PLANNING

Planning is a critical managerial activity. It is the process of determining how the organization
can get where it wants to go. It is a primary function of management because all other functions
depend upon how the organization plans to achieve its objectives. Planning can be defined as
setting a goal and developing methods and means to achieve that goal. It consists of identifying
the purpose of a project, the activities to be performed, their sequence, and the resources
required to accomplish them. Planning bridges the gap from where we are to where we want to
go. Although we may not be able to predict the future and that some factors can be beyond our
control, failing to plan denotes that we are leaving things to chance. Infact it is said that failing to
plan is actually planning to fail. Planning is an intellectually demanding process, it requires that
we consciously determine courses of action and base our decisions on purpose, knowledge and
estimates.

Planning is particularly important because of scarce resources and te uncertain environment with
fierce competition for these resources. The basic purpose of planning is to reduce the risk of
uncertainties and initiate a coordinated effort within the organization for purpose of
organizational success. It also involves the process of preparing for change and dynamics of the
environment. Planning is the basic management functions.
Planning enables managers to organize resources effectively without plans managers may not be
able to achieve goals, because they can easily go a stray from the path with a plan one can easily
control and organize.
Planning is therefore basic and very crucial.

Planning has following characteristics:

 It is anticipatory in nature. It is forward looking.

 Planning is a system of decision making. It involves choices.
 It is focused on desired future results
 It is goal oriented
 Planning is directed towards efficiency. It aims at achieving goals in an efficient manner.
 It is the primary functions- planning is the basis of management process. All other
functions of management are designed to attain the goals set under planning. Planning
provides the basis for efficient organizing, staffing, directing and controlling.
 It is pervasive. Is sis a job of all managers in all types of organizations. Planning is an
essential ingredient in management at all executive levels. Managers at the top formulate
long terms goals fo the whole organization, middle level managers formulate
departmental and functional plans for medium term while lower levels formulate
operating and short term goals.
 It is an intellectual process involving imagination, foresight and sound judgment.
It is not guesswork or wishful thinking. It requires mental disposition of thinking
before doing and acting in the light of facts, rather than guesswork or intuition.
 It is a continuous process. It is ongoing and dynamic exercise. Old plans have to be
revised or new ones have t be formulated.
Organizations are managed using two types of plan; Strategic plans designed by top management
and which define the broad goals for the organizations. The second type is the operational plans,
which contain details for carrying out or implementing strategic plans in day-to-day activities.
God As A Master Planner
The creation story in Genesis presents God as a master planner who created the world from
nothing. God had a plan for each phenomena or object and it was placed in the right place in the
right order. God was able to finish his plan for creation in seven days and each day had its own
activity. He planed to have man in charge of his creation. Man was given responsibility to take
charge and he was answerable to God. We note that man failed to fulfill his tasks and
responsibility resulting in disruption of God’s plan for man. Man experience death as
consequence of his disobedience. God since failure of man has tried to make way or a plan to
restore the relationship between himself and man. He fulfilled his plan through his son Jesus.
That whoever beliefs in him will have eternal life, the original plan. God gave man the power of
intellect to be able to make plans and execute them. God has established systems where he works
through man. Man executes the wishes or the plans of God.
Types of plans
Planning can be classified on the basis of time, nature and use of plans.
1. Time based plans.
(a) Long term planning- covers between 5 to 20 years. This mainly responsibility of top
management. They are developed to guide future efforts of the organization.
(b) Medium term plans covers 2-4 years.
(c) Short term planning- covers one year.
2. Nature based plans
(a) Strategic planning- strategic planning is the process of determining overall objectives of the
organization and the policies and strategies adopted to achieve those objectives. Refers to the
process of formulating a unified, comprehensive and integrated plan relating the strategic
advantages of the firm to challenges in the environment. It involves appraising of external
environment in relations to the enterprises, identifying the strategies, to be adopted in the future
to achieve the objectives. They are formulated at the top level with involvement of the middle
and line managers. The following are some of the characteristics of strategic plans.
 Strategic planning identifies the opportunities and threats which the firm is likely to face
in future.
 It determines future direction of a company
 It defines the manner in which the resources of the are to deployed.
 It lays down the systematic and logical procedure for carrying out the operations of the
firm.
 It lays out a basis for formulation of operational plan.
 It facilitates coordination between the different divisions and departments of the
enterprise.
Examples of strategic plan include- vision, mission and objectives.
(b) Tactical planning- this is also referred to as operational planning. These are short term plans
designed to achieve the objectives in the strategic plans. This may cover one to two years.
( c) Functional planning- are prepare for various functional areas of business. Production
planning, marketing planning, financial planning, manpower planning.
(d) Contingency planning- Has become necessary in today’s rapidly changing business
environment. It is the determination of alternative courses of action to be taken if the original
plans are disrupted or become inappropriate due to changed circumstances. This normally
referred to as plan B. It is proactive in nature and the management tries to anticipate changes in
the environment and prepares to cope with the futures events. This is based on the premise that
the future is uncertain and therefore you have to take care of uncertainties. .
3. Based on use
Based on use we have the following plans:
(a) Standing or multi use plans. Theses are used repetitively. These include objectives,
procedures, and rules.
(b) Single use ad-hoc planning- single plan is used and then discarded. It is designed to meet the
demands of specific situation and is scrapped when the situation is over. This includes
programmes, budget, schedule and project.
.
Organizational plans can be classified into the following categories:
- Vision
- Missions
 - Objectives
- Strategies
- Policies
- Procedures
- Rules
- Programmes
- Budgets.

