Chapter 2

PLANNING

hanifgafar@uitm kedah.uitm.edu.my
 Topic Outlines
2.1 Definition and the importance of planning
2.2 Types of planning and goals
2.3 Strategic planning
2.4 Mission Statement
2.5 Types of organizational plan/operational plan
 2.1 Definition
PLANNING
Setting goals and defining the actions necessary to achieve those
goals
Planning is concerned with ends (what is to be done) as well as
with means (how it is to be done).
ALSO known as the process of setting goals and course of action,
developing rules and procedures and forecasting future outcomes

PLAN
A method of doing or making something and consisting of a goal
and a course of action
 2.1 Importance Of Planning

• Sense of direction and purpose

• Coordinate managers of different functions and division
• Device for controlling managers
• Get managers to participate in decision making
• Reduce overlapping
• Resources are effectively and efficiently utilized
• Can point out the need of future
2.2 Types of planning and goals
• Goals • Planning
 Vision • Strategic plan
 Mission a) Strategy
 Goal b) Mission statement
• Organizational/Operational
 Objective
plan
 Plan
a) Standing plan
-Policy
- Procedure
-Rule
b) Single use plan
-Project
-Programme
-Budget
 2.2 Types of planning and goals
Vision: broad, all inclusive and forward thinking
Example:
Petronas
To be a Leading Oil and Gas Multinational of Choice

Mission: Reason for the existence of an organization

Example:
Petronas
-We are a business entity
-Petroleum is our core business
-Our primary responsibility is to develop and add value to this
national resource
-Our objective is to contribute to the well-being of the people
and the nation
 2.2 Types of planning and goals
• Goal
– Provide guidance and a unified direction for people in the
organization.
– Must be precise, specific and meaningful
– Have a strong affect 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
 Types of Plans

BREADTH TIME SPECIFICITY FREQUENCY

OF USE FRAME OF USE

Strategic Long term Directional Single use

Tactical Short term Specific Standing
2.3 Strategic Planning
The process by which an organization makes decision and takes
action to enhance its long term performance.

• Strategy
– A plan that identifies the markets in which an organization
competes, as well as the ways in which it competes in those
markets.
– A course of action the explains how an enterprise will move
from the business it is now to the business it wants to be in
Tactical plans
◦ Plans that specify the details of how an
organization’s overall objectives are to be achieved

Short-term plans
◦ Plans that cover less than one year

Long-term plans
◦ Plans that extend beyond five years
 2.3 Strategic Planning

– Apply broadly to the entire organization.

– Establish the organization’s overall objectives.
– Seek to position the organization in terms of its
environment.
– Provide direction to drive an organization’s efforts to
achieve its goals.
– Cover extended periods of time.
– Are less specific in their details.
 Tactical Planning
• Tactical plans (operational plans)
– Apply to specific parts of the organization.
– Specify the details of how the overall objectives are to be
achieved.
– Cover shorter periods of time.
– Must be updated continuously to meet current
challenges.
2.4 Mission Statement
 A broad declaration of an organization’s purpose that
identifies organization’s products and customers and
distinguishes the organization from its competitors

 It set the strategic direction of an organization – “why we

are here” & “where we going”

 It provides a foundation for the development of business

strategy
Developing mission statement

 It should be concise and meaningful

◦ Establish a set of primary goals/objectives (sense of
direction or purpose for the organization & should be
realistic)

 Embodied in the minds, habits, attitudes & decisions of

everyone in the company every day

 Must be describe the free primary aspect of organization

◦ Define its business (who are our customers & what
customers needs are being satisfied)
Importance of Mission statement

 Addresses our basic need for direction.

 Defines the purpose of the organization and the values and

ethical principles by which members aspire to live

 Provide a foundation by which the organization should

operate and create goals
 2.5 Types of organizational plan/
operational plan
• Standing plans
– A plan that is ongoing and provides guidance for
repeatedly performed actions in an organization
• Customer satisfaction policy

• Single-use plans
– A plan that is used to meet the needs of a particular or
unique situation
• Single-day sales advertisement
◦ Standing plans
Plans that deal with organizational issues and
problems that recur
Designed to be used again & again.

 Policy – general guidelines for decision making within the

organization. e.g. An organization may require an employee to
be confirmed first.

 Procedure – plan that specifies how to proceed in a specific

situation that routinely arises . e.g. How to operate a Photostat
machine

 Rules – detailed and specific regulation for action. e.g. Wearing

formal uniforms every Monday.
 Single Use Plan

A one-time plan specifically designed to meet the need of a unique

situation.
Designed for a specific purpose or period
E.g. build a new branch office

◦ Program – plan that govern a comprehensive set of activities designed

to accomplish a particular sets of goals. E.g.: Program Pembangunan
Pelajar

◦ Projects – plan that direct the efforts of individuals or work group

towards the achievement of goals. e.g. Project KLCC

◦ Budget – plan that specify how financial resources should be allocated.

e.g. Budgets are plan that commit resources, activities, projects or
programs
 Specific and Directional Plans

• Specific plans
– Plans that have clearly defined objectives and leave no
room for misinterpretation.
• “What, when, where, how much, and by whom” (process-focus)

• Directional plans
– Flexible plans that set out general guidelines.
• “Go from here to there” (outcome-focus)
Directional vs Specific Plans
 Barriers to Effective
Planning

Lack of commitment to planning

Lack of top management support
Lack of meaningful objectives of goals
Failure to see the scope of plans
Rely to much on experience
 Overcoming the Barriers
to Planning

Planning must be organized

Planning must be clear and definite
Managers must participate in planning
Encourage strategic thinking