) and the necessary means of achieving those objectives (how to do, when to do, etc.)
It is basically a process of thinking before doing.

Cont
Planning process is made up of the following elements: Identification of objectives Formulation of steps to achieve objectives Forecasting Decision making

Characteristics of Planning
Planning is Goal-oriented Primary function of management Pervasive Flexible Continuous Futuristic Involves choice Intellectual exercise

The Planning Process


Situational Analysis: The market, Competition, What Customers want, Our Strengths, Our Weaknesses Setting Plan Objectives: Where we want to be and what we want to accomplish and when. Establishing Planning Premises: In what environment internal or external, will our plans operate?

Cont
Search, Evaluation and Selection of Alternative: What are the most promising alternatives to accomplishing our objectives? Which alternative will give us the best chance of meeting our goals at the lowest cost and highest profit? Selecting the course of action we will pursue.

Cont
Formulating Supporting Plans: Buy Equipment, Buy Materials, Hire and Train Workers, Develop a New Product Implementation of Plan

Monitoring and Controlling Plans

Elements of Planning
Vision, Mission and Values: A vision expresses on organizations fundamental aspirations and purpose, usually by appealing to its members hearts and minds.
To become the worlds leading consumer company for automobile products and services (vision of Ford)

Cont
A mission is organizations purpose or reason for existence. We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.

We anticipate consumer need and deliver outstanding products and services that improve people's lives. (mission of Ford)

Cont
Values are organizations philosophical priorities to which managers are committed. Values outline how managers and employees should conduct themselves, how they should do business.
Our business is driven by our consumer focus, creativity, resourcefulness, and entrepreneurial spirit.
We are an inspired, diverse team. We respect and value everyone's contribution. The health and safety of our people are paramount. We are a leader in environmental responsibility. Our integrity is never compromised and we make a positive contribution to society. We constantly strive to improve in everything we do. Guided by these values, we provide superior returns to our shareholders.

Cont
Goals: A goal is a desired future state that an organization attempt to achieve. Goals specify exactly what must be done so that the organization can attain its vision and mission. Time Span: Planning process strives to bridge gap between where the organization is at present and where it wants to be in future within a specific span of time. Premises: These are the assumptions about the anticipated environment in which the plans are expected to operate.

Approaches to Planning
Top-Down Bottom-Up Composite Team

FEW STATED OBJECTIVES FROM LARGE COMPANIES

PLANNING IN THE HIERARCHY OF ORGANIZATIONS


Strategic Planning Top Executives

Middle-Level Managers

Operational Planning

First-Level Managers

2003 Pearson Education Canada Inc.

7.23

Barriers to Planning
Lack of accurate information Time and cost Inflexibility Resistance to Change Lack of ability to plan False sense of security Environmental constraints

Types of Planning
It can be classified on the basis of the following dimensions: Scope and nature of activities Time horizon Environmental challenges Degree of formalism

Cont
On the basis of scope and nature of activities: Strategic Planning: It is the process of deciding on objectives of the organization, on changes in these objectives, on the resources used to attain these objectives, and on the policies that are to govern the acquisition, use and disposition of these resources. Market share, innovation, financial resources, social responsibility, profit requirements, etc. How to survive and compete.

Cont
Tactical Planning: It involves the process of translating broad strategic plans and goals into more specific plans and goals that are relevant to a definite area of organizational functioning. Coordinative in nature. How to attain specific functional goals.

Cont
Operational Planning: It involves the process of identifying specific procedures and processes to carry out organizational activities associated with work stations. Short-term moves and manoeuvers to perform routine tasks such as production runs, delivery schedules, human requirements, arrangement of machinery and production facilities, etc.

Cont
On the basis of Time Horizon: Long-term Planning Medium-term Planning Short-term Planning

Planning Premises and Forecasting


Planning premises are the anticipated environment in which plans are executed to operate. They include assumptions or forecasts of the future and known conditions that will affect the operation of plans.

Cont
A distinction should be drawn between forecasts that are planning premises and forecasts that are translated into future expectancies, usually in financial terms, from actual plans developed. A forecast of the costs or revenues from a new capital investment translates a planning programme into future expectations. In the first case, the forecast is a prerequisite of planning; in the second case, the forecast is a result of planning.

Types of Planning Premises


Internal and External Premises Internal: strategies, policies, organization structure, physical and human resources, etc. External: economic and political trends, national income, technological changes, etc. Controllable, Semi-controllable and Uncontrollable Premises Tangible and Intangible Premises