Planning Process and Structure

HOW DOES PLANNING PROCESS WORK

Planning is the first primary function of management that precedes all other functions. The
planning function involves the decision of what to do and how it is to be done?
Planning Process
The planning process is the steps a company takes to develop budgets to guide its future
activities. The documents developed may include:

 Strategic plans (long-range, high-level company goals)

 Tactical plans (shorter-term, specific plans to work toward goals in the strategic plan)
 Operating plans (detailed plans for a specific department to implement)
 Project plans (plans to implement projects such as
launching new products or building a new plant)

The planning function of management is one of the most

crucial ones. It involves setting the goals of the company
and then managing the resources to achieve such goals.
As you can imagine it is a systematic process involving
eight well thought out steps.

An important part of the planning process is to be aware

of the business opportunities in the firm’s
external environment as well as within the firm

Setting Objectives
This is the second and perhaps the most important step
of the planning process. Here we establish the objectives for the whole organization and also
individual departments. Objectives can be long term and short term as well. Here we come up
with a list of required tasks to meet the objectives defined.

Identifying Alternatives
The fourth step of the planning process is to identify the alternatives available to the
managers. Maybe he chooses an innovative alternative hoping for more efficient results. If he
does not want to experiment he will stick to the more routine course of action.
Examining Alternate Course of Action
The next step of the planning process is to evaluate and closely examine each of the
alternative plans. Every option will go through an examination where all there pros and cons
will be weighed.
Selecting the Alternative
Finally, we reach the decision making stage of the planning process. Now the best and most
feasible plan will be chosen to be implemented. The ideal plan is the most profitable one with
the least amount of negative consequences and is also adaptable to dynamic situations.
Sometimes a few different aspects of different plans are combined to come up with the one
ideal plan.

Formulating Supporting Plan

Once you have chosen the plan to be implemented, managers will have to come up with one or
more supporting plans. These secondary plans help with the implementation of the main plan.
Implementation of Plan
And finally, we come to the last step of the planning process, implementation of the plan. This
is when all the other functions of management come into play and the plan is put into action
to achieve the objectives of the organization.

TYPES OF PLANNING
PLAN:
Planning is about managing resources and priorities in an organized way,” Berry says.
“Management is related to leadership, and it’s related to productivity.”
If companies improve how they plan, managing and leadership will also improve. The
following steps can help businesses plan better.
Devise a Plan:
Write important details down and focus on strengths, what matters, what people are most
important to you and what you can do for them. This will help you communicate your
vision to your employees.
Define Success:
How do you see your business in several years? Define long-term goals and be specific.
Establish milestones for certain goals and who will achieve the goals. Look at what drives
your business; it may be presentations, conversions, page views or something else. Then
establish a review schedule and re-examine your long-term goals as necessary.
 Put It in Motion:
Track and analyze numbers to help you manage the work behind the numbers. You’ll be
better able to make changes — or to develop new plans — that will help you manage
better.

THERE ARE FOUR TYPES OF PLANS:

NO: 01 Operational Planning:
“Operational plans are about how things need to happen,” motivational leadership speaker
Mack Story said at LinkedIn. “Guidelines of how to accomplish the mission are set.”
This type of planning typically describes the day-to-day running of the company.
Operational plans are often described as single use plans or ongoing plans. Single use plans
are created for events and activities with a single occurrence (such as a single marketing
campaign). Ongoing plans include policies for approaching problems, rules for specific
regulations and procedures for a step-by-step process for accomplishing particular
objectives.

