CHAPTER 3

DEFINITION AND
NATURE OF PLANNING
PLANNING
 Planning is the process of thinking before doing.
 This is also considered as a conceptual
framework of manager.
 According to Weihrich and Koontz, planning
involves selecting missions and objectives and the
action to achieve them.
 According to Newman is deciding in advance

 Henry Fayol defines planning as deciding the

best alternatives among others to perform
different managerial operation to achieve pre-
determined goals.
TWO BASIC COMPONENTS
OF PLANS
1. Goal – represent an end statement,
the target, and results that
managers hope to achieve.
2. Action Plan – represent the means
by which an organizations goes
ahead to attain it’s goal.
NATURE OF PLANNING
 PLANNING IS GOAL ORIENTED
every step specifies an action plan to be able
to attain the desire goal.
 PLANNING IS FUTURISTIC IN
NATURE
- planning means looking ahead.
 PLANNINGEXIST IN ALL
MANAGERIAL ACTIVITIES

it is the primary function of manager at all

levels.
 PLANNING IS NOT A GUESS WORD

- it is based on facts and information

TYPES OF PLAN
 1. STRATEGIC PLAN
Is a high- level overview of the entire
business, it’s vision, mission, corporate objectives,
and values. This plan is the foundation basis of the
organization and will form part of the long- term
decision. The scope of the plan can be two, three,
five, or even ten years.
COMPONENTS OF A STRATEGIC
PLAN
 VISION
- where does the organization want to be five
years from now? This is how the company wants to
be envisioned.
 Mission

- is more realistic overview of the company’s

aim and ambitions. Why does the company exist?
What does it aim to achieve?
 Values

- How do you want to inspire the world? How

do you want to be known?
 2. TACTICAL PLAN

Describe the tactics the organization plans to

use to achieve the ambitioned outlined in the
strategic plan

specifically focuses on coming out with

specific deadlines, timetables, budget, the
resources, the person responsible for the project
and marketing, funding, etc.
 Operational plan
describe the day to day running of the
company. The operational plan chart out a
roadmap to achieve the tactical goals within the
timeframe.
PLANNING AT DIFFERENT
LEVELS IN THE FIRM
 An organization can have many different
managers, across different level, positions, levels
of authority and hierarchy. In any organization,
managers are on top of their subordinates. They
carry our plans through the support of their staff.
 Most organizations have three management
levels:
 Top – level managers
 Middle – level managers
 Low – level managers

- These managers perform different tasks by their level

of authority in the organization hierarchy.
 Top – level managers

are the chairperson, board of director,

president, CEO ( chief executive officer), CFO (chief
of financial officer), COO( chief operating officer),
vice president and corporate head.
these managers are responsible for
controlling and overseeing the entire organization.
they do not direct the day to day activities of
the firm, rather they set goals, leads the entire
company to achieve the goal sets.
 Middle- level managers
are those in the level below top managers.
Their job titles include: General managers,
regional managers, division manager, and plant
manager.
they are responsible for carrying out the
goals set by top management.
 Low – level managers
also called first – line managers or
supervisors. These managers have job titles such as
Office Manager, Department Manager, Store
Manager, and Supervisor. These managers focus on
controlling and directing. They are responsible for
the daily management of line workers or the
employee.
PLANNING TOOLS AND
TECHNIQUES
 BRAINSTORMING
is usually the first crucial creative stage of
the project management and planning process. It is
powerful technique that draws out ideas from a
group of people.
 Brain storming process
1. Define and agree on the objectives
2. Brainstorm ideas and suggestions having
agreed a time limit
3. Categories/ condense/ combine/ refine
4. Assess. Analyzes the effect of the result
5. Prioritize options/ rank list appropriate
6. Agree on action and timeframe
7. Control, monitor, and follow up
 Fishbone diagrams
- are also called cause and effect diagram
and Ishikawa diagrams, named after Kaoru
Ishikawa (1951 – 1989)
- Japanese Professor who specialized in
industrial quality management and engineering
who devised the technique in the 1960.
 Gannt chart
- are extremely useful project management
tools. It is named after the US engineer and
consultant Henry Gant (1861- 1919) who devised
the technique in the 1910s.
- are excellent model for scheduling and
budgeting, and for reporting, presenting, and
communicating project plans.
 Decision making
- management is decision making. The job of
a manager is to come up with a sound decision
based on the facts, tools, information, data,
experience, the knowledge that he is equipped.
- in the book “ Practice of Management” by:
P.P Ducker observes that “whatever a manager
does, he does through making decision.”
 Steps in Decision Making
1. Identify the problem – realizing what is there to
make decisions for is important.
2. Seek information – what is the potential cause of the
problem?
3. Brainstorm solution – list out potential solutions
4. Choose an alternative- managers weigh the pros and
cons of each potential solution, seek additional
information if needed and select the option they feel
has the best chance to succeed at the least cost
5. Implement plan – get all your employees and bring
your decision into action.
6. Evaluate outcomes – always monitor the result of
your strategic decision.