DEFINITIONS

“Planning is the selecting and relating of facts and the making and using of assumptions
regarding the future in the visualization to achieve desire results.” - George Terry
“Planning is deciding advance what to do, how to do it, when to do it, who is to do it. It bridges
the gap between where we are, where we want to go. It makes it possible for things to occur
which would not otherwise happen.” - Koontz and O’Donnel

Based on futurity: “Planning is a trap laid down to capture the future”-Allen.

“Planning is informed anticipation of future” -Haimann.
“Planning is ‘anticipatory’ decision-making” -R.L. Ackoff.

Planning is required to make decisions on …..

• What should be done?
• How it should be done?
• Who will be responsible?
• Where the action is to be taken?
• Why is it done?
Planning is the first step of management process concerned with the establishment of
objectives and analysis of present limitations for attaining such goals.
Planning Is:
• A promise to do something acceptable
• An exciting opportunity to form a mental model to guide future activities.
NATURE OF PLANNING
✓ Planning is goal-oriented
✓ Primacy of Planning
✓ Pervasiveness of Planning
✓ Efficiency, Economy and Accuracy
✓ Planning is an intellectual process
✓ Limiting Factors
✓ Flexibility
✓ Co-ordination
i. Planning is goal-oriented: Every plan must contribute in some positive way towards the
accomplishment of group objectives. Planning has no meaning without being related
to goals.
ii. Primacy of Planning: Planning is the first of the managerial functions. It precedes all other
management functions.
iii. Pervasiveness of Planning: Planning is found at all levels of management. Top
management looks after strategic planning. Middle management is in charge of
administrative planning. Lower management has to concentrate on operational
planning.
iv. Efficiency, Economy and Accuracy: Efficiency of plan is measured by its contribution to
the objectives as economically as possible. Planning also focuses on accurate forecasts.
v. Planning is an intellectual process: The quality of planning will vary according to the
quality of the mind of the manager.
vi. Limiting Factors: A planner must recognize the limiting factors (money, manpower etc)
and formulate plans in the light of these critical factors.
vii. Flexibility: The process of planning should be adaptable to changing environmental
 conditions.
viii. Co-ordination: Planning co-ordinates the what, who, how, where and why of planning.
Without co-ordination of all activities, we cannot have united efforts.

PURPOSES / IMPORTANCE OF PLANNING

Planning seems to take a lot of effort. As a managerial function planning is important due to
the following reasons:-
i. To provide direction
ii. To reduce / offset uncertainty and change
iii. To minimize waste and redundancy
iv. To set the standards to make control effective
v. To manage by objectives
vi. To help in co-ordination
vii. To secure economy in operation
viii. To increase organizational effectiveness

