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The process of management involves planning, organizing, leading, and controlling the use of

resources to accomplish performance goals. The first of these four functions, planning, sets the

stage for the others by providing a sense of direction. It is a process of setting objectives and

determining how best to accomplish them. Said a bit differently, planning involves deciding

exactly what you want to accomplish and how best to go about it. Planning involves defining the

organization¶s goals, establishing an overall strategy for achieving these goals, and developing a

comprehensive set of plans to integrate and coordinate organizational work. The term planning

as used in this chapter refers to formal planning. The quality of the planning process and

appropriate implementation probably contribute more to high performance than does the extent

of planning. Planning as just described is an application of the decision making process. It is a

systematic way to approach two important tasks: setting performance objectives, and deciding

how best to achieve them. But remember, planning is not something managers do while working

alone in quite rooms, free from distractions, and at scheduled times. It is an ongoing process,

often continuously being done even while dealing with an otherwise busy and demanding work

setting. And like other decision making, the best planning is done with active participation of

those people whose work will eventually determine whether or not the plans are well

implemented and the objectives are accomplished.

 



hSetting goals and choosing the means to achieve these goals, Chalking out a plan of action i.e.
results envisaged, the line of action to be followed, the stages to go through and methods to use.´

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‡? Primary function of management

‡? It is an intellectual process

‡? Focuses on determining the objectives

‡? Involves choice and decision making

‡? It is a continuous process

‡? It is a pervasive function

 

 

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The benefits of planning are best realized when the foundations are strong. Among the useful

tools and techniques of managerial planning are forecasting, contingency planning, scenarios,

benchmarking, participative planning, and the use of staff planners.

FORECASTING

Forecasting is the process of predicting what will happen in the future. All plans involve

forecasts of some sort. Periodicals such as ¢


?

? ?and the 
?regularly

report forecasts of economic conditions, interest rates, unemployment, and trade deficits, among

other issues. Some are based on     ?
?which uses expert opinions to predict the

future. Others involve     ? 
 which uses mathematical models and statistical

analyses of historical data and surveys to predict future events.


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Planning by definition, involves thinking ahead. But the more uncertain the planning

environment, the more likely that one¶s original assumptions, forecasts, and intentions may

prove inadequate or wrong. Contingency planning identifies alternative courses of action that can

be implemented to meet the needs of changing circumstances. Although one can¶t always predict

when things will go wrong, it can be anticipated that they will. It is highly unlikely that any plan

will ever be perfect; changes in the environment will sooner or later occur, as will crises and

emergencies. And when they do, the best managers and organizations have contingency plans

ready to be implemented. Contingency plans contain htrigger points´ that indicate when

preselected alternative plans should be activated.

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A long-term version of contingency planning, called scenario planning, involves identifying

several alternative future scenarios or states of affairs that may occur. Plans are then made to

deal with each should it actually happen.

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All too often planners becomes too comfortable with the ways things are going and

overconfident that the past is a good indicator of the future. It is often better to keep challenging

the status quo and not simply accept things as they are. One way to do this is through

benchmarking, the use of external comparisons to better evaluate one¶s current performance and

identify possible actions for the future.

The purpose of benchmarking is to find out what other people and organizations are doing very

well, and then plan how to incorporate these ideas into one¶s own operations. One benchmarking

technique is to search for best practices, thing people and organizations do that help them

achieve superior performance. Well-run organizations emphasize internal benchmarking that

encourages all members and work units to learn and improve by sharing one another¶s best

practices. They also use external benchmarking to learn from competitors and non competitors

alike.


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As organizations grow, there is a corresponding need to increase the sophistication of the

planning system itself. In some cases, staff planners are employed to help coordinate planning

for the organization as a whole or for one of its major components. These planning specialists are
skilled in all steps of the planning process, as well as with planning tools and techniques. They

can help bring focus and energy to accomplish important, often strategic, planning tasks. But one

risk is a tendency for a communication hgap´ to develop between staff planners and line

manager. Unless everyone works closely together, the resulting plans may be inadequate, and

people may lack commitment to implement the plans no matter how good they are.


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hParticipation´ is a key word in the planning process. Participatory planning includes in all

planning steps the people who will be affected by the plans and/or who will be asked to help

implement them. Participation can increase the creativity and information available for planning.

