CHAPTER 2: PLANNING

Prepared by: Nadia Fatihah binti Mastan

Learning Objectives
After completing this chapter,
students should be able to:
Define planning
Explain why planning is critical for
effective leadership
Describe strategic planning
Discuss operational plan

Planning
2.1 Definition and importance of planning
2.2 Types of planning and goals
2.3 Strategic planning
2.4 Mission statement
2.5 Types of organizational
plan/operational
plan

Definition of planning
The process of determining in advance
what should be accomplished and how
it should be realized (Mondy).
Setting goals and defining the actions
necessary to achieve those goals

Plan
A blueprint for action: it prescribes the
activities necessary for an organization
to realize their goals

Example of a Blueprint
TENTATIF PROGRAM KURSUS MOTIVASI PENSYARAH JABATAN PENGURUSAN
PERNIAGAAN UiTM PERLIS
Jumaat (23 Julai 2010)

2.45pm :
BerkumpuldiHEAUiTMPerlisuntukmenaikibaskeJeti
KualaPerlis.
3.30pm :
MenaikiferikePulauLangkawi.
4.30pm :
TibadiJetiKuahdanbertolakkeKondoIstana
(BasdisediakanolehpihakKondoIstana).
4.45pm :
Daftarmasukpenginapan.
7.00pm :
Makanmalam.
8.30pm :
CeramahSesi1.
11.00pm :
Minummalam.

Purpose & Importance of

Planning
Purpose: To ensure that the organization
is both effective and efficient in its
activities
Importance:
1.Helps to determine what are
companys opportunities
2.Planning enables company to identify
the course of action
3.Without planning much will be left out

Purpose & Importance of

Planning
Importance:
4.Through plan, resources are efficiently
and effectively utilized, resulting in saving
resources
5.When we plan we know what are we
really expected and becoming more
meaningful
6.It helps to achieve goals and reduces
overlapping activities

Purpose & Importance of

Planning
Importance:
7.Planning can provide effective
utilization of available facilities
8.Planning helps managers to become
confident and aggressive leader and can
cope with all the problems.
9.Planning guides management
thinking to future desirable activities and
what must be done to attain goals.

Purpose & Importance of

Planning
Importance:
Planning provide a foundation for all
organizational activities. Through
planning, managers coordinate
organizational activities so that the goals
of the organization can be achieved.

Purpose & Importance of

Planning
Importance:
Gives guidance and direction to the
members of the organization as to their
role in delivering those products and
services.
To ensure that the appropriate products
and services are offered to its
customers.

Benefits of planning
a) Better Coordination
Planning provides a foundation for the
coordination of a broad range of
organizational activities.
A plan helps to define the
responsibilities of individuals and work
groups and helps coordinate their
activities.

Benefits of planning
b) Focus on Forward Thinking
The planning function forces managers
to think ahead and consider resource
needs and potential opportunities or
threats that the organization may face in
the future.

Benefits of planning
c) Participatory Work Environment

Successful planning requires the

participation of a wide range of
organizational members. The
organization benefits by having access
to a broad base of experience and
knowledge in the planning process.
Organizational members are more
likely to buy in to a plan that they
have helped develop.

Benefits of planning
d) Most Effective Control System
An organizations plan provides a foundation
for control of the processes and progress of
the company.
The implementation of the plan can be
evaluated and progress toward the
achievement of performance objectives can
be monitored
Controls provide mechanism for ensuring that
the organization is moving in the right
direction and making progress toward achieve
its goals.

Types of planning and goals

Strategic Planning
Long range (3-5 years into the future)
planning that focuses on the
organization as a whole.
It defines the markets in which the
organization competes, what the
customers in those markets wants and
how the organization will deliver
products and services.

Strategic Planning
Set by the Board of Directors and top
management.
The purpose is to move the organization
from where it is to where it wants to be.
Consists of 3 levels: corporate strategy,
business strategy & functional strategy
Strategy
A method of shaping a companys future
and involves determining the long-run
direction of the organization

Mission Statement
A statement of an organizational

fundamental purpose
e.g. Starbuck- The premier purveyor
of the finest coffee in the world while
maintaining our uncompromising
principles as we grow

Developing Mission
Statement
Conciseandmeaningful
Itmustdescribethe3primaryaspectofanorganization:
1. Productorservices
2. Targetsmarkets
3. Overallstrategyforensuringlong-termsuccess
Itmustbecomeanaturalpartoftheorganizationembodiedin
theminds,habits,attitudesanddecisionsofeveryoneinthe
companyeveryday

Developing Mission
Statement
Defines the organization's purpose and
primary objectives. Its prime function is
internal to define the key measure or
measures of the organization's success
and its prime audience is the leadership
team and stockholders.
The mission is expressed in writing to
ensure that all organization member will
have easy access to it and thoroughly
understand exactly what organization is
trying to accomplish.

