CHAPTER 3

PLANNING
◦ Definition
◦ Importance and drawbacks of
planning
◦ The types of planning and goals
◦ Strategic planning
◦ Vision and Mission statement
◦ SWOT analysis
OUTLINE..
◦ Operational planning
◦ Standing & single- use plan
◦ Tactical planning
◦ Obstacles to effective planning
◦ Contemporary issues in planning
1.0
DEFINITION
OF PLANNING
◦ Planning is defining organizational
goals, establishing a strategy to
reach those goals, and developing
a comprehensive hierarchy of plans
to integrate and coordinate
activities (Stoner)

◦ Planning is the most basic

managerial function. When done
properly, it sets the direction for the
organizing, leading, and controlling
functions.
1.0 DEFINITION OF
PLANNING continued.....

1 2 3
Defining the organization’s Establishing an overall Developing a
objectives or goals strategy for achieving those comprehensive hierarchy of
goals 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).”
1.1 PLANNING
PROCESS
◦ Choosing the
organization’s vision,
missions, and overall goals
for both the short run and
long run;
◦ Devising divisional,
departmental, and even
individual goals based on
organizational goals,
◦ Choosing strategies and
tactics to achieve those
goals; and
◦ Allocating resources
(people, money, equipment
and facilities) to achieve
the various goals,
strategies, and tactics
(Hellriegel,Jackson &
Slocum)
2.0 IMPORTANCE & DRAWBACKS OF PLANNING

2.1 IMPORTANCE OF PLANNING

1. Planning sets standards and major

objectives for the organization.
2. Planning coordinates effort
(establishing direction and clarifying
path)
3. Planning reduces uncertainty
(emergency, nonroutine events)
4. Planning reduces redundancy
5. Planning helps to determine what
opportunities to exploit (SWOT)
2.2 BENEFITS OF PLANNING
Managers
and
employees
put forth
greater effort
when
following a
plan
2.3 4 REASONS WHY MANAGERS
SHOULD PLAN…

Provides direction – members understand where organization is going,

and coordinate their effort to reach the same goal, otherwise result in
chaos and conflict.

To reduce the impact of change -planning reduces uncertainty,

(anticipate change, impact of change and appropriate response to take)

– prepare people in chaotic environment

2.3 4 reasons why managers
should plan continued…

3. Reduce waste and

redundancy- planning help to
uncover waste, and inefficiencies
are clear if plan is well –defined.
4. Set standards that facilitate
control – Members know what’s
expected through set objectives.
May take corrective actions –
taken is things go wrongly.
2.4 PLANNING PITFALLS
Planning focuses
Planning may create Formal plans can’t managers’ attention
rigidity – unsuitable for replace intuition on today’s
volatile environment. and creativity. competition, not on
tomorrow’s survival.

Formal planning
Impede change and
reinforces success, Create a false sense
prevent or slow
which may lead to of certainty
needed adaptation
complacency.

Detachment (separated)
of planners
3.0 TYPES OF PLANNING & GOALS

3.1 ELEMENTS OF
PLANNING

Goals (also Objectives)

◦ Desired outcomes for
individuals, groups, or entire
organizations
◦ Provide direction and
evaluation performance criteria
Plans
◦ Documents that outline how
goals are to be accomplished
◦ Describe how resources are to
be allocated and establish
activity schedules
3.2 TYPES OF GOALS
◦ Financial Goals
◦ Are related to the expected
internal financial performance of
the organization.
◦ Strategic Goals
◦ Are related to the performance of
the firm relative to factors in its
external environment (e.g.,
competitors).
◦ Stated Goals versus Real Goals
◦ Broadly-worded official
statements of the organization
(intended for public consumption)
that may be irrelevant to its real
goals (what actually goes on in
the organization).
EXAMPLES OF STATED GOALS OF
LARGE ORGANIZATIONS
3.3 TYPES OF PLANNING
Strategic vs. Operational Plans

Strategic Plans Operational / Tactical

Plans

Apply to the entire organization. Specific in nature

Establish the organization’s overall Specifies details of how
goals. overall goals will be
Basis for operational plans. achieved

Cover extended periods of time, Cover short time period

usually 5 years. e.g monthly, weekly and
daily plans.
General in nature
3.3.1 STRATEGIC PLANNING
◦ Strategic planning is a process by which an
organization makes decision and takes actions to
enhance its long term performance.
◦ Strategic plan includes evaluation and development
of the organization’s purpose, mission, and overall
objectives and policies for current and future years.
It also defines what business the company is in, or
wants to be in. It may take 5 to 10 years to
complete.
◦ There are three (3) levels of strategic planning
which are corporate strategy, business strategies
and functional strategies.
 Operational planning is a
process of determining the
day-to-day activities that are
necessary to achieve the long
term goals of the organization.

