Management 1- Principles of Management

CHAPTER 3: PLANNING

DEFINITION OF PLANNING
Planning is a logical and systematic approach of formulating the objectives, programs, policies, procedures,
budgets, rules and regulations and other types of plans.
-considered the most basic of all managerial functions

THE NATURE OF PLANNING

1. Contribution to purpose and objectives 3. Planning as a function of all managers
2. Planning as the first basic function 4. Planning for efficient organization

MAJOR TYPES OF PLANS

1. Objectives or Goals 6. Procedures
2. Mission 7. Rules
3. Long Range and Short Range Objectives 8. Budget
9. Philosophy
4. Program
10. Strategy
5. Policies

BASIC STEPS IN BUSINESS PLANNING

1. Defined the business idea.
2. Establish goals and objectives.
3. Evaluate the ideas, goals, and objectives.
4. Forecast cash needs.
5. Identify sources of funds.
6. Write a business plan.

OTHER TYPES OF PLAN

1. Standing Plans- serve as guidelines to managerial action.
2. Single-use Plans – designed for a specific purpose or period.
3. Long-range Plans- the strategic plans of the organization.
4. Intermediate Plans- follow one long-range plans are formulated.
5. Short-range Plans- provide the guidelines for day to day action in the organization.
6. Marketing Plans- to increase their present market share and develop new product.
7. Production Plans- producing the desired amount of goods demanded at the market place.
8. Financial Plans- a quantitative basis for decision making and control.
9. Manpower Plans- systematic way of determining the types personnel needed in the long and short range
of an organizing.
10. Strategic Plans- determining the major goals of the entire organization and the policies to achievement
of these goals.
11. Tactical Plans- deals with the determination of the term- specific utilization of the resources of the
organization in achieving its strategic goals.
12. Functional Plans- often classified by function or use.
DECISION MAKING
-The process of choosing a specific procedure or course of action from among several alternatives.
The Decision Making Process
Step 1 Set Objectives
Step 2 Identify Constraints
Step 3 Identify Alternatives
Step 4 Gather Appropriate Information
Step 5 Evaluate Alternatives
Step 6 Choose the Acceptable Alternative

PLANNING TECHNIQUES AND TOOLS

1. Forecasting- This is an attempt to foretell or predict future trends, or condition from known data and
prepare for the expected change in business.
2. Break-even analysis- dealing with control functions.
3. Scheduling –use for planning time for various activities is an organization.
4. Management by objectives- An approach to management designed at cross purpose, or indeed, for no
purpose at all.

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 of objective and goals.
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 principles of limiting factor.
10. Lack of top management support.
11. Lack of clear delegation
12. Lack of adequate control techniques and information.