Lecture 3: Functions of Management

Planning
1. Why and how managers plan
2. Types of plans used by managers
3. Planning tools and techniques
4. Implementing plans to achieve results
● Managers need the ability to look ahead, make good plans, and help
themselves and others meet the challenges of the future.
● But it can be easy to be engrossed to the present that we forget about
what lies ahead. Other times a mad rush to the future can go off track
due to all sorts of uncertainties and lack of familiar reference points.

● The trick is to blend the lessons of past experiences with future

aspirations, and with a willingness to adapt as new circumstances arise.

● No one knows for sure what the future holds. Even the best of plans
will have to be adjusted and changed at some point. We need to be
flexible, and the discipline to stay focused on goals even as
complications and problems arise.
Why and how manager plan?

● Planning set the stage for the others by providing a sense

of directions.
● It is a process of setting objectives and determining how
best to accomplish them.
● It involves deciding exactly what you want to
accomplish and how best to go about it.
Importance of Planning
● Planning creates a solid platform for the other management
functions. It helps with
organizing –allocating and arranging resources to accomplish
tasks
leading- guiding the efforts of human resources to ensure high
levels of task accomplishments
controlling- monitoring task accomplishments and taking
necessary corrective action.

● Good planning helps us become better at what we are doing

and to stay action oriented.
 Planning- to set the
direction
• Decide where you
want to go
• Decide how best to go
about it
Organizing- to Leading- to inspire
create structures effort
Controlling- to ensure
results
• Measure performance
• Take corrective
action

The role of planning and controlling in the management process

The Planning Process

1. Define your objectives.

2. Determine where you stand vis-à-vis objectives.
3. Develop premises regarding future conditions.
4. Analyze alternatives and make a plan.
5. Implement the plan and evaluate the results.
1. Define your objectives
Objectives and goals are specific results that one wishes to
achieve.
Identify desired outcomes or results in very specific ways.
Know where you want to go; be specific enough that you will
know you arrived when you get there.

2. Determine where you stand vis-à-vis objectives

Evaluate current accomplishments relative to the desired
results. Know where you stand in reaching the objectives;
know what strengths work in your favor and what weaknesses
may hold you back.
3. Develop premises regarding future conditions
Anticipate future events. Generate alternative
“scenarios” for what may happen; identify for each
scenario things that may help or hinder progress toward
your objectives.

4. Analyze alternatives and make a plan

A plan is a statement of intended means for
accomplishing objectives.
List and evaluate possible actions. Chooses the
alternative most likely to accomplish your objectives;
describe what must be done to follow the best course of
action.
5. Implement the plan and evaluate the results
Take action and carefully measure your progress toward
objectives. Follow through by doing what the plan requires;
evaluate results, take corrective action, and revise plans as
needed.

● Do not forget the action side of planning. The process should

always create a real and concrete plan.

● But plans alone do not deliver results; implemented plans

do.
● The best planning includes the active participation of
those people whose work efforts will eventually determine
whether or not the plans get put into action successfully.

● Planning is not something that managers do only on

occasion and while working alone in quiet rooms, free from
distractions, and at scheduled times.

● It is an on-going process done continuously while dealing

with an otherwise busy and demanding work setting.
Benefits of Planning
1. Planning improves focus and flexibility
● Good planning improves focus and flexibility, both oh which
are important for performance success. An organization with
focus knows what it does best, knows the needs of its
customers, and knows how to serve them well.
● An individual with focus knows where he or she wants to go in
a career or situation, and in life overall.
● An organization with flexibility is willing and able to change
and adapt to shifting circumstances without losing focus, and it
operates with an orientation towards the future rather than the
past.
2. Planning improves action orientation
● Planning focuses our attention on priorities and helps avoid
the complacency trap. Complacency trap is being carried along
by the flow of events.
● Planning keeps the future visible as a performance target and
reminds us that the best decisions are often those made before
events force problems upon us.