3.3.2
OPERATIONAL
PLANNING /
TACTICAL
There are two main types of
operational plans :

Single - Standing
use Plan Plans
 3.3.2 OPERATIONAL PLANNING /
TACTICAL continued...

3.3.2.1 SINGLE -USE PLAN

It is a plan that addresses specific organizational
situations that typically do not occur.

Three types of single use plans:

◦ Program- single use plan that governs a comprehensive
set of activities to accomplish a specific set of goals
◦ Project- single use plan that directs the efforts of
individuals or work groups toward the achievement of a
goal
◦ Budgets- single use plans that specify how financial
resources should be allocated for a given period
 3.3.2 OPERATIONAL PLANNING /
TACTICAL continued...
3.3.2.2 STANDING PLANS
Standing plans are plans that deal with organizational
issues and problems that recur frequently. It assists
managers in solving problems or processes.
The major types of standing plans are:
◦ Policies- general guidelines for decision making within
the organization
◦ Procedures- instructions or detailed guidelines for
handling organizational action that occur regularly.
◦ Rules- statements or directives that must be adhered to in
a given situation. They are detailed and specific guides to
action
 3.3.2 OPERATIONAL PLANNING /
TACTICAL continued...
Tactical Plan
◦ Tactical planning is micro-oriented and focused
your short term S.M.A.R.T. goals, which usually
have 1 to 18 month time frames.

◦ This type of short term planning is all about the

How (i.e., process) of getting things doing.

◦ The focus is on operations, which includes

creating and executing effective, efficient
action plans.
 ◦ The set of managerial
decisions and actions
STRATEGIC
MANAGEMENT that determines the
long-run performance
of an organization.
 1. It results in higher
organizational performance.
2. It requires that managers
examine and adapt to business
environment changes.
IMPORTANT 3. It coordinates diverse
OF STRATEGIC organizational units, helping
MANAGEMENT them focus on organizational
goals.
4. Today – government agencies,
education institution also have
strategic planning.-e.g high cost
and competition force many
university to find a niche and
prosper.
 Identifying
vision, SWOT Analysis
mission, goals

STRATEGIC
Formulate Implement MANAGEMENT
strategies strategies PROCESS

Evaluate
results
STRATEGIC MANAGEMENT PROCESS
continued…….
STRATEGIC MANAGEMENT
PROCESS continued…….

STEP 1: Identifying Vision, Mission, Goal

A mental picture that you have

Organizational and want to turn into a reality in
vision the future.

A broad declaration of the overriding

Organizational purpose. The mission statement
mission: identifies product, customers and how
the firm differs from competitors.
STEP 2 & 3: SWOT ANALYSIS
EXAMPLE: SWOT ANALYSIS
(AIR ASIA)

STRENGTHS (internal) OPPORTUNITIES

-Low cost leader in asia (external)
– no frills -“Asean open skies”
-- strong utilization in IT - middle class population
-- “ticketless, sms alert, 700 million people
etc.

WEAKNESS THREATS
(internal) (external)
Management – -SARS, Terrorism,
frequent delay, -Airport charges,
Customer’s landing charges,
complaints, hidden -competition
cost, etc
(\
 Formulate strategy
Step (develop strategic
4 alternatives and pick
best one)

STRATEGIC
MANAGEMENT Step Implement strategy
PROCESS 5
continued…….

Evaluate strategy (how

Step effective were they?
6 What adjustments are
needed?
PLANNING FROM TOP TO
BOTTOM
Top level Vision &
managers mission

Middle level Tactical plan

Management
managers by objectives

Low level Operational

Standing Plan
Single-use
managers plan plan
4.0 BARRIERS TO EFFECTIVE
PLANNING
Some managers may
Demands on the simply be too busy
manager's time "putting out fires" to take
time to plan properly.

Ambiguous and Environments complexity

and vitality are
uncertain operating commonly cited reasons
environments for not planning.

Manager may hesitate to

Resistance to change plan because they are
resistant to change.
 4.1 OVERCOMING TO BARRIERS

Involve employees in decision making

Involve • Employee involvement in the planning process is essential for its
success.
• It makes employees feel appreciated and valued, thus boosting
their morale and increase work productivity at the workplace.

Tolerate a diversity of views

Tolerate • Managers who are intolerant of a diversity of views
within their units eliminate one of the primary
benefits associated with planning

Encourage strategic thinking

Encourage • Developing an organizational culture that
encourages strategic and results-oriented thinking
will lead to more effective planning.
5.0 CONTEMPORARY
ISSUES IN
MANAGEMENT
1. Uncertainty
▪ Flexible
▪ Planning as an ongoing process
▪ Responsive
2. Environmental scanning
▪ Collecting information (clients, competitors,
governmental ruling)
▪ Make decision (developing strategies)
▪ Keep information (publications, reports)
▪ Information tracks (newspapers, medias,
governments circulars, acts, procedure)