To some extant the plans are in a form of a hierarchy as indicated below.

Vision
Missions Management Board
Objectives

Strategies
Policies Top and Middle Managers

Procedures
Rules Middle and first line Managers
Programmes
Budges

Vision
It is a statement of a company’s ideal dream. It is an inspirational statement of an organizations
enduring purpose. Vision of Kabarak University, is to be a World Class Christian University.
Vision can be described as a dream plan.

Missions
This plan identifies the basic function or task of and enterprise or organization. Every
organization most has a mission that is assigned to it by society. The mission of University, is to
create, teach and store knowledge and provide extensions services.

Objectives
Objectives are the results to be achieved. They represent the end point of planning. objectives of
organizations are to make profit or provide a service. The objectives are should be SMART

Strategies
Strategy is a broad programme for defining and achieving an organization’s objectives. Strategy
comes from the Greek word strategeia, which means art or science of being a war general.
Generals in the Army were expected to come with a strategy to win a war. It is basically the
determination of the long-term goals and objectives of an organization and the adoption of
courses of action and allocation of resources necessary for carrying out these goals. The strategy
of the organizations is implemented or operationalized using policies procedures, programmes
and Budgets. The characteristics of strategy include:
 It provides guidelines to the enterprise for thinking and action.
 It involves in finding out a judicious combination of human and other resources to the
objectives of the organization.
 Its formulation involves taking into consideration external environment ( opportunities
and challenges) and internal environment, ( organizational resources and capabilities)
 As strategy depends on both external and internal factors which are not static. It has to be
adjusted to the changed circumstances. Hence, strategy is not static but dynamic.
 Because of the importance of strategy to the business concern, it is formulated by top
management.

Polices
Polices are plans and are general statements which guide or channel thinking in decision making
in the organization. Policies define on area within which a decision is to be made and ensure that
the decision will be consistent and contribute to the objective. Policies help to decide problems.
We have many kinds of policies across the management functions i.e. - Personnel policies
- Accounting policies
- Procurement policies
- Production policies
- Marketing policies
- Financial management policies
Charateristics of good policy:
 Should help in achieving the enterprise objectives.
 Should not be contradictory. There should not be inconsistency between any two policies
which may result in confusion and delay in action.
 There should be sound, logical, flexible should provide guide for thinking in future
planning and actions. Further, they should provide limits within which decisions have to
be made.
 Policies should reflect internal and external business environment.
 Policies should be in writing and the language of the policies should be understandable to
the persons who are supposed to implement them and those to be affected by them.
 It is a dynamic plan. Policy must be reviewed periodically and modified according to the
changed circumstances. It may be replaced by a new policy. Periodically review of the
policy makes it more adaptable and acceptable.
 It is a continuing decision. It remains in force and provides the answer to problems of
recurring nature till it is changed.
Procedures
Procedures are plans that establish a required method of handling activities in the organization.
They are guidelines to actions, rather than to thinking and they indicate exactly how activities in
organization will be accomplished. They can be described as the chronological sequences of
required action. Procedure of recruitment of an employee. Procedures operationalize the policy.
For example, a company may want to recruit MB graduates as managers. The procedures will
give details on how this will be done. Procedures are part of management planning and have the
following features:
 They are a guide to action
 They are generally meant for repetitive work so that some steps are followed every time
that activity is accomplished.
 Procedures are established in keeping with the objectives, policies and resources.
 They are concerned with established time sequence for work to be done.
Distinction between procedures and policies
 Policies are a guide to decision- making whereas procedures are a guide to action only.
 In case of policies, there is some room for interpretation and discretion but in case of
procedures, they are more rigid and specific there is no scope for discretion.
 While policies are part of strategies for the business concern, procedures are only
operational tools and guide to action only.
 While policies are basic things and are formulated by the top management, procedures
are generally based on policies and are established at lower level management.

