NATURE AND CONCEPTS OF PLANNING
The Planning Function of Management
 It is the basic management function
which includes formulation of one or
more detailed plans to achieve
optimum balance of needs or demands
with the available resources.
 Planning is important in management
because it provides security and
organization to the company. •
 A manager needs to plan the
expectations and regulations that the
company needs.
 Planning (is also called forethought) is
the process of thinking about and
organizing the activities required to
achieve a desired goal.
 Planning is basic or primary function of
management.
 •Planning is the process of setting goal
and selecting best course of action to
reach the goal. It is looking ahead.
 •Planning is deciding in advance, what
to do, who is to do, how to do and
when to do.
 Planning bridge the gap between where
we are and where we want to go.
 •Planning provide target, they allocate
resources in a coordinate manner.
 •Planning also solve as standard for
control.
 •Planning is mental exercise and
intellectual process.
 •Planning may be long term and short
term.
 •Planning may be strategic, tactical and
operational.
TYPES OF PLANS
Strategic Plans
To best understand the relationship between
the different types of plans, let's start at the
top. Strategic plans are designed with the entire
organization in mind and begin with an
organization's mission. Top-level managers,
such as CEOs or presidents, will design and
execute strategic plans to paint a picture of the
desired future and long-term goals of the
organization. Essentially, strategic plans look
ahead to where the organization wants to be in
three, five, even ten years. Strategic plans,
provided by top-level managers, serve as the
framework for lower-level planning.
Tactical planning
for Martha might include things like testing a
new process in making pizzas that has been
proven to shorten the amount of time it takes
for prepping the pizza to be cooked or perhaps
looking into purchasing a better oven that can
speed up the amount of time it takes to cook a
pizza or even considering ways to better map
out delivery routes and drivers. As a tactical
planner, Martha needs to create a set of
calculated actions that take a shorter amount of
time and are narrower in scope than the
strategic plan is but still help to bring the
organization closer to the long-term goal.
Operational Plans
Operational plans sit at the bottom of the
totem pole; they are the plans that are made by
frontline, or low-level, managers. All
operational plans are focused on the specific
procedures and processes that occur within the
lowest levels of the organization. Managers
must plan the routine tasks of the department
using a high level of detail. Frank, the frontline
manager at Nino's Pizzeria, is responsible for
operational planning. Operational planning
activities for Frank would include things like
scheduling employees each week; assessing,
ordering and stocking inventory; creating a
monthly budget; developing a promotional
advertisement for the quarter to increase the
sales of a certain product (such as the Hawaiian
pizza) or outlining an employee's performance
goals for the year.
Operational plans can be either single-use or
ongoing plans. Single-use plans are those plans
that are intended to be used only once. They
include activities that would not be repeated
and often have an expiration. Creating a
monthly budget and developing a promotional
advertisement for the quarter to increase the
sales of a certain product are examples of how
Frank would utilize single-use planning.
Operational plans are made by low-level
managers. Ongoing plans are those plans that
are built to withstand the test of time. They are
created with the intent to be used several times
and undergo changes when necessary.
Contingency Plans
Even the best plans can fail, especially in today's
fast-paced, chaotic business environment, and
as such, it is important for managers at all levels
to engage in contingency planning. Contingency
plans allow a manager to be flexible and
changesavvy by providing an alternative course
of action, which can be implemented if and
when an original plan fails to produce the
anticipated result. Having a contingency plan
might seem like extra work, but much like a
reserve parachute when skydiving, it's better to
have it and not need it than to need it and not
have it.
Characteristics of Planning
1. Intellectual process: - Planning is
mental exercise and intellectual
process.
2. Future oriented: - Planning is always
future oriented.
3. Goal focused: - Planning aims to
achieve goal in future.
4. Pervasiveness of plan: - Planning is
needed at all level of management.
5. Increase efficiency: -Planning increase
efficiency. Planning aims to achieve goal
at low cost.
6. Decision making: - Planning and
decision making are interrelated.
Planning is selecting right course of
action to reach the goal.
Planning Priciples by John C.Maxwell
1) The Principle of Passion
When we're passionless, we
procrastinate on the plan or burnout
trying to execute it. With passion, we
approach our plans with excitement
and a sense of urgency. Passion gives
planning energy. Passion also gives
planning focus. As Tim Redmond says,
"There are many things that will catch
my eye, but there are only a few things
that will catch my heart. It is those I
consider to pursue." Passion narrows
our vision so that the plan dominates
our attention and distractions fade into
the background.
2) The Principle of Creativity
Of the seven planning principles, we
violate the principle of creativity the
most. By gravitating to concreteness,
 we sacrifice creativity. We settle for
what's easy to wrap our minds around,
