Nature and Benefits of Planning

Days 5, 6 and 7

Content Standard
The learners have an understanding of the importance of planning concepts in business success.
Performance Standard
The learners shall be able to formulate effective plans for a specific business endeavor

Most Essential Learning Competencies

• Discuss the nature and levels of planning and types of plans

• Apply appropriate planning techniques and tools in business decision-making
• Analyze the nature of organizations and types of organization structures

Lessons/Topic: Nature and benefits of Planning

Objectives: You will be able to:

• discuss the nature and benefits of Planning

• compare and contrast the different types of plans
• describe planning at different levels in the firm

Introduction
Watch this video for more information about Planning
For Online Distance learning press ctrl key then click
Planning and Goal setting in Management
https://www.youtube.com/watch?v=29qE4FSxc1w

For Modular Distance Learning the video will be uploaded/saved on your OTG flash drive

Answer this questions after you watched the video.

1. Diffirentiate the Plan and a Goal?

2. Identify the four levels of goal and plan, Explain each.
3. How it will help in Planning process?

What are the benefits of Planning?

The four benefits of Planning are the following:

 1. It sharpens focus
Planning sharpens the focus of managers as it gives them a clear sense of direction and
purpose. Managers must first know what they want. It may appear simple and easy, but
managers normally encounter this dilemma-deciding first on what they really want.
Once they have figured out what they really want to happen or accomplish, only then
can clarity of purpose sets it. With a clear eye on their target, they can begin to lay out
the steps to achieve that specific target.
A manager faced with alternative decision paths to choose from.

2. It proves flexibility
Having a plan helps managers to adjust or shift activities to respond to changes in the
environment. The firm’s external environment
may vary in terms of political, economic, sociocultural, technological or physical
condition. Dynamic changes in the external
environment require a manager to adapt to these changes in a timely manner. Flexibility
as suggested by shift from one-on-one
interview to panel interview.

3. It improves coordination
Planning allows managers to coordinate the activities and decisions of individuals and
groups to achieve common objectives. a well-thought-out plan helps managers
encourage participation from organizational members who belong to different groups.
These groups do their own set of activities simultaneously. With proper planning,
managers guide the organizational members to carry out their work in a coherent and
consistent manner in line with the given objectives. Planning and coordinating using
modern technology.
4. It tightens control
Planning is classifying the objectives, preferably in SMART form-specific, measurable,
attainable, realistic and time-bound. Objectives allow for managerial control by
comparing what is expected at the outset and what was actually accomplished at the
end. Hence, planning and control are two functions that are closely interlinked. They
clarify the set of standards or expected performance outcomes. Movement to a
common direction among various groups as propelled by planning.

We have Types of Plan

Managers use many types of plans that vary according to time horizon, whether for programmed
(anticipated) or nonprogrammed (unanticipated) decision-making, and management level. Help
managers achieve the desires objectives of the company. The main distinctions among these plans are
discussed in the following sections.
Long-range Plan and Short-range Plans
The company long-term plans are traditionally those that look at three or more years into the
future. They are usually called strategic plan as they chart the company’s long-term plan. Long-range
plan is usually backed up by research studies. Such research studies may directly commission by the
company itself, or may be sourced from published reports of reliable organizations, such as government
agencies academic institutions and research think tank (classified as secondary data).
Short-term plans are usually those that cover a period of one year or less. Examples, are
monthly plans, quarterly plans, midyear plans, and annual plans. The operations group of a company,
which usually cover production, marketing, and finance and accounting are normally required to
regularly prepare, and mid-year plans. This is necessary to ensure a better control of the planned
activities and expected outputs from the operations group that procedures the company products or
services.
Operational Plans: Standing Plans and Single-use Plans
In situation where programmed decision-making is needed, managers develop operational
plans, which may refer to standing plans and single-use plans.
Standing Plans are used for situation that occur repeatedly. They are in the form of policies,
rules, and standard operating procedures (SOP’s) The following clarifies the distinctions among policies,
rules and standard operating procedures.
1. A policy is a general or broad guide for the actions or behavior of people in the workplace.
The policy emanates from the top management level and cascades down to the lowest,
shop floor level. Within the top management team, there is a permanent and senior
position called sustainability director, who is overall in charge of leading, developing, and
promoting sustainability strategies, programs, and practices throughout the company. Thus,
sustainability practices go beyond process improvements, green engineering, and waste
reduction. They include holding and promoting collaborative efforts across functions. They
also include developing and maintaining trustworthy relationships with customers,
suppliers, and other external clients.