NO: O2 Strategic Planning:

“Strategic plans are all about why things need to happen,” Story said. “It’s big picture, long-
term thinking. It starts at the highest level with defining a mission and casting a vision.”
Strategic planning includes a high-level overview of the entire business. It’s the foundational
basis of the organization and will dictate long-term decisions. The scope of strategic planning
can be anywhere from the next two years to the next 10 years. Important components of a
strategic plan are vision, mission and values.
NO: 03 Tactical Planning:
“Tactical plans are about what is going to happen,” Story said. “Basically at the tactical level,
there are many focused, specific, and short-term plans, where the actual work is being
done, that support the high-level strategic plans.”
Tactical planning supports strategic planning. It includes tactics that the organization plans
to use to achieve what’s outlined in the strategic plan. Often, the scope is less than one year
and breaks down the strategic plan into actionable chunks. Tactical planning is different
from operational planning in that tactical plans ask specific questions about what needs to
happen to accomplish a strategic goal; operational plans ask how the organization will
generally do something to accomplish the company’s mission.
NO: 04 Contingency Planning:
Contingency plans are made when something unexpected happens or when something
needs to be changed. Business experts sometimes refer to these plans as a special type of
planning.
Contingency planning can be helpful in circumstances that call for a change. Although
managers should anticipate changes when engaged in any of the primary types of planning,
contingency planning is essential in moments when changes can’t be foreseen. As the
business world becomes more complicated, contingency planning becomes more important
to engage in and understand.

Organization Structure
Organization
Max Weber 1920s (father of organizational theory).
Define as a formally constituted group of people who have identified tasks and who work
together to achieve a specific purpose defined by the organization.
Organization Structure
Organizational structure refers to the way in which a group of people is formed, its lines of
communication and its means for channeling authority and making decisions.
An organizational structure defines how activities such as task allocation, coordination, and
supervision are directed toward the achievement of organizational aims. Organizational
structure affects organizational action and provides the foundation on which standard
operating procedures routines rest.
Organization structure chart
1. An organization chart can help in identify roles and expectations.
2. Manager who understands an organization’s structure and relationship will be able
to expedite decision and have a greater understanding of the organizational
environment.
Formal and informal structure
Formal: Through departmentalization and work division, provides a framework for
defining managerial authority, responsibility, and work division.
Informal structure: is generally social, with blurred or shifting lines of authority and
accountability.
Characteristics
There must be a clear division of labor (work must be divided into units).
A well-defined hierarchy of authority must exist.
There must be impersonal rules and impersonality of interpersonal relationships.
A system of procedures for dealing with the work situation.
A system of rules covering the right of each position.
Selection and promotion is based on technical competence.
Advantages Disadvantages
 Map lines of decision-making. 1. Show only formal relationships.
 Help people understand assignments. 2. Does not degree of authority
Reveals to managers how they fit in 3. My show things as they suppose
the organization. to be rather than as they are
 Contribute to sound organization structure. 4. Possible exists of confusing
 Show formal line of communication. authority with status.

Need for development for your

organization
1. Continuous improvement:
Companies that engage in organizational development commit to continually improving
their business and offerings. The OD process creates a continuous
cycle of improvement whereby strategies are planned, implemented, evaluated,
improved and monitored.
Organizational development is a proactive approach that embraces change (internal and
external) and leverages it for renewal.

2. Increased communication:
One of the key advantages to OD is increased communication, feedback and interaction
within the organization. The goal of improving communication is to align all employees
to shared company goals and values.
Candid communication also leads to increased understanding
of the need for change within the organization. Communication is
open across all levels of the organization and relevant feedback is recurrently shared
 for improvement.

3. Employee development:
Organizational development focuses on increased communication to influence
employees to bring about desired changes. The need for employee development stems
from constant industry and market changes. This causes an organization to regularly
enhance employee skills to meet evolving market requirements.
This is achieved through a program of learning, training, skills/competency enhancement
and work process improvements.

Product & service enhancement:

A major benefit of OD is innovation, which leads to product and service
enhancement. Innovation is achieved through employee development, which focuses on
rewarding successes and boosting motivation and morale. In this scenario, employee
engagement is high leading to
increased creativity and innovation. Organizational development also increases product
innovation by using competitive analysis, market research and consumer expectations and
preferences.

Increased profit:
Organizational development affects the bottom line in a variety of ways. Through raised
innovation and productivity, efficiency and profits are increased. Costs are also reduced by
minimizing employee
turnover and absenteeism. As OD aligns objectives and focuses on development,
product/service quality and employee satisfaction are increased. The culture shift to one of
continuous improvement gives the company a distinct advantage in the competitive
marketplace.