i. Planning provides direction: Planning provides direction to managers and non- managers
alike. When employees know what their organization or work unit is trying to accomplish
and what they must contribute in order to reach goals, they can coordinate their
activities, cooperate with each other and do what it takes to accomplish those goals.
Without planning, department and individuals might work at cross-purpose and prevent
the organization from efficiently achieving goals.
ii. Planning reduces / Offset uncertainty and change: Planning reduces uncertainty by
forcing managers to look ahead, anticipate change, consider the impact of change, and
develop appropriate response. Although planning won’t eliminate uncertainty, managers
plan so they can respond efficiently. Future is always full of uncertainties and changes.
Planning foresees the future and makes the necessary provisions for it.
iii. Planning Minimizes waste and redundancy: Planning Minimizes waste and redundancy.
When work activity is coordinated around plans, inefficiency becomes obvious and can
be corrected and eliminated.
iv. Planning establishes the goals or standard to make control effective: When managers
plan, they develop goals and plan. When they control they see whether the plans have
been carried out and the goals met. Without planning there would be no goals against
which to measure or evaluate work effort. The controlling function of management
relates to the comparison of the planned performance with the actual performance. In
the absence of plans, a management will have no standards for controlling other's
performance.
v. To manage by objectives: All the activities of an organization are designed to achieve
certain specified objectives. However, planning makes the objectives more concrete by
focusing attention on them.
vi. To help in co-ordination: Co-ordination is, indeed, the essence of management, the
planning is the base of it. Without planning it is not possible to co-ordinate the different
activities of an organization.
vii. To secure economy in operation: Planning involves, the selection of most profitable
course of action that would lead to the best result at the minimum costs.
viii. To increase organizational effectiveness: Mere efficiency in the organization is not
important; it should also lead to productivity and effectiveness. Planning enables the
managers to measure the organizational effectiveness in the context of the stated
 objectives and take further actions in this direction.
TYPES OF PLANNING
Planning is a complex and comprehensive process involving a series of overlapping and
interrelated elements or stages, including strategic, tactical, and operational planning.
I. On the basis of content, Plans can be classified as:
A. Strategic Planning
B. Tactical Planning
C. Operational planning
A. trategic planning establishes master plans that shape the destiny of the firm. An example
of strategic planning is when the executive team at Harley-Davidson Inc. planned how to deal
with the demographic shift of their customer base becoming much older. Strategic plans set
broad, comprehensive, and longer-term action directions for the entire organization.
• It is the process of deciding on Long-term objectives of the organization.
• It encompasses all the functional areas of business
• It decides major goals and policies of allocation of resources to achieve these goals.
• Done at higher levels of management
• Less detailed because it is not involved with the day to day operations of the organization

B. Tactical planning translates strategic plans into specific goals and plans that are most
relevant to a particular organizational unit. The tactical plans also provide details of how the
company or business unit will compete within its chosen business area. Middle level managers
have the primary responsibility for formulating and executing tactical plans. These plans are
based on marketplace realities when developed for a business. Conditions can change rapidly
in competitive fields such as a Korean company suddenly developing a substantially lower-price
sports bike.
• It involves conversion of detailed and specific plans into detailed and specification plans.
• It is the blue print for current action and it supports the strategic plans.
• It is Mid-term term
• It is more detailed because it involves with day to day operations of the organization.
• It is done at middle level of management

C. Operational planning identifies the specific procedures and actions required at lower levels
in the organization. If Harley- Davidson wants to revamp an assembly line to produce more
sports bikes, operational plans would have to be drawn. In practice, the distinction between
tactical planning and operational planning is not clear-cut. However, both tactical plans and
operational plans must support the strategic plan such as revamping manufacturing and
marketing to capture a larger group of young cyclists..
• It is short term
• It is more detailed because it is involves with day to day operations of the organization.
• Done at lower level of management
• Define what needs to be done in specific areas to implement strategic plans.
– Production plans
– Financial plans
– Facilities plans
– Marketing plans
– Human resource plans
II. On the basis of time period
 • Long term planning
➢ Time frame beyond five years. Long term Plans: >5yrs
➢ It specifies what the organization wants to become in long run.
➢ It involves great deal of uncertainty.
➢ Higher management levels focus on longer time horizons.
➢ Cover a longer time
➢ May include a variety of different types of training
Some examples Long term Plans:
• An annual plan, including Fast Start and basic training
• Makeup training sessions
• Den chief training
• Regular monthly roundtables
• Supplemental training
• Personal coaching
• Self-study
We should not overlook the importance of long-range plans in providing a total leadership
growth and development program for leaders.
• Intermediate term/ Midterm planning
➢ Time frame between two and five years. Medium Term Plans: >1 yr but <5yrs
➢ It is designed to implement long term plans.
• Short term planning
➢ Time frame of one year or less. Short term Plans: Upto one year
➢ It provide basis for day to day operations.
➢ Meet a particular objective in the near future
➢ Cover a limited area of training
➢ Answer the question: Are we doing things right?
➢ Should fit well within and contribute to long-range plans
Some examples:
• Plans for basic training sessions for new leaders who have just been recruited
• Plans for a den chief training conference
• Plans for training roundtable staff members
STEPS IN PLANNING
Planning at its best is a systematic process. The various steps involved in planning are given
below:

