Planning

Meaning of Planning
 Planning is the process of establishing goals and
defining the methods by which these goals are to
attained.
 Planning involves
a. determining various types and volumes of physica
and other resources to be acquired,
b. allocation of these resources among competing
claims in an efficient manner and
c. making arrangement for systematic conversion of
these resources into useful output.
 Planning (contd)
 Plans have two basic components: Goals and
Action Statement
a) Goals represents the targets and results to
be achieved and
b) Action Statement represents the means by
which an organization goes ahead to achieve
the goal.
 Planning takes into account the organization’s
past records, present status and future
prospects.
 Types of Plans
Plans are fundamentally of three types
1.Hierarchical Plans
2.Frequency of Use Plan
3.Contingency Plan
 Hierarchical Plans
 Definition. A planning hierarchy represents
the organizational levels and units in your
company for which you want to plan. A
planning hierarchy is a combination of
characteristic values based on the
characteristics of one information structure .
 For rxample some plans are made by top level
management while some plans are prepared by
middle even lower level management
 Types of Hierarchical Plans
1. Strategic Plan: defines the organization’s
long term vision and the way make it a reality.
It is done by the top level management.
2. Administrative plans made by the Mid-level
Management to allocate organizational
resources and coordinate internal sub-
divisions of the org.
3. Operational Plans made by the lower mgt. to
determine how specific task could be best
accomplished. These are designed to govern
the workings of the technical core of the
organization.
 Frequency-of-Use Plans
 Frequency-of-Use Plans
a. 1. Standing Plans
b. 2. Single Use Plans
1. Standing Plans: are drawn to cover issues that
managers face frequently. Examples of Standing
Plns are
 Policies: define an area within which decisions are
to be made.
 Policies allow managers to use their discretion
 Standing Plans
 Rules: spells out specifically what employees
are to do or not to do in a particular situation.
 For example ‘ Smoking not allowed is a rule
 Procedures: establish a required method of
handling future activities,
 (For example, procedure of admission in the
university of Dhaka or procedure for Hiring a
clerk for an orgamisation)
 Single Use Plans
A single use plan used for one time after which it
becomes invalid or unusable. Examples are:
 Programs: determine major steps and set time
frame for achieving objectives.
 Programs are usually supported by budgets
(Examp. Food for Work program or ‘Kabikha’)
 Projects: A project is a single step in a
program.(Exam: a Project under ‘Kabikha’)
 Budget: A budget is a program expressed in
numerical terms. Example sales budget of a
company.
 3. Contingency Plan
 A contingency plan is a plan devised for
an outcome other than in the usual
(expected) plan.[1]
 It is often used for risk management when
an exceptional risk that, though unlikely,
would have catastrophic consequences.
Contingency plans are often devised by
governments or businesses. For example,
suppose many employees of a company
 3. Contingency Plan (Contd)
are traveling together on an aircraft which
crashes, killing all aboard. The company could
be severely strained or even ruined by such a
loss. Accordingly, many companies have
procedures to follow in the event of such a
disaster. The plan may also include standing
policies to mitigate a disaster's potential impact,
such as requiring employees to travel
separately or limiting the number of employees
on any one aircraft.
 3. Contingency Plan (Contd)
 During times of crisis, contingency plans
are often developed to explore and
prepare for any eventuality. During the
Cold War, many governments made
contingency plans to protect themselves
and their citizens from nuclear attack.
Examples of contingency plans designed
to inform citizens of how to survive a
nuclear attack are the booklets like--
 3. Contingency Plan (Contd)
 A. Survival Under Atomic Attack,
 B. Protect and Survive, and
 C, Fallout Protection, which were issued
by the British and American governments.
 Today there are still contingency plans
in place to deal with terrorist attacks or
other catastrophes.
Steps in Planning
1. Being aware of opportunities
2. Establishing Objectives
3. Developing Premises
4. Determining Alternative Courses
5. Evaluating Alternative Courses
6. Selecting the best Alternative
7. Formulating Derivative Plans
8. Numbering plans by Budgeting
 Benefits of Planning
 There are many ways to state the benefits of
planning or anticipatory decision making. The
following claimed benefits are discussed in a
number of sources
 Planning establishes objectives and standards.
Along with planning managers have to develop
standards or yardsticks so that they can have
time to time review of how far they have come
across the road.
 Benefits of Planning
 Planning establishes coordinated
effort.
It gives direction to managers and non-
managers alike. When all concerned
know where the organization is going and
what they must contribute to reach the
goal, they begin to coordinate their
activities , cooperate with each other and
work in teams.
 Benefits of Planning
 Planning reduces uncertainty by anticipating
change.
When every managers are aware of their
destination and surely a deadline is there, their
performance criteria become very evident. They
put their effort toward goal achievement, can
take measures beforehand to reduce the impact
of any change. Planning insists managers to be
proactive. .
