Learning Objectives

WEEK 4
• After this session, you should be able to:
Introduction to Planning –Explain the needs for planning
–Describe the different types of planning
–Understand the principles of planning
–Describe the stages and steps of the planning process.

Principles of Management –Summarize the planning process and describe

organizational goals.
–Discuss how tactical plans are developed and
Evans Khadambi Luyali executed.
Department of Civil & Structural Engineering –Describe the basic types of operational plans used by
organizations.

The Planning Process The Planning Process

• Planning
–Planning is determining the objectives and formulating
the methods to achieve them.
(It is more simply said than done)
• A job well planned is half done.
–Identifying and selecting appropriate goals and
courses of action for an organization.
• The organizational plan that results from the planning process
details the goals and specifies how managers will attain those
goals.
Planning is concerned with ends (what is to be
done) as well as means (how it is to be done)
During planning one needs to ask the following:
1. What am I trying to accomplish? i.e. What is my
objective?
2. What resources do I have and need to accomplish
the same?
3. What are the methods and means to achieve the
objectives?

4. Is this the optimal path?

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Informal Planning Formal Planning

• All managers engage in planning • Specific objectives are written down and made
–In informal planning very little if any is written down available to organization members
• What is to be accomplished is in the head of one or a few –Management clearly defines the path it wants to take
people from where it is to where it wants to be
– The organizations objectives are rarely verbalized
• This describes planning in many small businesses
– The manager or owner has a private vision of where they want
to go and how they expect to get there
– This type of planning is general and lacks continuity
–Informal planning exists in some large organisations
while some small businesses have sophisticated
formal plans

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1
 Need For Planning Why Planning Is Important

Proper coordination of all the individuals in the group.
– If the group effort is to be successful then its every
member must
• Know exactly what is expected of them.
– This is the fundamental function of planning.
– This is a basic function of the manager.
– Planning is the most crucial part of the functions of the
manager.
• It has been rightly said, “Failure to plan is planning to fail”.
Most organisations very often fail due to poor planning.
• Planning determines where the organization is
now and where it will be in the future.
–Participation: all managers are involved in setting
future goals.
–Sense of direction and purpose: planning sets goals
and strategies for all managers.
–Coordination: plans provide all parts of the firm with
understanding about how their systems fit with the
whole.
–Control: Plans specify who is in charge of
accomplishing a goal.

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• Establishes coordinated effort • By forcing managers to look ahead –

• Gives direction to managers and non managers •Anticipate change
• All understand where the organization is going and the •Consider impact of change
specific roles they are to play
•Develop appropriate responses
• They then coordinate their activities fostering cooperation and
team work

Why
Provide direction
Why
Provide direction

Why
Reduce
impact of change

Managers
Managers
Plan
Managers
Plan

Plan
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•Planning establishes objectives or standards that facilitate control

• If organization members are unsure of what they are to achieve, how can
• Planning reduces overlapping and wasteful activities they determine whether they have achieved it ?
•Coordination before the fact is likely to uncover waste and
redundancy •In planning objectives are developed
• When means and ends are clear, inefficiencies become •In controlling performance is compared against the established
obvious objectives
• If and when significant deviations are identified, corrective action can be
taken
Reduce Reduce
Provide direction Provide direction
impact of change impact of change
Why Why
Managers Managers
Plan Plan
Minimize waste Minimize waste Set standards
and redundancy and redundancy for control

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 Decision Making and the Planning Process Organizational Goals
• Purposes of Goals
–Provide guidance and a unified direction for people in
the organization.
–Have a strong effect on the quality of other
aspects of planning.
–Serve as a source of
motivation for
employees of the
organization.
–Provide an effective
mechanism for evaluation
and control of the organization.

