Planning

Functions of Management
(1) Planning
• Planning is future-oriented and determines an
organization’s direction.
• It is a rational and systematic way of making decisions
today that will affect the future of the company. It is a
kind of organized foresight as well as corrective
hindsight.
• It involves predicting of the future as well as attempting
to control the events.
• It involves the ability to foresee the effects of current
actions in the long run in the future.
Vision and Mission
Statements -- a Roadmap of
Where You Want to Go and
How to Get There
Have you ever been involved in an organization or
business that never seems to accomplish very
much? Regardless of how hard you work, you just go
in circles. The problem may be that you have not
decided where you want to go and have not created
a roadmap of how to get there. From the
perspective of an organization, the problem may be
that you are not focusing on what you want to
achieve and how you will achieve it. There are a
series of steps or statements of how to give your
organization direction.
Vision Statement 
• A mental picture of what you want to accomplish or
achieve. For example, your vision may be a
successful winery business or an economically
active community.

Example:

A successful family dairy business.

Mission Statement 
• A general statement of how the vision will be
achieved. The mission statement is an action
statement that usually begins with the word "to".

Example:

To provide unique and high quality dairy products to

local consumers.
Core Values
• Core values define the organization in terms of the principles
and values the leaders will follow in carrying out the activities
of the organization.

Example:

• Focus on new and innovative business ideas

• Practice high ethical standards.
• Respect and protect the environment.
• Meet the changing needs and desires of clients and consumers.
Strategies, Goals, Objectives and
Action Plans
Strategies – A strategy is a statement of how you are going to achieve something.
More specifically, a strategy is a unique approach of how you will use your mission
to achieve your vision. Strategies are critical to the success of an organization
because this is where you begin outlining a plan for doing something. The more
unique the organization, the more creative and innovative you need to be in
crafting your strategies.
Goals – A goal is a general statement of what you want to achieve. More
specifically, a goal is a milestone(s) in the process of implementing a strategy.
Examples of business goals are:
• Increase profit margin
• Increase efficiency
• Capture a bigger market share
• Provide better customer service
• Improve employee training
• Reduce carbon emissions
Be sure the goals are focused on the important aspects of
implementing the strategy. Be careful not to set too many goals
or you may run the risk of losing focus. Also, design your goals
so that they don’t contradict and interfere with each other. A
goal should meet the following criteria:

• Understandable: Is it stated simply and easy to understand?

• Suitable: Does it assist in implementing a strategy of how the
mission will achieve the vision?
• Acceptable: Does it fit with the values of the organization and
its members/employees?
• Flexible: Can it be adapted and changed as needed?
Objectives – An objective turns a goal’s general statement of what is
to be accomplished into a specific, quantifiable, time-sensitive
statement of what is going to be achieved and when it will be
achieved. Examples of business objectives are:

• Earn at least a 20 percent after-tax rate of return on our investment

during the next fiscal year
• Increase market share by 10 percent over the next three years.
• Lower operating costs by 15 percent over the next two years
through improvement in the efficiency of the manufacturing
process.
• Reduce the call-back time of customer inquiries and questions to no
more than four hours.
Objectives should meet the following criteria:

• Measurable: What specifically will be achieved and when will

it be achieved?
• Suitable: Does it fit as a measurement for achieving the goal?
• Feasible: Is it possible to achieve?
• Commitment: Are people committed to achieving the
objective?
• Ownership: Are the people responsible for achieving the
objective included in the objective-setting process?
Action Plans – Action plans are statements of specific actions or activities that will
be used to achieve a goal within the constraints of the objective. Action plans may
be simple statements or full blown and detailed business plans where goals and
objectives are also included. Action plans may also be used to implement an entire
strategy (called strategic planning).Examples of action plans within the context of
goals and objectives are:
Identifying Opportunities
and Threats
After assessing the strengths and weaknesses of your business for
your business plan, look for external forces, like opportunities and
threats, that may have an effect on its destiny. These changes include

• The appearance of new or stronger competitors

• The emergence of unique technologies
• Shifts in the size or demographic composition of your market area
• Changes in the economy that affect customer buying habits
• Changes in customer preferences that affect buying habits
• Changes that alter the way customers access your business
• Changes in politics, policies, and regulations
• Fads and fashion crazes
Planning Process
Planning seeks to answer multitude of the
questions:

What should be done?

