Planning
The challenge of uncertainty in modern day life is met through planning.
3 types of uncertainty:
(a) State uncertainty
(b) Effect uncertainty
(c) Response uncertainty
Some definitions of Planning
Planning is a state of mind, a process, and a collection of procedures used to integrate
activities.
Plan your work and work your plan – an advice given to managers
Planning involves the evaluation of the past and present developments, the contemplation
and selection of the future conditions considered desirable for an organization–
and deciding answers to;
WHAT?
WHEN?
WHERE?
HOW?
BY WHOM?
The answer to above queries are necessary in order to attain the desired conditions during
a stipulated period of time.
Is planning a philosophy? – Planning is often linked to the process of looking ahead. A
concern for future effects of today’s actions. Planning involves a state of mind that
recognizes the need for orderliness and the value of direction.
Is planning a process of integration? Some people look at planning as a means to
provide a unifying structure to give a purposeful direction to the organizational units or
individuals involved in a given venture.
Is planning a collection of procedures? Some may consider planning as a means to
establish certain procedures which will be followed in achieving the goals and
objectives.
From the above general discussion we may come down to certain specific definitions and
concepts:
a) What is planning?
Planning is setting goals. It also involves choosing and thinking, and deciding what to
do.
b) Why planning is more important today?
○ more complex technology
○ narrower specialization
○ longer lead times True for all countries
○ larger investments
○ greater uncertainty
○ larger size of programmes
and especially in our country because,
○ Resource constraints need prioritization
○ Want to achieve in a short period what was achieved by others over a long
period
○ Poor quality of human resource
c) What is a plan?
A plan is a blueprint for action. It is a statement of objectives to be attained in the future
and an outline of the steps necessary to achieve them.
Time span of plans
Long-range planning – This determines organization strategy and
(Objectives, Missions, mission – Strategic planning, Perspective
Policies, Forecasting) planning
This determines – Quantity and Quality of
Intermediate range planning – inputs and outputs. Management has to
(Forecasting, Programming, follow the strategy and mission of long –
Establishing Procedures, range planning but can manipulate and
Budgeting) change inputs, outputs, people, material and
capital.
This involves scheduling of activities.
Short range planning – Management can manipulate the application
(Budgeting, Scheduling) of resources and technology in scheduling
specific activities.
The Hierarchy of Plans
Board of Directors Organization of mission and strategy
Top management Organization of continuing objectives
Middle management Organization of specific goals
Supervisors, Lower management Specific goals
Type and size of plans?
Depends on the type and size of organization
Plans - National/Sectoral
- Multinational (Business, Political)
Programmes - Corporation/Ministry
- Divisions/Departments
Projects - Enterprise/Specific geographic area
Elements of a Plan (Sub process of planning)
Setting objectives
Defining roles and missions
Policy making
Forecasting
Programming
Scheduling
Budgeting
Establishing procedures
Characteristics of a Plan
Flexible/Rigid
Comprehensive/Specific
Strategic/Tactical
Quantitative/Qualitative
Standing/Single use
The need for dreams
The key to planning is the determination of desires; and the critical aspect is
knowing where you want to be and how you want the future to turn out.
One needs to indulge in some wishful thinking! Some sort of wishful projection is
essential if planning is to be more than adhoc responses to present conditions.
However the dreams have to be a set of closely related aspirations – attainable
objectives.
Limitations and problems?
A plan is as good as the forecasts
A plan is for changes – and people resist changes
Sometimes expectations are unrealistic
Effective planning is a difficult task
Planning cost money
Planning vs Control
Planning is necessary in order to make controlling meaningful; controlling is maintaining
plan discipline.
Objectives and Goals
Management (for industrial and business enterprises) can have multiple objectives, e.g.
Profitability: Gross profit or net profit as a percentage of amount invested
Market: The fraction of the market captured compared to competitors
Resources: Protection of equipment; maintenance of buildings; Raw
Materials, Buildings, Inventory, Funds
Service: Timely service to customers, appropriate quality response to
customers/clients needs
Innovation: R&D on new products/services
Social service: Public responsibility: Improvement of environment, quality of
life
Other objectives which may be important to all organizations
Achievement of clarity and commitment to objectives
Integration of organizational and individual needs
Social Influence – distributing power and influence
Collaboration – control of conflict
Adaptation – responding appropriately to changes
Revitalization – dealing with growth and decay
Objectives do not have priorities, numbers or timeframe
Setting specific goals
For every objective one tries to set a goal, thus for example,
Objective Specific goal Performance indicator
Profit on Provide 15% return Net profits
investment
Capture an Retain 50% of old clients Number of persons placing
important Capture 50% new reorders No of persons
fraction of the placing new orders
market
Manufacture Improve productivity by 5% Number of pieces produced
goods divided by hours of labor
efficiently utilized – new machines
installed
Encourage high Improve morale by 15% Number of persons leaving;
employees Number of persons working
morale
Develop Send some managers for short Number of managers sent
management courses and successful completion of
cadre courses
Be socially Reduce air pollution by 15% Test stack gas and effluent
responsible
Provide a safe Reduce accidents by 20% Man-days lost due to injuries
workplace divided by total man-days
available
Inappropriate specific goals/How to determine appropriateness of goals/objectives
1. Relevance 8. Timeliness
2. Practicality 9. State of the art
3. Challenge 10. Contingencies
4. Measurability 11. Growth
5. Schedulability 12. Cost effectiveness
6. Balance 13. Market orientation
7. Flexibility 14. Accountability
Objectives may be
Immediate
Attainable
Visionary