2. A rule is a more specific guide to actions or behavior in the workplace. An engineering and
construction company has established rules to ensure health and safety for all its
employees. The health and safety rules aim to prevent, minimize, or eliminate human
suffering and loss of earnings caused by industrial accidents and occupational illness.

To prevent workplace accidents due to employee error, rules are established to ensure
appropriate working conditions.
Examples of these rules are as follows:

• Checking if the workers are competent and qualified for the job
• Ensuring that the workers are complying with the operation’s safety measures
• Promoting discipline among workers to avoid distraction while performing their work
 To avoid accidents related to equipment insufficiency, the rules require employees of the
following:

• Using appropriate equipment

• Ensuring that safety devices are in proper place
• Wearing adequate protective clothing
• doing regular equipment checkup and preventive maintenance

To avoid accidents due to procedure inefficiency, rules are established for the following:

• Ensuring warning of hazards

• Handling of materials appropriately
• Observing timely rest period during long hours of using equipment and devices.

3. Standard Operating Procedure (SOP)

is a series of action to be followed for a specific situation in the work place.
Collective Bargaining Agreement (CBA) that has led to productive relations between
management and members of the union.

Pre-Negotiation Process

• The Human resources manager should meet with the heads of the different
department. They will jointly set the goals of the CBA Contract.
• All the parties concerned (management panel and union officers and members) must
know who will compose the management panel and the union’s negotiating panel.
• All parties must review the present expiring contacts.
• Both parties must review current situation and pertinent laws on employee wages and
benefits.
• All parties agree to ensure clear and open communication with each other.

Negotiation Process

• The union submits proposal to management and request for a meeting

• Management must acknowledge receipt of the union’s proposal and sets a date for the
start of contact negotiation.
• during the meeting, the parties should agree on ground rules to promote order and
clarity in the negotiations.
• Negotiations may start during the first meeting and may continue to succeeding
meeting, if necessary, as seen by both parties. Agreements may be arrived at during any
of the negotiation meetings.
• The minutes of the negotiation meetings must be properly recorded and attested as
true and correct by both parties
 • questions and clarifications from both parties are encouraged during the negotiation
meetings. Respect for each other must be observed at all times by both parties.
• All parties are encouraged to resolve conflict during the negotiation process.
• Upon coming to a mutual agreement to the condition set in the contract, both parties
sign the CBA contract.

Post-Negotiation Process

• All parties must ensure the implementation of the condition of employment that were
mutually agreed upon by both parties.
• The CBA Contact is binding to binding to both parties. Its administration is applied at the
workplace at all times.
• a grievance procedure will be established to resolve any conflict that may arise from
interpretation and implementation of the CBA Contract. A panel of voluntary arbitrator
will be created by both parties to handle and resolve issues, such as pertaining to
discipline.
• The voluntary arbitrator shall serve as a neutral, third party who will take the role of a
judge and will make decisions based on facts and the application of the law.

There are Planning in the Different Level of the Firm

Strategic Plans are more challenging to prepare since they extend to future possibilities of
the firm. Imagination and diligence are required.

Another way of classifying plans is by the type of management level assigned to develop them.
These are the strategic plans and the functional plans of the company.

Strategic Plans are developed by the top management of the company. Strategic plans cover the
entire company and provide the direction it will take for the coming years.