 Benefits of Planning
 Planning helps a manager exercise more control in
a situation, establish goals "proactively" and
consider contingencies
 Planning helps allocate limited resources like staff,
materials, and time in an orderly and systematic
manne
 Planning helps a manager exercise more control in
a situation, establish goals "proactively" and
consider contingencies.
 Planning can help quantify goals and establish a
means of measuring success
Defining Strategy
 Strategy refers to the determination of the
purpose or mission and the basic long
term objectives of an enterprise and the
adoption of courses of action and
allocation of resources necessary to
achieve these aims.
Features of Strategic Plan
 Strategic Plans are long term in nature
 They are comprehensive and cover wide
range of organizational activities
 They integrate, guide and control
organizational activities
 They set the boundaries for managerial
decision making.
Four Alternative Strategies of the TOWS
matrix
TOWS means:
 T stands for threat
 O stands for opportunities
 W stands for weakness
 S stands for strength
Strength of a Firm
 Human resource, management philosophy,
corporate culture, fund- are the major
strengths of a firm.
 To acquire potential resource at a competitive
rate companies are off shoring to countries
like China, India, Mexico etc.
 To more gain on strength one easy way could
be taking over other company. By acquiring
Grindlays Bank in Middle East and South asia
StanChart has almost doubled its strength.
Weakness of a Firm
 Weaknesses can grow from the very same
source as the company gains strength if the
situation is just opposite.
 When weaknesses are identified they could
be overcome. But if problem lies with the
culture of the organization it is most difficult to
overcome.
 Potential human capital can be attracted if
they are offered a high pay, but retaining
them depends largely on management
philosophy and culture.
Opportunities of a Firm
 Opportunities lie in the external environment.
Companies search out for opportunities throughout
the world.
 Car manufactures from around the world have rushed
into China overseeing the huge growth opportunity in
the auto market in the short run. Where people are
getting rich that locality offers opportunity for many
companies. Our garment sector has provided jobs to
many women increasing their disposable income.
 To tap into the opportunity companies like Lever,
Square, and other toiletries producers have
introduced mini pack version for many products so
that customers can match their pocket.
Threat of a Firm
 Threats also lie in the external environment.
Competitor is the major source of threat.
Even position of an established company
could be in stake if any new entrant unveils
with new technology or innovative idea and
snatching away shares.
 To deal with threats companies need to be
alert about competitors activities. One best
way to reduce threat is to be always updated
with modern technological advancement.
Four Alternative Strategies of the TOWS
matrix
1. WT strategy: aims at minimizing both
weakness and threat
2. WO strategy: attempts to minimise
weakness and maximize opportunity
3. ST strategy: is based on organization’s
strength to deal with the threat of the
environment
4. SO strategy: Where the company can use
its strength to take advantage of
opportunities
Portfolio Matrix : A Allocating
Resources
The Business Portfolio Matrix was
developed by ‘Boston Consulting Group’
in 1970
There are Four areas in grill namely
a. Stars
b. Cash Cows
c. Question marks aand
d. Dogs
Portfolio Matrix : A Allocating
Resources
a. Stars:High growth and strongly
competitive position
b. Cash Cows: with a strong competitive
position and a low growth rate
c. Question marks: With a weak market
share and high growth rate
d. Dogs: Business with a low growth rate
and a weak market share.
Strategic Planning Process
 Step-1: Planning Awareness: To take
thorough stock of org. mission, goals,
performance, liabilities and achievements.
 Step-2: Formulating Goals: Clearly spell out
of what an org. wants to achieve in the future.
 Step-3: Analyzing external environment: the
factors that might affect org. activities
 Step-4: Analyzing internal environment:
assessing the strength and weakness of the
organization
Strategic Planning Process (contd.)
 Step 5: Identifying Strategic Opportunities
and Threats: Identifying the Opportunities to
achieve the goals and threat that could
hamper and halt them
 Step 6: Performing Gap Analysis: Finding
out the gap between the intended results and
the achieved results under the current
strategy.
Strategic Planning Process (contd.)
 Step 7 : Developing Alternative Strategies:
It allows the revision of current strategies for
reducing gaps between expected and actual
results.
 Step 8 : Implementing Strategy:
Implementing the plans at each level of the
organization.
 Step 9: Measuring & Controlling Progress:
Evaluating the effectiveness of the strategy
and taking necessary steps accordingly.
Major Kinds of Strategies and Policies

 Growth
 Finance
 Organization
 Personnel
 Public Relation
 Product or Services
 Marketing
Success Criteria of an Strategy
 External Consistency: How far the strategy is
consistent to cope with ext. environment
 Internal Consistency : How far the strategy is
consistent to use org. resources
 Competitive Advantage: Is the strategy helpful to
do better than the competitors?
 Degree of Risk: Is the risk consistent to return?
 Contribution to Society: Is the strategy socially
desirable?
 Motivation: Is the strategy contributing to the
commitment of the working force?