TOPIC 2

PLANNING

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An organization needs to have a goal to

achieve.
By having a goal, then the organization
can plan how to achieve the goal.

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Planning

Plan

The act of determining/setting the organizations

goals and the way for achieving them.
A blueprint specifying the resource allocations,
schedules, and other actions necessary for attaining
goals.

Goals

A desired future state that the organization attempts

to realize.

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Setting goals starts with top managers.

It begins with a mission statement.
Mission statement
a broadly stated definition of the organizations basic
business scope and operations that distinguishes it
from similar type of organizations.
The purpose of mission statement.
to define why a firm exists, provide strategic
direction to the employees of the firm, and
distinguish/differentiate the company from its
competitors.
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to ensure that the organization is both

effective and efficient in its activities.

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Sense of direction and purpose (road map)

Organization knows its goal and how to achieve it

Planning will provide direction where you are
going
Planning will guide the organization to the
mission

Foundation for Effective Control System

Plans developed can be used as a foundation in

monitoring/controlling organizations
performance
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Better Coordination

Organization consists of multiple work

groups, a plan will help define the
responsibilities of each work groups &
coordinate the activities.

Focus on Forward Thinking

Planning forces managers to think ahead

and evaluate the threats & opportunities of
an organization in future.
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What
has to
be done

A task can not be

accomplished if the
manager is not
aware of:
How is
it to be
done

When is
it to be
done

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Top-down planning
A planning process which is done by the top
management and passed down to lower level
management to implement the plan.
Advantages:
a) top management are the ones who can see the
overall picture of the organization;
b) planning done at top level is less expensive do
not need to go through multiple levels of
employees.
c) to protect confidential information from lower
level.
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Bottom-up planning
A planning process which is done by the lower level
management.
Advantages:
a) enhance performance of lower level
management/employees
b) lower level employees may provide better idea as
they are the closest to the situation or customers
c) encourage commitment from lower level
employees

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Three types: Strategic plans

Tactical plans
Operational plans

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Strategic plans are the plans developed to

achieve strategic goals.
Strategic goals = long term goal/general
goal of
an organization
Is a general plan outlining decisions of
resource allocation, priorities, and action
steps necessary to reach strategic goals.
Set by Board of Directors and top
management.
Have an extended time horizon (10 years).
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A process by which an organization

makes decisions and takes actions to
enhance its long-term performance.
Strategic planning is the process by
which an organization makes decisions
and takes actions that affect its long-run
performance.

A strategic plan is the output of the

strategic planning process.

Strategic plans define both the markets in

which the firm competes and the ways in
which it competes in those markets.
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To move the organization from where it

is to where it wants to be.

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Corporate Strategic Planning

Business Strategic Planning
Functional Strategic Planning

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Decisions and actions that define the portfolio

of business units that an organization
maintains.
Addresses the question What business
should we be in?
Options = whether to maintain existing
business or to diversify.
Objective is to develop a mix business units
that meets the long-term growth and
profitability goals of the organization.
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Relatively broad and general in nature.

May extend as far as 5 to 10 years into
the future.
Formulated by the board of directors
and top level executives.

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Focused plans that define how each

business unit in the firms corporate
portfolio will operate in its market arena.
Addresses the question How do we
compete in our existing lines of
business?
Objective is to develop and maintain a
distinct competitive advantage that will
lead to organizational success.
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Relatively more specific than the

corporate strategy.
Time horizon is 1 to 5 years.
Formulated by the individuals who are
most familiar with the operations of the
business units, i.e. top level executives
and managers.
i.e. a manager of each business unit.
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Specifies the production, research and

development, financial, human resource
management, and marketing activities
necessary to implement the
organizations corporate and business
strategies.
Focuses on how things will get done.
Addresses the question How do we
implement our corporate and
business strategies?
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Carried out by middle and lower level

managers.
More specific.
Shorter time frame (1-2 years).

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A plan aimed at achieving tactical goals

and developed to implement parts of
strategic plan.
Typically involve upper and middle
management.
Have a shorter time horizon and a more
specific and concrete focus.
Concerned more with getting things
done than with deciding what to do.
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Focuses on carrying out tactical plans

to achieve operational goals.
Developed by middle and lower level
managers.
Have a short term focus, and narrow in
scope.

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1. Standing plans

Serve as guideline and are designed to be used

again and again

Policy general guidelines for decision making

within the organization i.e. policy for sick leave,
vacation leave, grade appeals.
Procedures plan that specifies how to proceed in a
specific situation that routinely arises i.e. procedure
for requesting annual leave, ordering supplies,
booking a class.
Rules- detailed and specific regulation for action i.e.
number of sick leave/annual leave an employee can
take for a year, min grade for admission into a
program

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2. Single Use Plan

A one time plan specifically designed to meet the need

of a unique situation i.e. build a new Headquarter

Program plan that govern a comprehensive set of

activities designed to accomplish a particular sets of
goals i.e. introducing a new product line, opening a new
facility
i.e. Program Anak Angkat consists of a set of
activities, with a set of goals to achieve.
Projects plan that direct the efforts of individuals or
work groups toward the achievement of a specific goals
less scope and complexity than program
i.e. in Program Anak Angkat, Finance Unit is working
toward achieving their own goal = get funding (one
specific goal)
Budget plan that specify how financial resources
should be allocated i.e. 3Million allocation for a program

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Lack of commitment
Lack of meaningful objective
Rely too much on experience
Lack of management support
Lack of clear delegation of authority

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Planning must not be left to chance

Planning must be organized
Planning must be clear and definite
Manager must participate in planning

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