and we neglect to wrestle with harder,
more difficult dilemmas. Leaders are
too busy doing to think and provide
ideas. Even the rare leaders who think
creatively often neglect to encourage
the people around them to do the
same. Consequently, a majority of
teams rely on one person for creative
thought and end up starved with good
ideas.
3) The Principle of Influence
When you prepare your plans, ask
yourself the question, "Am I able to
influence the resources needed to fulfill
my planning and mission?" To
accomplish your plan, you'll need
influence over people, finances, and
you schedule. The support of people,
especially other influencers, can make
or break your plan. Make a priority to
build relationships with them. In
particular, find the key to their lives by
learning what matters most to them. If
you continually add value to the
influencers around you in meaningful
ways, then you'll be more likely to
receive their assistance when you need
it.
4) The Principle of Priorities
Giving importance to the things you
have to do or deal with, or must be
done or dealt with before everything
else you have to do. You have no right,
nor any reason, to start planning your
life until you know what you're living for
and what you're willing to die for. It's
important to find your purpose so that
you run, not on the fast track, but on
your track. The key to a prioritized life is
concentration followed by elimination.
As Peter Drucker observed,
"Concentration is the key to economic
results. No other principle 4 of
effectiveness is violated as constantly
today as the basic principal of
concentration. Our motto seems to be,
let's do a little bit of everything." We
must cease to dabble in everything
before we can become excellent at
anything”.
5) The Principle of Flexibility
In leadership, be mentally prepared
that not everything will go according to
your plans. Then, when plans unfold
unexpectedly, you'll be prepared to see
new opportunities. Some of the best
things we received in life have been
surprises that we could never have
planned in advance. When plans go
awry, don't just stand there. By staying
in motion, you create movement. Be
resourceful enough to improvise when
circumstances push you off course.
6) The Principle of Timing
Most of the time, our decisions are
based on our emotional environment
rather than reality. When we're in the
valleys of life, we don't see clearly. Our
perspective is limited, and all we see
are the problems around us. In the
valleys we make decisions, not to better
ourselves, but to escape our problems.
Never make a major decision in the
valleys. Wait until you get to the peak
where you can see clearer and farther.
By reserving big choices for the peaks,
you'll avoid making rash decisions that
you’ll regret later.
7) The Principle of Teamwork 4. Flexibility of planning cannot be
A worthwhile plan ought to be bigger maintained when there are
than your abilities. You shouldn't be unforeseen changes in the
able to accomplish it alone. Each of us environment. - such as business
has areas of weakness, blind spots, and recession, change in the government
shortcomings. Unless we rely on a team policy, crop failure etc. When such
to help us, our plans succumb to our events take place, the original plan
personal limitations. A sign in Coach Bill loses its value and there is a need to
Parcells' office stated his philosophy draw up a fresh plan.
plainly, "Individuals play the game but 5. Another limiting factor in planning
teams win championships." What we
is the difficulty of formulating
can do alone pales in comparison to the
accurate premises. - Since these
potential we have when we work
premises are the background against
together.
which a set of plan is made, they
Barreries or Limitations of Planning necessarily deal with the future. Since
the future cannot be known with
1. Planning is an expensive and time accuracy, premising must be subject to
consuming process. -It involves a margin of error.
significant amount of money, energy 6. Planning may sometimes face
and also risk, without any assurance of people’s resistance to it. - In old,
the fulfillment of the organization’s established organizations, managers are
objectives. often frustrated in instituting a new
2. Planning sometimes restricts the plan simply by the unwillingness or
organization to the most rational inability of people to accept it.
and risk free opportunities. - It curbs
the initiative of the manager and forces
him to operate within the limits set by
it.
3. The scope of planning is said to be
limited in the case of organizations
with rapidly changing situations. -
For example, it is claimed that for
industries producing fashionable
articles or for industries engage in the
publication of textbooks, working on a
day-today basis is more economical
than plan basis.
PLANNING CONCEPTS AND STRATEGIES
Chapter Objectives
• Define planning.
• Why is there a need to plan in management?
• Importance of planning.
• Planning function.
• Define objectives and its kinds.
• Differentiate between strategic and tactical
planning (kinds of planning)
• Differentiate planning and strategic
management
• Discuss the planning process
• Discuss the planning hierarchy and roles for
managers
PLANNING
• It not only selects the objectives but
also develops policies, programs and
procedures to achieve the objectives.
• Planning is looking into the future
IMPORTANCE OF PLANNING
 It reduces uncertainty of future events
 It makes objectives clear and specific
 It brings economy in operations.
 It provides the basis of control
 It establishes unity and coordination
 Optimum utilization of available
resources
 It helps to control hasty decisions
 It is for the development of the
organization.