Importance of Mission
Statement

It sets the strategic direction of an

organization Why we are here
and where we are going .
It provides a foundation for the
development of business strategy
It determines how well it serves the
organizational stakeholdersindividuals and group directly affected
by an organizational and its
accomplishment

Importance of Mission
Statement

Helps management increase the

probability that the organization will be
successful.
Helps management focus human effort
in a common direction.
Serves as a sound rationale for
allocating resources.
Helps management define broad but
important job areas within an
organization & therefore critical jobs
that must be accomplished.

Examples of Mission
Statements
Google's mission is to organize the world's
information and make it universally
accessible and useful.
Facebooks mission is to give people the
power to share and make the world more
open and connected.
Apple is committed to bringing the best
personal computing experience to students,
educators, creative professionals and
consumers around the world through its
innovative hardware, software and Internet
offerings.

Operational Planning
Focuses on determining the day-to-day
activities that are necessary to achieve
the long-term goals of the organization.
Operational plans are more specific,
address shorter-term issues & are
formulated by the middle and lower-level
managers who are responsible for the
work groups in the organization.
Can be categorized as i)standing plans
ii)single-use
plans

Standing Plans
Are used over and over again
because they focus on
organizational situations that occur
repeatedly.
Ensure that recurring situations are
handled consistently over time.
Consists of policies, procedures and
rules & regulations.

Policies
Guidelines that govern how certain
organizational situations will be addressed.
Provide guidance to managers who must
make decisions about circumstances that
occur frequently within the organization.
Eg.: policies concerning sick leave,
vacation leave and benefit options, policies
about admittance to certain academic
programs, an organization may require an
employee to be confirmed first
McDs policy will not grant a franchise to
an individual who already owns another
fast food restaurant.

Procedures
More specific and designed to give explicit
instructions on how to complete a recurring
task.
Eg: the admissions clerk might be told that,
when an application is received, he @ she
should i)set up an electronic file for the
applicant, ii) merge test-score records,
transcripts & letters of reference to the
electronic file as they are received iii)
forward the electronic file to the appropriate
admissions director when it is complete.

Rules and regulations

Strictest types of standing plan.
Provide detailed and specific
regulations for action.
Indicates what an organization member
should or should not do and allows no
room for interpretation.
Eg: No Smoking, rules on the number
of sick days an employee may take
with pay, wearing formal uniforms
every Monday.

Single Use Plans

Typically use only once because the
specific situation to which they
apply doesnt recur.
Consist of programs, projects and
budgets.

Programs
Single-use plans that govern a relatively
comprehensive set of activities designed
to accomplish a particular set of goals.
Outline the major steps and specific
actions necessary to implement the
activities.
The timing and sequencing of the efforts
of individuals
Members responsible for each step
Eg:Program Pembangunan Pelajar

Projects
Less comprehensive and narrower in focus
than programs and usually have
predetermined target dates for completion.
Many projects are designed to collect and
analyze information for decision-making
purposes or to support more
comprehensive planning efforts such as
programs.
Short time in nature
Eg: PLUS project, KLCC project

Budgets
Statements of financial resources set
aside for specific activities in a given
period of time.
It details how funds will be spent on
labor, raw materials, capital goods,
information systems, marketing etc.
As well as how the funds will be
obtained.

Barriers to Effective
Planning
1) Lack of commitment to planning

Top and lower level managers are not committed to

the plans that they have structured

2) Lack of meaningful objectives of goals

Goals that are being established are unclear and

unattainable

3) Rely too much on experience

Experience as indicated is likely to be a dangerous

teacher simply because what happened in the past is
not likely to fit a future situation.

Barriers to Effective
Planning

4) Demands on the managers time

Some managers may simply be too busy putting out
fires to take the time to plan properly

5) Ambiguous and Uncertain Operating

Environments
Managers who are uncomfortable with ambiguity may
find it difficult and frustrating to plan under conditions
of uncertainty.

6) Resistance to Change
Organizational members may associate planning with a
need to change the way they do their jobs.

Overcoming The Barriers to Effective

Planning
1)Learn to apply the managerial functions
better
Learn to identify what is really important as opposed to
what is urgent but not important
Use well-thought goals, policies, procedures and rules
Delegate authority well
Communicate expectations early

2) Involve employees in decision making

Seek info from employees and keep them informed
about expectations
Encourage employees to communicate about the
planning efforts of the organization

Overcoming The Barriers to Effective

Planning
3) Take advantage of a diversity of views
Diverse views can lead to a broader assessment and
evaluation of organizational problems and opportunities ,
plans that are comprehensive and fully developed.

4) Encourage strategic thinking

Develop an organizational culture that encourages
strategic and results-oriented thinking.
Provide training to develop strategic thinking skills and
give opportunity to practice the skills in their work
environment.
Give reward to employees for thinking strategically when
developing their plans.