Why is action necessary?
Where shall it be done?
How shall it be done?
Who will do it?
What physical resources will be required?
Steps Taken for Planning:
1. Establishing Objectives
The first step in planning is the statement of objectives to be achieved by the
concern. It should be known to every member of the concern as to what are
its purposes and objectives. Objectives indicate what basically is to be done.
Where the preliminary stress is to be placed and what is to be accomplished
by the network of policies, procedures, rules, strategies, budgets and
programmes.

2. Establishing Planning Premises

It is to establish, obtain agreement to use and disseminate critical planning
premises. There are forecast data of a factual nature, applicable basic policies
and existing company plans. Premises then are planning assumptions, the
future setting in which planning takes place in other words, the environment
of plans.
3. Determining Alternative Courses
In planning it is to search for and examine alternative courses of action especially
those not immediately clear. There is seldom a plan for which reasonable
alternatives do not exist.

4. Evaluating Alternative Courses

Having sought out alternative courses and examined their strong and weak points
the other step is to evaluate them by weighing the various factors in the light of
premises and objectives.

5. Selection from the Alternatives

Selecting the course of action, is the point at which plan is adopted … the real point
of decision making. An analysis and evaluation of alternative courses will disclose
that two or more courses are available, and the manager may decide to follow
several courses rather than one best course.
6. Formulation of Derivative Plans
As soon as the best programme is decided upon, the next
task is to work out its details, formulate the steps in full
service to break it down for each section or department,
for each product and component of a product and for
each month, quarter, week ultimately, the manager will
get the final plan of action in concrete terms.

7. Effective Communication of Plans

It is necessary that the plans are properly and effectively
communicated to all the managers concerned.
The 4 Types of Plans
Operational Planning

• How things need to happen.

• Guidelines of how to complish the mission are set.
• Describes the day-to-day running of the company.
• Operational plans are often described as single use plans
or ongoing plans.
• Single use plans are created for events and activities with
a single occurrence (such as a single marketing
campaign).
Operational Planning

• How things need to happen.

• Guidelines of how to accomplish the mission are set.
• Describes the day-to-day running of the company.
• Operational plans are often described as single use plans
or ongoing plans.
• Single use plans are created for events and activities with
a single occurrence (such as a single marketing
campaign).
Strategic Planning

• Strategic plans are all about why things need to happen. It’s big
picture, long-term thinking.
• It starts at the highest level with defining a mission and casting a
vision. Includes a high-level overview of the entire business.
• It’s the foundational basis of the organization and will dictate long-
term decisions.
• The scope of strategic planning can be anywhere from the next two
years to the next 10 years.
• Important components of a strategic plan are vision, mission and
values.
Tactical Planning

• Tactical plans are about what is going to happen.

• There are many focused, specific, and short-term
plans, where the actual work is being done, that
support the high-level strategic plans.
• Includes tactics that the organization plans to use
to achieve what’s outlined in the strategic plan.
• Often, the scope is less than one year and breaks
down the strategic plan into actionable chunks.
Contingency Planning

• Contingency plans are made when something unexpected happens or

when something needs to be changed.
• Business experts sometimes refer to these plans as a special type of
planning.
• Contingency planning can be helpful in circumstances that call for a
change.
• Although managers should anticipate changes when engaged in any of
the primary types of planning, contingency planning is essential in
moments when changes can’t be foreseen.
• As the business world becomes more complicated, contingency
planning becomes more important to engage in and understand.
Policies, Procedures and
Rules
Policy is a mandate and directive from the top of the organization. Its
purpose is to influence behaviour. From it, management provide the
overarching principles under which the business operates. It should not
vary in its message or enforcement model.

Procedures are process specific and detail the steps taken to achieve an
objective. Procedures include operations manual, user manual, and all
manner of process documentation.

A rule is such that it is a doctrine to observe by one and all. Rules can be
made from to time in consonance with the circumstances prevailing in
the society and modern trends of business activities to suit to the needs
of the people, employees, firms etc.
End.