Rules
Rules spell out specific required actions or non-actions. Rules can be part of a procedure and in
designed to represent thinking or does not allow donations. All applicants must produce original
documents during interviews.
Some rules operationalize policies – No Smoking rule comes from the organizations policy of
being a no-smoking Zone. This can be part of a policy to have health working environment for
employees.
Difference between policy and rules:
 Policy is general statement of a management decision while rule is a specific statement
telling the people what should or what should not be done.
 Policy is less specific type of standing plan while rule constitute the most specific type of
standing plan.
 Policy is flexible, while rule is rigid. In policy there exists certain exceptions while in
rules there are no exceptions.
 Policy gives some discretion to the executives concerned with its implementation. But
rules do not leave any scope of discretion.
Programmes
Programmes are complete with goals policies, procedures, rules, tasks assignments steps to be
employed and other elements necessary for a given course of action. They are normally
supported by a budget. It may be a specific program to improve the level of employee
motivation in organization. However, a major company expansion programme may have other
sub-programmes to support it, which may require a proper plan for coordination. A programme
could also involve development of a new product.
Budgets
A budget is a statement of expected results expressed in numerical terms. Budgeting is a
quantitative planning through which managers decide how to allocate available money to best
organizational goals. Money indicates where priorities of an organization are. Budget is a
language for communicating goals to others i.e. public safety etc. Budget is also control devices,
but making a budget is part of planning. The budget is a fundamental tool for planning and
indicates the sources and use of resources. Although a budget usually implements a programme it
may be a programme itself. A company, which has experienced financial constraints, may come
up with an elaborate budget control programme to control expenditure. Budgeting forces people
to plan.
- We have zero- based budgets
- Flexible budgets
- Programmed budgets.
Benefits of budgets
 It lays down enterprise goals and provides a basis for future course of action by the
management.
 It is time bound and helps in introducing definiteness in planning.
 By laying down attainable targets and prescribing means to achieve them, it provides the
right motivation to employees.
 Budgets, lay down objectives or targets and plans in numerical terms, facilitate the
verifiability of plans.
Schedules
A schedule specifies time within which activities are to be completed. Scheduling is the process
of establishing a time sequence for the work to be done. Schedules are essential for avoiding
delays and for ensuring continuity of operations. A schedule lays down a time-table fixing
starting and finishing dates for different activities.