1. Perception of Opportunities (The market, Competition, what customer wants, Strength

and weakness): Although preceding actual planning and therefore not strictly a part of the
planning process, awareness of an opportunity is the real starting point for planning. It includes
a preliminary look at possible future opportunities and the ability to see them clearly and
completely, knowledge of where we stand in the light of our strengths and weaknesses, an
understanding of why we wish to solve uncertainties, and a vision of what we expect to gain.
Setting realistic objectives depends on this awareness. Planning requires realistic diagnosis of
the opportunity situation. Defining the present situation includes measuring success and
examining internal capabilities and external threats.
2. Establish Goals and Objectives (Where we want to be and what we want to accomplish
and when): The second step in planning is to establish goals and identify objectives that
contribute to the attainment of goals. (Goals are broader than objectives, whereas objectives
function as smaller goals that support the bigger goals.)
The first step in planning is to establish objectives for the entire enterprise and then for each
subordinate unit. Objectives specifying the results expected indicate the end points of what is
to be done, where the primary emphasis is to be placed, and what is to be accomplished by the
network of strategies, policies, procedures, rules, budgets and programs. Enterprise objectives
should give direction to the nature of all major plans which, by reflecting these objectives,
define the objectives of major departments. Major department objectives, in turn, control the
objectives of subordinate departments, and so on down the line. The objectives of lesser
departments will be better framed, however, if subdivision managers understand the overall
enterprise objectives and the implied derivative goals and if they are given an opportunity to
contribute their ideas to them and to the setting of their own goals.
3. Considering the Planning Premises (Analyze the Environment to Forecast Aids and Barriers
to Goals and Objectives): As an extension of defining the present situation, the manager or
other planner attempts to predict which internal and external factors will foster or hinder
attainment of the desired ends. These are forecast data of a factual nature, applicable basic
policies, and existing company plans. Premises, then, are planning assumptions – in other
words, the expected environment of plans in operation. This step leads to one of the major
principles of planning. Planning premises include far more than the usual basic forecasts of
population, prices, costs, production, markets, and similar matters. Because the future
environment of plans is so complex, it would not be profitable or realistic to make assumptions
about every detail of the future environment of a plan.
4. Develop Action Plans to Reach Goals and Objectives: Goals and objectives are only wishful
thinking until action plans are drawn. An action plan consists of the specific steps necessary to
achieve a goal or objective.
5. Develop Budgets: Planning usually results in action plans that require money to implement.
Among the expenses would be larger advertising and promotion budgets geared to seniors and
women.
6. Implement the Plans: If the plans developed in the previous five steps are to benefit the
firm, they must be put to use. A frequent criticism of planners is that they develop elaborate
plans and then abandon them in favor of conducting business as usual. One estimate is that 70
percent of the time when CEOs fail, the major cause of failure is poor execution, not poor
planning. Poor execution in this study included not getting things done, being indecisive, and
not delivering on commitments. Furthermore, execution is considered to be a specific set of
behaviors and techniques that companies need to master in order to maintain a competitive
advantage.
7. Control the Plans: Planning does not end with implementation, because plans may not
always proceed as conceived. The control process measures progress toward goal attainment
and indicates corrective action if too much deviation is detected. The deviation from expected
performance can be negative or positive. Progress against all of the goals and objectives
mentioned above must be measured. One goal was to hold on to much of the existing customer
base.
8. Make Contingency Plans: Many planners develop a set of backup plans to be used in case
things do not proceed as hoped. A contingency plan is an alternative plan to be used if the
original plan cannot be implemented or a crisis develops. (The familiar expression “Let’s try
plan B” gets at the essence of contingency planning.)