• Is the process of setting objectives to be

accomplished by an organization during
a future time period and deciding on KINDS OF PLANNING
the methods of reaching them.
1. Strategic planning
• In planning, managers attempts to
 is the type of planning that is
bridge the gap between where the
generally reserved for top-level
organization at the moment and where
managers since it involves the
he wants it to go. In advance, it answers
determination of overall
the WHO, WHAT, WHEN, WHY, and
direction. –
HOW of future actions.
 This concerns itself with issues
• Planning is a never-ending activity. The
such as the purpose of the
manager must examine plans regularly
organization, the major social,
and if necessary modify them in view of
political, and technological
new situations and variables.
influences which might seriously
• It integrates various activities of
affect its business.
organization
2. Tactical Planning
• It is an interdependent process which
 type of planning generally
coordinates the various business
reserved for the middle and lower
activities.
level managers.
• It requires considerable time form
 This primarily concerned with
implementation.
how to get, where the
organization wants to go.
  It is concern with determining
the tasks to be done, establishing
responsibilities and
accountabilities, setting
quantitative measures for each
tasks, implementing the planned
actions, and exercising controls.
PLANNING FUNCTION
 It consists of 3 major activites:
1. The manager must critically appraise
- All these three kinds of objectives should
the present position of his organization.
blend together and not be conflict so that it will
He must take a complete inventory and
contribute to the organizational realization of
attempt to realistically determine just
its PLANS and for the future success.
where his organization is at the
moment.
2. The manager must set objectives. He
must decide where his organization
must go.
3. The manager must develop a set of
plans to achieve these objectives.
OBJECTIVES
 Are clear-cut and carefully considered
statements designed to give an
organization and its members direction
and purpose.
 Goals, aims, purposes or missions are
commonly used interchangeably with
objectives.
KINDS OF OBJECTIVES
1. Organizational – deals with the
general direction and purposes of the
organization
2. Managerial – subordinate but directly
related to the organizational objectives
which identify the goals of particular
departments or organizational segment.
3. Individual – are personalized
objectives which outline what
individuals in the group are trying to
accomplish
STRATEGIC PLANNING & STRATEGIC
MANAGEMENT
1. STRATEGIC PLANNING
 is an organizational management
activity that is used to set
priorities, focus energy and
resources, strengthen operations,
ensure that employees and other
stakeholders are working toward
common goals, establish
 agreement around intended
outcomes/results, and assess and
adjust the organization’s direction
in response to a changing
environment.
2. STAREGIC PLAN
 is a document used to
communicate with the
organization, the organizations
goals, the actions needed to
achieve those goals and all of the
other critical elements developed
during the planning exercise.
3. STRATEGIC MANAGEMENT
 can be defined as the art and
science of formulating,
implementing, and evaluating
cross- functional decisions that
enable an organization to achieve
its objectives.
 Comprehensive collection of
ongoing activities and processes
that organizations use to
systematically coordinate and
align resources, actions with
missio,vision and strategy
throughout the organization.
 The strategic management
activities transform the static plan
into a system that provides
trategic performance feedback to
decision making and enables the
plan to evolve and grow as
requirements and other
circumstances change
 The process by which managers
of the firm analyze the internal
and external environment for the
purpose of formulating strategies
and allocating resources to
develop a competitive advantage
in an industry that allows for the
successful achievement of
organizational goals.
 It includes understanding the
strategic position of an
organization, making strategic
choices for the future and
managing strategy in action,
STEPS IN PLANNING
1. Establish Goals
 Identify specific company goal
 Overview of each goal including
the reasons for its selection And
the anticipated outcomes
2. Identify Resources
 Financial and human resources
projections
3. Establish Goal-Related Tasks
 Outlining tasks or activities
4. Prioritize Goals and Tasks
 Ordering objectives in terms of
their importance.
5. Create Assignments and Timelines
 consider the abilities of staff
members and the time
realistically to complete
assignments.
6. Establish Evaluation Methods
 through requesting a monthly
progress report from department
heads.
7. Identify Alternative Courses of
Action
 A management plan should
include a contingency plan if
certain aspects of the master plan
prove to be unattainable.
 MANAGEMENT LEVELS: A HIERARCHICAL
VIEW

 An organization can have many different

managers, across many different titles,
authority levels, and levels of the
management hierarchy.
 The three levels of management typically
found in an organization are low-level
management, middle-level management,
and top-level management.

 Top-level managers are responsible for

controlling and overseeing the entire
organization.

 Middle-level managers are responsible for

executing organizational plans which
comply with the company's policies. These
managers act at an intermediary between
top-level management and low-level
management.

 Low-level managers focus on controlling

and directing. They serve as role models for
the employees they supervise.