It can also increase the understanding and acceptance of plans, as well as commitment to their

success. And even though participatory planning takes more time, it can improve results by

improving implementation.
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When planning is done well, it creates a solid platform for the other management functions:

organizing ± allocating and arranging resources to accomplish tasks; leading- guiding the efforts

of human resources to ensure high levels of tasks accomplishment; and controlling ± monitoring

tasks accomplishments and taking necessary corrective action. The centrality of planning in

management is important to understand. In today¶s demanding organizational and career

environments it is essential to stay one step ahead of the competition. This involves always

striving to become better at what you are doing and to be action oriented.
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Organizations in today¶s dynamic times are facing pressures from many sources. Externally,

these include ethical expectations, government regulations, uncertainties of a global economy,

changing technologies, and the sheer cost of investments in labor, capital, and other supporting

resources. Internally, they include the quest for operating efficiencies, new structures and

technologies, alternative work arrangements, greater diversity in the work-place, and related

managerial challenges. As you would expect, planning in such conditions offers a number of

benefits.


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Good planning improves focus and flexibility, both of which are important for performance

success. An   ?
?knows what it does best, knows the needs of its customers,

and knows how to serve them well. An   ? ?
?knows where he or she wants to go

in a career or situation, and in life overall. An  ? ?    is willing and able to

change and adapt to shifting circumstances, and operates with an orientation toward the future

rather than the past. An   ? ?    adjusts career plans to fit new and developing

opportunities.


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Planning is a way for people and organizations to stay ahead of the competition and become

better at what they are doing. It helps avoid the  ?  simply being carried along by

the flow of events. It 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.

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Planning improves coordination. The different individuals, groups, and subsystems in

organizations are doing many different things at the same time. But even as they pursue their

specific tasks and objectives, their accomplishments must add up to meaningful contributions to

the organization as a whole. Good planning throughout an organization creates a 

?

 or hierarchy of objectives in which lower-level objectives lead to the accomplishment of

higher-level ones. Higher-level objectives as 
are directly tied to lower-level objectives as

the 
for their accomplishment.


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One of the side benefits that planning offers is better time management. Lewis Platt, former

chairman of Hewlett-Packard, says: hBasically, the whole day is a series of choices.´ These

choices have to be made in ways that allocate your time to the most important priorities. Platt

says that he was hruthless about priorities´ and that you hhave to continually work to optimize

your time.´

Most of us have experienced the difficulties of balancing available time with the many

commitments and opportunities we would like to fulfil. It is easy to lose track of time and fall

prey to what consultants identify as htime wasters.´ Too many of us allow our time to be

dominated by other people and/or by nonessential activities. hTo do´ lists can help, but they have

to contain the right things. In daily living and in management, it is important to distinguish

between things that you 
?  (top priority),?
 ? ? (high priority), would be ? ? 

(low priority), and really  ?? ? (no priority).


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When planning is done well, it facilitates control, making it easier to measure performance

results and take action to improve things necessary. Planning helps make this possible by

defining the objectives along with the specific actions through which they are to be pursued. If

results are less than expected, either the objectives or the actions being taken, or both, can be

evaluated and adjusted. In this way planning and controlling work closely together in the

management process. Without planning, control lacks objectives and standards for measuring

how well things are going and what could be done to make them go better. Without control,

planning lacks the follow-through needed to ensure that things work out as planned.
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In the planning process, objectives identify the specific results or desired outcomes that one

intends to achieve. The plan is a statement of action steps to be taken in order to accomplish the

objectives. Five steps in the planning process are:

1.? 
 (  
) Identify desired outcomes or results in very specific ways.

Know where you want to go; be specific enough that you will know you have arrived

when you get there, or know how far off the mark you are at various points along the

way.

2.? $
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) Evaluate current accomplishments

relative to the desired results. Know where you stand in reaching objectives; know what

strengths work in your favour and what weaknesses may hold you back.

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) Anticipate future events; Generates

alternative hscenarios´ for what may happen; identify for each scenario things that may

help or hinder progress toward your objectives.

4.? (- & +  $  

 
) List and carefully evaluate possible

actions. Choose the alternative(s) most likely to accomplish your objectives; describe

step-by-step what must be done to follow the chosen course of action.

5.? c$%$ + % &  ) Take action and carefully measure your

progress towards objectives. Do what the plan requires, evaluate results, take corrective

action, and revise plans as needed.


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Managers face many different planning challenges in the flow and pace of activities in

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

is more dynamic and uncertain. A variety of plans are used to meet these different needs.

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A rule of thumb is that short-range plans cover 1 year or less, intermediate range plans cover 1 to

2 years, and long range plans look 3 or more years into the future. Top management is most

likely to be involved in setting long-range plans and directions for the organization as a whole,

while lower management levels focus more on short-run plans that help achieve long-term

objectives. Unless everyone understands an organization¶s long-term plans, there is always risk

that the pressure of daily events will create confusion and divert attention from important tasks.