Strategic planning starts with clarifying the long-term vision and mission of the company. Top
managers carefully craft the vision-mission of the company because the reflect the “heart and soul” of
the firm.

The organization has their Vission and Mission

The vision must be well thought out since it is the compelling future scenario desired for the
company. Vision as the compelling long-term goal of the company. The mission pertains to the guiding
purpose of the company. It concisely describes what the company does in a manner that differentiates it
from other companies. Mission as the guiding purpose of a company. The values of a company need to
be carefully identified and assessed since they stand for the strong character and ideal qualities of the
organizational member. They state how people in the organization should conduct themselves, and how
they should operate the business. For instance, a fashion retail company posted its core values- quality,
customer orientation, and employee satisfaction-in highly visible areas within their office and
merchandise outlet store.

Functional Plans are developed at the middle and supervisory levels. The strategic plans at the
top level, therefore, are translated into more detailed functional plans made at the middle or lower
levels of management. Functional Plans are also called tactical plans since they are tactical prepared by
the managers occupying the different functional, departments, such as, production, marketing, finance,
and human resources.

Forecasting and Scenario planning involves intensive data gathering. But interpretingthese
forecast and scenarions to make sound planning decisions is the most challenging part.

Pertains to the different methods for determining, analyzing, and predicting situation that will
likely occur. This is done in order to adequately prepare for these situations and to respond to them in a
timely and appropriate manner. The long-term success of an organization depends on how well
managers are able to use and apply their knowledge, skills, and talent for planning.
Forecasting It is essential for managers to be prepared for the future. managers must be
proactive. They should be forward-looking and vigilant for any sudden change in the
environment.
Forecasting pertains to the use of scientific techniques to predict the likely hood of
contain events or factors to happen in the future. Managers make use of finding from data
analysis who gather acts of data and examine these acquired information for patterns and
trends. Data analysis make certain assumption for those patterns and trends that may occur at a
certain time in the future.
Quantitative forecasting techniques use statistical tools and analysis to predict the
future. They are used when the information about the variable you are trying to forecast are
available and can be quantified. For instance, a marketing manager of a shoe manufacturing
company is tasked by top management to provide quarterly forecast of the sales volume of the
shoe for the coming year. Quarterly sales volume forecast are important because they affect
many areas related to operations, such as production schedules, raw material purchasing plans,
inventory policies, and sales quotas. This procedure is called time series method
Qualitative forecasting techniques make use of opinion or perceptions from experts fix
prediction purposes. For instance, a panel of experts may develop a consensus forecast of
employment rate a year from now. An advantage of the qualitative forecasting method is that it
can be applied for nonquantifiable data and when historical data are not applicable or available.
Contingency Planning
is the process of identifying alternative courses of action in the event that unforeseen or
uncontrollable events take place. business contingency plans are prepared by managers in relation to
financial risks, market risks, production risks, labor risks, information and communication risks, and
natural disaster risks.
Scenario Planning
involves predicting potential alternative events that might happen. It entails preparing resources
and actions to prevent or mitigate the “shocks” from negative events, At the same time, it helps to
visualize the positive effects of seizing opportunities.
Scenario planning, therefore, is similar to contingency planning in preparing for unforeseen
events. However, scenario planning is more detailed and extensive in visualizing the alternative events
that may take place. For instance, the “worst case” scenario and the “best case” scenario are both
describe in detail.
 Inductive approach to scenario planning starts with a potential possibility based on a familiar
context but not yet a well-tested path, and then develops this route to grow out into several alternative
pictures of potential possibilities.
The deductive approach to scenario planning starts with a general and well-tested concept or
principle, then fleshes out this principle into several possible detailed applications or features.
The incremental approach involves a gradual development of possibilities that usually starts with
a general approach, then leads to another potential approach, and so forth. The scenario take many twists
and turns.
The normative approach involves developing possibilities emanating from a major path and
ultimately aimed toward a grand vision or an ideal end-goal.
Benchmarking
technique is finding out what other organizations are doing well and then incorporating those
“best practices” into the operations of one’s organization to improve its cost and effectiveness. it
compares the methods and approaches used by high performing companies with those of one’s company.
 The benchmarking activities may include the following
• how inventories are managed
• how customer complaints are handled
• how raw material are purchased
• how wastes are reduces and recycled
• how preventive maintenance is performed
• how factory defects are eliminated
• other practices that can be examined in terms of competitiveness

