AOM

Advance Organization &

Management

LESSON 2
Planning (Weeks 8 and 9)

Topics in the Lesson

I. Planning in the Organization
II. The Planning Process
III. Types of Plan

Lesson’s Intended Learning Outcomes

At the end of the lesson, you will be able to:

1. describe the nature of planning;

2. contrast planning functions at various management levels;
3. state the steps in the planning process;
4. recognize various types of plans; and
5. analyze how to make planning effective.

Let’s Get Started

I. Planning in the Organization

Before we discuss this managerial function, please do the following activity:
Goal: You want to put up a small business to help you with your finances and probably
contribute something to ease the burden of family expenses. With this in mind, fill out
the columns provided.
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What do you want to Enumerate the activities When are you going to How much do you think
achieve? that you need to do to do the things you have you need to spend for
help you achieve what written in column 2? accomplishing your
you’ve written in column activities in column 2?
1.

Planning could be described as follows (Rodriguez & Echanis, 2008):

 An activity concerned with choosing the best means to achieve a given goal
 The decision making about the future.
 Involves identifying and weighing alternative courses of action before the time of
commitment and action.
 People plan to be both effective and efficient
 Planning is considered the most basic managerial function.

All the descriptions to planning tell us that planning takes place before we do any
actions so that we may avoid mistakes and we hit our target. More so in business
organizations, where a lot of money is involved and other resources are at stake (like
someone’s time and effort)?
Planning in organizations are done by management. Remember that
management has different levels? Planning in the different levels of management also
varies.
Planning is one of the most important roles/responsibilities of top management.
Planning here is done continuously. When a certain plan is implemented and achieved,
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a new one arises. Top management plans for long term goals. The plan in this level is
called Strategic Plan. From this long term plan, the next level of management creates a
plan in their own units/departments to contribute to the achievement of the big for the
entire organization. From here, the lower level management sees to it that they have a
plan to align to their specific tasks to the unit/department plan. Thus, plans are made
first by top management then everything else follows. Why? So that the entire
organization will have the same direction! Remember, the goal is the same for the entire
organization.
Figures below reflect planning in the different levels of management.
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II. The Planning Process
Different types of plans are created in the organization and these are for different
purposes. Different steps are likewise involved in planning but let us just tackle on these
general steps as provided by our textbook.
Step 1: Setting organizational, divisional, or unit goals.
Step 2: Developing strategies or tactics to reach those goals.
Step 3. Determining resources needed.
Step 4. Setting standard.

Setting organizational, divisional, or unit goals.

The organization is composed of different human resource with different
activities. Can you just imagine how they would work in organizations if they are not
guided? Goals and objectives serves as guide in decisions and actions in the
organization. If these are clear to employees, this will clarify their work and help them
create a path to what the intended accomplishments should be. Thus, the first step.

Goals – these are statements about desired end states expressed in sufficiently general
terms as to allow for varying interpretations as to the level of achievement or its timing

Objectives – these are statements about the desired accomplishments expressed in

more specific and measurable terms.

Example:
Goal: Expand the business in the region.
Objective: Put up one store branch in Bacolod City before the end of 2022.

Now your turn…. Go ahead…. Make 2 examples and be ready when I ask you.
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Developing strategies or tactics to reach those goals.
After goals and objectives are identified, strategies and tactics should follow.

But what are strategies and tactics?

Strategies are courses of action aimed at ensuring that the organization will

achieve its objectives. While a tactic is a short-term action by management to adjust to

negative or external influences.

Moreover, clearpointstrategy.com defined these two terms as follows:

Strategy defines your long-term goals and how you’re planning to achieve them. In

other words, your strategy gives you the path you need toward achieving your

organization’s mission.

Tactics are much more concrete and are often oriented toward smaller steps and a

shorter time frame along the way. They involve best practices, specific plans,

resources, etc. They’re also called “initiatives.”

Example:

Strategy: Diversify business by engaging in the trading of construction materials

and supply

Tactic: hiring of contractual workers to augment the company’s current workforce

Overall, the rule of thumb for understanding the

difference between strategy and tactics is, “Think
strategically, act tactically.”

Determining resources needed.

This step requires the identification of the resources, both human and non-

human, to facilitate the plan. Budget is included here as well as the human resources
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needed. Remember in this step that the organization have to be efficient in its activities.

Too much use of resources might mean wastage or too little might result to losing a

business opportunity.

Setting standard.
The last step provides control measures to the plan. Setting standards in the

planning process helps ensure that objectives are achieved and the plan is followed.

Standard may be defined as a quantitative or qualitative measuring device designed to

help monitor the performance of people, capital goods or processes.

Measurement of performance could be based on the following; Quality, Quantity,

Timeliness, Cost effectiveness (OPM.gov)

III. Types of Plans

There are a variety of plans in management. These are classified based on the
following criteria:
As to time horizon
Short Range Plans – intended to cover a period of less than one year. First line
supervisors are mostly concerned with these plans. Do you recall the operational plan?
Long Range Plans – plans covering a time span of more than one year. These are
mostly undertaken by middle and top management. Remember the strategic plans?

According to frequency of use

Standing Plans – plans that are used again and again and they focus on managerial
situations that recur repeatedly. Imagine a number of employees who have the same
set of questions of what are allowed and what are not allowed. Would it be easier if
these employees a handed a manual where rules are provided?
Examples of standing plans include;
1. Policies – broad guidelines to aid managers at every level in making decisions
about recurring situations or function.
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2. Procedures – plans that describe the exact series of actions to be taken in a
given situation
3. Rules – these are statements that either require or forbid a certain action
Single-Use Plans – these plans are specifically developed to implement courses of
action that are relatively unique and are unlikely to be repeated
Examples of single-use plans include;
1. Budgets – a plan which sets forth the projected expenditure for a certain activity
and explains where the required functions will come from
2. Program – is a single use plan designed to coordinate a large set of activities
3. Project – is a plan which pertains to a discrete activity unit which has a specific
starting and ending point (involving non-repetitive activity) and is sometimes
prepared to support a program

According to Functional Area

1. Marketing Plan – this is a written document or blue print for implementing and
controlling an organization’s marketing activities related to particular marketing
strategy.
2. Production Plan – this is a written document that states the quantity or output a
company must produce in broad terms and by product family.
3. Financial Plan – this a document that summarizes the current financial situation
of the firm, analyzes financial needs, and recommends a direction for financial
activities
4. Human Resources Management Plan – this is a document that indicates the
human resources needs of a company detailed in terms of quantity and quality
and based on the requirements of the company’s strategic plan

What causes plan to fail?

Despite of a plan, organization still fails. Why? What causes plan to fail? Our
textbook offers the following reasons:

1. The manager’s inability to plan

2. Improper planning process
3. Lack of commitment to the planning process
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4. Improper information
5. Focusing on the present at the expense of the future
6. Too much reliance on the planning department
7. Concentrating on only the controllable variables