In other words, without a sense of long-term direction, people can end up working hard but

without achieving significant results.


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Plans differ not only in time horizons but also in scope. Strategic plans set broad, comprehensive,

and longer-term action directions. Strategic planning by top management involves determining

objectives for the entire organization, describing what and where it wants to be in the

future.Operational plans define what needs to be done in specific functions or work units to

implement strategic plans. Typical operational plans for a business firm include   ? 
?

? dealing with the methods and technology needed by people in their work;  ?  
? ?
dealing with money required to support various operations;   
?  
? ? dealing with

facilities and work layouts;  ?  
? ? dealing with the requirements of selling and

distributing goods or services; and  ? 
 ?  
? ? dealing with the recruitment,

selection, and placement of people into various jobs.

 

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Among the many plans in organizations,
?  
? in the form of organizational policies

and procedures are designed for use over and over again. A policy communicates broad

guidelines for making decisions and taking action in specific circumstances. For example, typical

human resource policies address such matters as employee hiring, termination, performance

appraisals, pay increases, promotions, and discipline.

Rules or procedures describe exactly what actions are to be taken in specific situations. They are

often found stated in employee handbooks or manuals as hSOPs´ ± standard operating

procedures. Whereas a policy sets a broad guideline for action, procedures define precise actions

to be taken.

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In contrast to standing plans,
 
? 
are used once, serving the needs and objectives of

well-defined situations in a timely manner. Budgets are single-use plans that commit resources to

activities, projects, or programs. They are powerful tools that allocate scarce resources among

multiple and often competing uses. Most managers bargain for adequate budgets to support the

needs of their work units or teams. They are also expected to achieve performance objectives

while keeping within the allocated budget.

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The decision-making process involves a set of activities that begins with identification of a

problem, includes making a decision, and ends with the evaluation of results. The steps in

managerial decision making are (1) identify and define the problem, (2) generate and evaluate

alternative solutions, (3) choose a preferred course of action and conduct the hethics double

check,´ (4) implement the decision, and (5) evaluate results. All five steps can be understood in

the context of the following short-but-true case.


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The first step in decision making is to find and define the problem. This is a stage of information

gathering, information processing, and deliberation. It is important to clarify goals by identifying

exactly what a decision should accomplish. The more specific the goals, the easier it is to

evaluate results after the decision is actually implemented. The way a problem is defined can

have a major on how it is resolved.


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Once the problem is defined, it is time to assemble the facts and information that will be helpful

for problem solving. It is important here to clarify exactly what is known and what needs to be

known. Extensive information gathering should identify alternative courses of action, as well

anticipated consequences.

The process of evaluating alternatives often benefits from
 ? 

 Key stakeholders

in the problem should be identified, and the effects of possible courses of action on each of them

should be considered. Another useful approach for the evaluation of alternatives is a cost-benefit
analysis, the comparison of what an alternative will cost in relation to the expected benefits. At a

minimum, the benefits of an alternative should be greater than its costs. Typical criteria for

evaluating alternatives include the following:

˜? ¢
? What are the hbenefits´ of using the alternative to solve a performance

deficiency or take advantage of an opportunity?

˜? p

 What are the hcosts´ of implementing the alternative, including resource

investments as well as potential negative side effects?

˜?  

 How fast will the benefits occur and a positive impact be achieved?

˜? þ    To what extent will the alternative be accepted and supported by those

who must work with it?

˜?   ?
 

 How well does the alternative meet acceptable ethical criteria in the

eyes of the various stakeholders?


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This is the point of choice, where an actual decision is made to select a preferred course of

action. Just how this is done and by whom must be successfully resolved in each problem

situation.

The classical decision model views the manager as acting rationally in a certain world. Here, the

manager faces a clearly defined problem and knows all possible action alternatives as well as

their consequences. As a result, he or she makes an optimizing decision that gives the absolute

best solution to the problem. The classical approach is a rational model that assumes perfect

information is available for decision making. The behavioural decision model, accordingly,
assumes that people act only in terms of what they perceive about a given situation. Because

such perceptions are frequently imperfect, the decision maker has only partial knowledge about

the available action alternatives and their consequences. Consequently, the first alternative that

appears give a satisfactory resolution of the problem is likely to be chosen.


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Once a preferred solution is chosen, actions must be taken to fully implement it. Nothing new

can or will happen unless action is taken to actually solve the problem. Managers not only need

the determination and creativity to arrive at a decision, they also need the ability and willingness

to implement it.