Watch this Video in Decision-making Techniques

(1677) Decision Making in Management - YouTube

Decision-making requires a diligent effort to collect actual and adequate data. If data
gathered are erroneous or inadequate the quality of the decision-making suffers.
The following discusses the rational approach to decision-making by explaining the steps or
stages to carry it out. This rational approach is often take to solve a particular problem in the workplace.
Step 1. Identify and define the problem
This first step of identifying the problem at hand is crucial. Individuals in the workplace have
their own views and perceptions about what the problem is. The challenge is to agree on what the
problem really is. A problem is a situation that prevents or constrains one from attaining the desired
goal. It is a deviation from the expected or ideal situation.
 Step 2. Generate and evaluate alternative course of action
After clearly defining the problem, the manager, together with his or her group, gather facts and
information to solve it. By consulting his or her own group and other concerned groups, the manager
analyzes the facts for courses of action. To evaluate the alternatives, the manager formulates a set of
criteria (also called factors) as basis for selecting the most appropriate course of action. Each alternative
is evaluated based on each criterion or factor.

Criteria for Business Environment are the following Factors

1. Costs – How much will be spent for the given alternatives

2. Benefits or desired features – What are the specific benefits or desired

features for the given alternatives?
3. Speed or timeliness – How fast can the given alternative be achieved?
4. Creativity or innovativeness – To what extent does the given
alternative foster creativity or innovation in the workplace?
5. Acceptability or participation from relevant groups – To what extent is
the given alternative accepted by those who will implement it, or what
is the degree of participation shown during problem solving by those
who will implement the given alternative?
6. Ethical implication – to what extent does the given alternative comply
with ethical standards of the company and outside society?
7. Environmental Sustainability – To what extent does the given
alternative avoid or reduce damage to the environment?

Step 3. Choose the most appropriate course of action

To choose the most appropriate course of action, the manager must evaluate each alternative
based on the criteria by assigning point scores for each alternative. At this stage, the manager (perhaps
together with his group) uses his or her own judgement in assigning the point scores for each
alternative. Once scores are assigned to each alternative, the total point score for each alternative will
be computed. The alternative with the highest total score is considered and adopted as the most
appropriate course of action to solve the identified problem.
Step 4. Implement the chosen course of action
The manager prepares a work plan to implement the chosen course of action in order to solve
the identified problem. The action is implemented by the manager together with the concerned group.
Step 5. Evaluate the results
 The managers monitor the progress and evaluates the implementation of the solution taken to
solve the problem. This is to find out if the desired results are achieved. If not, corrective action are
taken. The manager also examines any unintended side effects during implementation. side effect may
be in the form of physical or behavioral.

Time Management in Decision-making

A manager is often confronted with various commitment, meetings, and other scheduled
activities that take a toll of his or her energy. It is common to find a manager juggling with so many
things to do. Time management is a vital skill that a manager learn along with decision-making skills.

For managers, below are some tips in time management:

• identify the “time waster” and avoid them. Better still, get rid of them
• Follow priorities by working first on what is most important and urgent.
• Do not get too preoccupied with details to the point that you miss the big
picture of things.
• avoid individuals who tend to monopolize your time unnecessary.
• be the master of your calendar by not letting others control your time.
• Break complex tasked into smaller chunks that can be done gradually.
• Stay calm even under time pressure. A relaxed mind avoids mistakes.

For more information, click this link:

https://www.youtube.com/watch?v=6ssVNBTKnfo

References

Senior High School Organization and Management by Diwa Publishing Learning to Success in Business
Management by Phoenix Publishing House