● Stephen R. Covey, a management consultant, says that good

planning makes managers more 1) results oriented- creating a
performance oriented sense of directions 2) priority oriented-
making sure the most important things get first attention 3)
advantage oriented- ensuring that all resources are used to
best advantage and 4) change oriented- anticipating problems
and opportunities so they can be best dealt with.
3. Planning improves coordination and control
● Planning improves coordination.
● The individuals, groups, and subsystems in organizations are
each doing many different things at the same time. But their
efforts must also be combined into meaningful contributions to
the organizations as a whole.
● Good plans help coordinate the activities of people and
subsystems so that their accomplishments advance performance
for the organization.
● When planning is done well, it facilitates control. The link
between planning and control begins when objectives and
standards are set. It makes easier to measure results and take
action to improve things.
● With both it is a lot easier to spot when things aren’t going well
and make the necessary adjustments.
Planning and Time Management

Daniel Vasella is CEO of Novartis and responsible for

operations spread across 140 countries. He is calendar-bound.
He says “I am locked in by meetings, travels and other
constraints.. I have to put down in priority things I like to
do.”

Kathleen Murphy is President of Fidelity Personal Investing.

She is also calendar bound, with conferences and travel
booked well ahead. Meetings can be scheduled at half-hour
intervals and work days can last 12 hours.
● These are common executive stories- tight schedules, little
time alone, lots of meetings and phone calls, and no room
for spontaneity.

● 77% of managers in one survey said that the new digital

age has increased the number of decisions they have to
make.
● 43% said there was less time available to make these
decisions.

● And who hasn’t complained or heard others complain

“there’s just not enough hours in the day to get everything
done”.
● Most of us have experienced the difficulties of balancing
available time with our many commitments and opportunities.
● But don’t you wonder the time you waste everyday? Texting, by
standing, talking with your friends for long hours. It is a waste to
let your friends dominate your time or misspent your time on
nonessential activities.
● The keys to success in such case management scenarios rest, in
part at least, with another benefit of good planning-time
management.
● In daily living and in management, it is important to distinguish
between things that you must do (top priority), should do (high
priority), would be nice to do ( low priority) and really don’t need
to do (no priority).
Personal Time Management Tips
1. Do say “no” to requests that divert you from what you really should be
doing.
2. Don’t get bogged down on details that you can address later or leave for
others.
3. Do have a system for screening telephone calls, e-mails and requests for
meetings.
4. Don’t let drop in visitors or instant messages use too much of your time.
5. Do prioritize what you will work on in terms of importance and urgency.
6. Don’t become calendar bound by letting others control your schedule.
7. Do follow priorities and work on the most important and urgent tasks
first.
Types of Plans Used by Managers
“ I am the master of my fate; I am the captain of my soul”

This lines are from Invictus, written by British poet William Earnest Henley in
1875. He was sending a message, one of confidence and control as he moves
forward into the future.

This worries a scholar by the name of Richard Levin, his response to Henley is:
“Not without a plan you’re not.”

Managers use a variety of plans as they face different challenges in

organizations. In some cases the planning environment is stable and quite
predictable; in others, it is more dynamic and uncertain.

Different needs call for different types of plans.

1. Long Range and Short Range Plans
Long-term plans looked 3 or more years into the future.
Short-term plans covers 1 year or less.

How far ahead we can really plan?

There is a lot less permanency to long term plans today and that they are
subject to frequent revisions.

But though the time frame of planning is shrinking, top management is still
responsible for setting long term plans and directions for the organization as
a whole. While lower management work on useful short term plans.
There is always a risk that the pressures of daily events will divert
attention from important tasks, if everyone do not understand the
organization’s long term plans and objectives.

This means that without long term direction people can end up working
hard and still not achieve significant results.

Elliot Jaques, management researcher, said that people vary in their

capability to think with different time horizons. His findings on Planning
Horizons is that
most people work comfortably with only 3 month time span
few people work well for 1 year span
very few people can handle a 20 year time frame
2. Strategic and tactical Plans
Strategic plans are focused on the organization as a whole or a major
component. These are long term plans that set broad action directions
and create a frame of reference in allocating resources for maximum
performance impact. Strategic plans set the goals and objectives needed
to accomplish the organization’s vision in terms of mission or purpose
and what it hopes to be in the future.

Tactical plans are developed an used to implement the strategic plans. It

specify how the organization’s resources can be used to put strategies
into action.
3. Operational Plans
Operational plan identifies short term activities to implement strategic
plans. It include both standing plans like policies and procedures that are
used over and over again, and single use plans like budgets that apply to
specific task or time period.

Policy is a standing plan that communicates broad guidelines for

decisions and action.

Procedures is a rule describing actions that are to be taken in specific

situations. Sometimes called SOP (standard operating procedures),
usually stated in handbooks.