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Organizations Have a Purpose— Kinds of Goals

That’s Why They Need Goals
• By Level
–Mission statement is a statement of an organization’s
Identification fundamental purpose.
–Strategic goals are goals set by and for top
management of the organization that address broad,
Adaptation Integration general issues.
Organizational
purpose for
–Tactical goals are set by and for middle managers;
goals their focus is on how to operationalize actions to
strategic goals.
–Operational goals are set by and for lower-level
Collaboration Revitalization managers to address issues associated with tactical
goals.

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Setting Goals Kinds of Plans

Well set goals should be “SMART” • Strategic Plans
• Specific –A general plan outlining resource allocation, priorities,
and action steps to achieve strategic goals. The plans
• Measurable are set by and for top management.
• Attainable • Tactical Plans
• Realistic –A plan aimed at achieving the
• Timely tactical goals set by and for
middle management.
• Operational Plans
–Plans that have a short-term focus.
These plans are set by and for lower-level managers.

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3
 Types of Plans Types of Plans
Standing Plans
Policies –Used in programmed decision situations
– Policies, procedures, and rules developed for
Programs handling repetitive situations.
Standing Single Use – Policies
Procedures • General guidelines to be followed when making decisions.
Plans Plans
These are general guides to action.
Budgets
– Procedures
• A sequence of actions to be followed in order to achieve an
Rules objective. Standard Operating Procedures (SOP) specify an
exact series of actions to follow.
– Rules
• A statement of exactly what should or should not be done.
Rules are formal written specific guides to action.

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Types of Plans Types of Plans

Single-Use Plans Single-Use Plans
–Developed for a one-time, non programmed issue.
– Budget
–Programs and budgets developed for handling non • Represents the funds allocated to operate a unit for a
repetitive situations. fixed period of time.
– Program • Is a planning tool initially and becomes a control tool
• A set of activities designed to accomplish an objective after implementation of the plan.
(specific goal) over a specified period of time.
– Program development
• Set project objectives.
• Break the project down into a sequence of steps.
• Assign responsibility for each step.
• Establish starting and ending times.
• Determine the resources needed for each step.
– Project
• Specific action plans to complete programs.
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Scenario Planning Planning for Contingencies:

Scenario Planning
Scenario Planning (Contingency Planning)
–The generation of multiple forecasts of future
conditions followed by an analysis of how to effectively 1. Define the scope of the • Using steps 1-4 create
scenario initial scenarios
respond to those conditions.
2. Identify the major • Check each scenario for
–Planning seeks to predict the future, but the future is stakeholders consistency and
unknowable. 3. Identify environmental plausibility of facts
• By generating multiple possible “futures,” a firm can see how trends • Create contingency plans
its plans might work in each and prepare for the possible 4. Identify key from each scenario
outcomes. uncertainties and • Develop measures to
–Scenario planning is a learning tool to improve outcomes indicate when scenario
events are occurring
strategic planning results.

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4
 Special-Purpose Plans Planning From Top to Bottom

• Planning for Change

• Planning for
Contingencies
• Planning for Product
Development

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Planning From Top to Bottom Three Stages in Planning

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Planning Process Stages Steps in Planning

• Determining the Organization’s Mission and Stage I
Goals Determining the Organization’s Mission
–Defining the organization’s overriding purpose and its
goals.
and Goals
• Formulating strategy 1.Determine the goals or objectives for
–Managers analyze current situation and develop the the entire organisation.
strategies needed to achieve the mission. – Defining the organization’s overriding purpose
• Implementing strategy and its goals
–Managers must decide how to allocate resources
between groups to ensure the strategy is achieved.

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5
 Steps in Planning Steps in Planning
Stage II Stage III
Formulating strategy Implementing strategy
–Managers analyze current situation and develop the –Managers must decide how to allocate resources
strategies needed to achieve the mission between groups to ensure the strategy is achieved.
2. Determining the planning premises 6. Decision making.
3. Decide the planning period. 7. Making of derivative plans.
4. Search for and examine alternative courses of
actions.
5. Evaluating the alternatives.

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At the next Session

Strategic Planning

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