CHAPTER 3 PLANNING

I. Planning: An Introduction

A. The Nature of Planning

1. Benefits of Planning

B. The Planning Process

1. Steps in the Planning Process

2. Reasons why Managers fail in Planning

C. General Types of Plans

1. Types of Plans

2. Planning Techniques and Tools

3. Management by Objectives

II. Decision – Making

A. Nature of Decision – making

1. The Importance of Information in Decision – Making

a. Characteristics of “Good” Information

2. The Role of Management Information Systems (MIS) in Decision – Making

3. The Role of Managers as Information Processors for efficient Decision – Making

B. Types of Problems and Decisions

1. Types of Problems

2. Types of Decisions

3. Six Rules for Crisis Management

C. The Decision – making Environments

D. The Decision – making Process

CHAPTER 3 PLANNING
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I. Planning: An Introduction

A. The Nature of Planning

Planning is the logical and systematic approach of formulating the objectives, programs, policies,
procedures, budgets, rules and regulations, and other types of plans. Planning is considered the most basic of all
managerial functions (organizing, staffing, directing and controlling).

Without this basic function, the other four functions of the manager cannot be tackled efficiently and
effectively. Therefore, a manager organizes, staffs, directs and controls in order to guarantee the attainment of
objectives and the other types of plans made.

There are four major factors that summarize the essential nature of planning. These are:

1. Contribution to purpose and objectives.

2. Planning as the first basic function

3. Planning as a function of all managers

4. Planning for efficient organization

Benefits of Planning

1. Planning improves Focus and Flexibility

2. Planning improves Action Orientation

3. Planning improves Coordination

4. Planning improves Time Management

5. Planning improves Control

B. The Planning Process

The six Steps in the Planning Process are:

1. Define your Objectives

2. Determine where you stand on issues concerning the Objectives

3. Develop premises regarding future conditions

4. Analyze and choose among action alternatives

5. Implement the plan

6. Evaluate the results

Reasons why Managers Fail in Planning

1. Lack of real commitment in planning

2. Interchanging planning studies with plans

3. Failure to develop and implement sound strategies

4. Lack of meaningful objectives and goals

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 5. Tendency to underestimate the importance of planning premises

6. Failure to see the scope of plans

7. Failure to see planning as a rational process

8. Too much reliance on experience

9. Failure to use the principle of limiting factor

10. Lack of top management support

11. Lack of clear delegation

12. Lack of adequate control techniques and information

C. General Types of Plans

Programs, Strategies, Tactics and Operational Plan

Budgeting

Policies:

Procedures

Rules

Accountability

Philosophy

Projects

Standing Plans

Single-use Plans

Functional Plans:

Marketing Plans

Production Plans

Financial Plans

Manpower Plans

Time Horizon – Based Plans:

Short-range Plans

Intermediate-range Plans

Long-range Plans

Planning Tools and Techniques

1. Forecasting

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 a. Non – Quantitative Means

b. Quantitative Means

2. Contingency Planning

3. Scenario Planning

4. Benchmarking

5. Staff Planners

6. Participation and Involvement

Management by Objectives (MBO)

II. Decision – Making

A. Nature of Decision – making

The Importance of Information in Decision – Making

Characteristics of “Good” Information

1. Timely

2. High – Quality

3. Complete

4. Relevant

5. Understandable

The Role of Management Information Systems (MIS) in Decision – Making

The Role of Managers as Information Processors for efficient Decision – Making

Types of Decisions:

B. Types of Problems and Decisions

Types of Problems

Structured Problems

Unstructured Problems

Crisis

Types of Decisions

Programmed Decision

Non-programmed Decision

Crisis Management

Classical Decision – Model

Optimizing Decision

Behavioral Decision

Satisficing Decision
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 Six Rules for Crisis Management

1. Figure out what is going on

2. Remember that speed matters

3. Remember that Timing matters too

4. Respect the Danger of the Unfamiliar

5. Value the Skeptic

6. Be ready to “fight fire with fire”

C. The Decision – making Environments

1. Decision-making at Certainty

2. Decision-making with Uncertainty

3. Decision-making at Risk

D. The Decision – making Process

Steps in the Decision – Making Process

1. Identify and Define the Problem

2. Generate and Evaluate Alternative Courses of Action

Evaluating the Alternative may be done through consideration of the following:

a. advantages and disadvantages of each

b. conducting a SWOT analysis of each

c. Meeting the following criteria:

1. Benefits

2. Costs

3. Timeliness

4. Acceptability / Feasibility

5. Ethical Soundness

3. Decide on a preferred Course of Action

4. Implement the Decision

5. Evaluate the Results