Budget is a single use plan that commit resources for specific time
periods to activities, projects or programs
Planning Tools and Techniques
Planning delivers the most benefits when its
foundations are strong. The useful planning tools and
techniques are:
1. Forecasting
2. Contingency planning
3. Scenario planning
4. Benchmarking
5. Staff planning
1. Forecasting
Planning in business and our personal lives often involves
forecasting.
Forecasting is a process of predicting what will happen in
the future.
Example: 1. PAGASA is forecasting the weather.
2. Business Week reports forecast of industry
conditions, interest rates, unemployment
trends, national economies, etc.
 Qualitative forecasting, this uses expert opinions to
predict the future.
 Quantitative forecasting, this uses mathematical models
and statistical analyses of historical data and surveys to
predict future events.

Forecasts are useful but should be treated cautiously. They

are simply planning aid.
2. Contingency Planning
Contingency planning identifies alternative courses of
action to take when things go wrong.

Given the uncertainties of our day, contingency

planning is an indispensable tool for managerial and
personal planning.

Contingency planning cannot prevent crises, but when

things go wrong there’s nothing better to have in place
than good contingency plans.
3. Scenario Planning
Scenario planning involves identifying future scenarios
or states and then making plans to deal with each
scenario should it actually occur.
It is a long term version of contingency planning.

Scenario planning forces us to think far ahead and be

open to a lot of possibilities.
4. Benchmarking
Benchmarking is the use of external and internal
comparisons to plan for future improvements.

The purpose of benchmarking is to find out what other

people and organizations are doing very well, an then
plan how to incorporate these ideas into one’s own
operations.
It is basically learning from the successes of others.

One benchmarking technique is searching for best

practices.
 Internal benchmarking encourages members and work units to learn and
improve by sharing one another’s best practices.
 External benchmarking is learning from competitors and non-competitors
alike.

5. Staff Planning
Staff planning uses staff planners to help coordinate and energize planning.
Staff planners are experts in all steps of planning process as well as in the
use of planning tools and techniques.

They can bring focus and expertise to a variety of planning tasks.

Implementing Plans to Achieve Results
In a book entitled “Doing What Matters”, Jim Kilts, the
former CEO of Gillete, quotes an old adage: “In business,
words are words, promises are promises, but only
performance is reality.”

This quote applies to plans, plans are words and promises

attached. But these promises are only fulfilled when plans
are implemented so that their purposes are achieved.
The successful implementation of the plan begin with the
planning process of goal setting, goal alignment, and
participation and involvement.

1. Goal Setting
Goal setting is not an easy task to accomplish. The way
goals are set can make a difference in leading people to
the right directions and inspiring them to work hard.

There is a big difference of having “no goals”, or having

“average goals”, and having really “great goals”.
 Specific
Desired outcomes
are clear to
anyone

Attainable
Timely
Realistic,
Linked to specific
possible to
timetables and due
accomplish Great dates
Goals

Challenging
Include “stretch” Measurable
factor that moves Results can be
toward real gains measured
2. Goal Alignment
Mission and Purpose
Serve the world as the number one
supplier of recyclable food containers

Top Management Objective Firm

Deliver error free products meeting
customer requirements 100% of the time

Senior Management Objective

Manufacturing Division
100% on time production of error free
products

Middle Management Objective

Plant
Increase error free product
acceptance rate by 16%

Lower Management Objective Shift Supervisor

Assess machine operator skills and
train for error free production
3. Participation and Involvement
Participation and involvement are two core components in a
planning process.
Participatory planning includes the people who will be
affected by the plans and asked to help implement the plan
in all the planning steps.

Research should that when people participate in setting

goals they gain motivation to work hard to accomplish them.
Involving people goes a long way toward gaining their
commitments to work hard and support the implementation
of plans.
 Define
planning
objectives

Implement Determine where

Build commitments to
plans and things stand vis-
plans by allowing
evaluate à-vis objectives
others to participate
results
and be involved at all
steps in the planning
process

Identify action Develop premises

alternatives regarding future
and make conditions
plans

Role of Participation and Involvement in the Planning Process

Benefits of participatory planning approach
1. It can increase the creativity and information
available for planning.
2. It can increase the understanding and acceptance
of plans, as well as commitment to their success.
3. It can improve performance results by improving
both the quality of any plans and the effectiveness
of their implementation.
Thank You