While planning does not guarantee success in organizational objectives, there is evidence that
companies that engage in formal planning consistently perform better than those with none or
limited formal planning. Some of the reasons why planning is considered a vital managerial
function include
 Managers and employees put in greater effort when following a plan because plans have
a time planned for accomplishing tasks employees will be motivated to put in extra
efforts. It is better than telling employees to do their best.
 Planning leads to persistence. It encourages persistence.
 A plan provides direction. Planning helps direct effort towards achievement of set goals.
It puts focus on objectives. It clarifies and specifies objectives. Plans continually
reinforce the importance of these objectives by focusing on them. This ensures maximum
utility of managerial time and efforts.
 It encourages development of tasks strategies. If you have a plan, how is it going to be
achieved?.
 Creates unity of purpose. Since the objectives are formally expressed and methods and
procedures to obtain these objectives are clearly defined.
 Planning enhances motivation. If plans are properly communicated to all members of
organization, then every one can feel involved in carrying them out. When people are
involved, their sense of belonging increases and thus they become highly motivated.
 It guarantees success. Organizations with plans have greater profits and grow much
faster. There is no better way of enhancing organizational performance but by setting
goals. A number of empirical studies have shown that organizational success being a
function of planning that is measured by such factors as returns on investment, sales
volume and growth in earning per share.
  The growing complexity of modern business with rapid technological changes, dynamic
changes in consumer preferences and growing tough competition necessitates orderly
operations, not only in the current environment but also in the future environment. Since
planning takes a future outlook, it takes into account the possible future developments.
 Planning anticipates problems and uncertainties. A significant aspect of any formal plan
process is collection of relevant information for the purpose of forecasting the future as
accurately as possible. This would minimize the chances of haphazard decisions. Since
the future needs of the organization are anticipated in advance, the proper acquisition and
allocation of resources can be planned, thus minimizing wastage and ensuring optimal
utility of these resources.
 Planning is necessary to facilitate control. Control involves the continual analysis and
measurement of actual operations against the established standards. These standards are
set in the light of objectives to be achieved. Periodic reviews of operations can determine
whether the plans are being implemented correctly. Well developed plans can aid process
of control in two ways;
 It establishes a system of advance warning of possible deviations from
expected performance. Deviations in production, sales and profits may
come to light during periodic investigation and hence remedial action can
be taken before any harm is done.
 Contribution of planning to the control process is that it provides
quantitative data which would make easier to compare the actual
performance in quantitative terms, not only with the expectations of
organization but also with industry statistics or market forecast.
 Planning helps in decision making process. It serves as a basis of decision making about
future activities. It also helps managers make routine decisions about current activities
since the objectives, plans, policies; schedules and so on are clearly laid down. It reduces
hasty judgments and results in disciplined thinking.
 Proper planning results in effective utilization of resources, reduces unproductive work,
idle time for workers, full utilization of machines and people.
 Enable organization to manage change effectively.
 Leads to effective coordination of all interrelated activities. It helps to relate internal
conditions and processes to external events and forces.
 Facilitates delegation of authority to lower levels of management. It aids decentralization
of power and authority.
 It tackles increasing complexity in modern business. Modern business requires large
number of people, with specialization and different needs,, complex machines. Planning
helps deal with complex situations. For example, what is it that needs to be done, when it
is to be done, where it is to be done and how it is to be done.
 Avoids business failure. As planning involves selection of alternatives, setting objectives,
proper coordination, effective use of resources and effective management of change; this
reduces chances of failure.
 Enhances spirit of competition. Departments will set objectives and will copete in
achieving them, therefore leading to health competition in organization.

Challenges of plans.
It is not a panacea for all problems. It will not phase out all organizational problems. Some
people believe that planning can harm the organization in the following ways.
 It can impede change and prevent or slow needed adaptation. It can be a hindrance to
innovation and creativity. This is particularly so where there is routine plans. This can be
overcome by making plans flexible.
 It can create a false sense of certainty.
 Plans are sometimes detached from the plans. Most strategic planners. Most strategic
planners are the top managers yet the implementers are the middle and first line
managers.
 No ownership. Planning works better when the people developing the plan are
themselves involved in the process of executing the plan.
 It is time consuming. A god deal of time, energy and capital is involved in setting up the
planning machinery for the purpose of gathering and analyzing data. And testing of
various alternatives in order to select the one which is most appropriate.
 It requires a high level of intellectual capacity, with high imagination, analytical ability
and total commitment. In other words it is highly demanding.
 Plans may be influenced by external forces that beyond control of the planners. External
stringencies are difficult to predict. Sudden outbreak of war, government control, natural
calamities and many other factors are beyond control of management.
 Limitation of forecast- planning is based on forecasting and if reliable information data is
not available for making forecast, planning is sure to lose much of its value. The longer
the period of forecast the lesser will be the accuracy of planning.
 Leads to rigidity and inflexibility; planning implies srict adherence to pre-determined
policies, procedures and programmes. This restricts individual freedom, initiative and
desire for creativity.
 Psychological factors- psychological factors also limit the scope of planning. some
people consider present more important than future because present is certain. Such
persons are psychologically opposed to planning. but it should not be forgotten that
dynamic managers always look ahead.

Overcoming challenges
 Set clear-cut objectives- They should be SMART objectives
 Establish a management information system- All relevant data and facts should be
available to managers.
 Careful premising- this constitutes framework for planning. they are assumptions of what
is likely to happen in future.
 Dynamic managers- persons involved inplanning should be dynamic in outlook. They
must take required initiative to make business forecast and develop planning premises.
 Make resources available
 Need for flexibility- environment changes and therefore there is need for change.
 Undertake cost benefit analysis- the benefits of pallning should be more than the costs
involved.