TOPIC4 PLANNING

TOPIC

PLANNING

 

Specific Objectives

By the end of this sub-module unit, the trainee should be able to:

  1. Explain the nature and purpose of planning
  2. Outline the types of plans
  3. Explain ways of making planning effective
  4. Explain the principles of

 

  • Planning is the most fundamental function of management. It determines the course of action to achieve the desired
  • Planning therefore is the outlining of things to be done, the people to do those things and the method to accomplish the objectives of the
  • It is deciding in advance what to do, how to do it, when to do it and who to do it. Planning is characterized by thinking before
  • Planning precedes all other managerial functions because without set goals to be reached and lines of action to be followed, there is nothing to organize, direct or control.

 

Nature and characteristics of planning.

  1. Planning is goal oriented – i.e. it is a means towards accomplishment of objectives.
  2. Planning involves the selection of the best course of
  3. Planning is mainly concerned with looking ahead into the
  4. Planning is required at all levels of managements (its all pervasive)
  5. Planning is flexible as it is based on future conditions which are too
  6. Planning is a continuous and unending process. (Assumption and events on which plans are based change therefore old plans have to be reused periodically).
  7. Planning governs the survival, growth and prosperity of an
  8. Planning is the basis of all management

 

ADVANTAGES OF PLANNING

  • Planning facilitates the process of decision
  • It helps management to implement programmes in a systematic
  • Planning helps organizations adjust to changing environments and therefore helps reduce risks and
  • Objectives of the organization can easily be achieved through proper planning.
  • Planning facilitates optimum utilization of the available resources. The most efficient and economical methods are
  • It encourages a sense of involvement and team spirit that in turn increases motivation.
  • Planning facilitates the process of control in the organization. Sound planning enables the management to control events rather than to be

 

controlled by them since planning provide standards against which performance is evaluated.

  • Planning serves as a training device for future

 

LIMITATION OF PLANNING

  • Planning is an expensive exercise in the
  • It is a time consuming
  • It makes the entire organization set up extremely rigid as people have to follow the laid down plan. This may curb initiative and individual freedom and sometimes may cause
  • Planning is based on forecasts which are never 100%
  • Elasticity of plans makes planning a cumbersome process.
  • Planning encourages a false sense of security against risk and
  • The effectiveness of planning may be affected by external forces which are beyond the control of those responsible for preparing
  • Some managers may have a negative mental attitude towards planning. They may consider the present more important than the future and may resist

 

TYPES OF PLANS

A plan is a projected course of action. FEATURES OF A GOOD PLAN

A good plan should have the following features;

  • It should be based on clearly defined objectives
  • It should be simple
  • It should provide for proper analysis and classification of
  • It should be relatively stable, balanced and well
  • It should use all the available resources and opportunities before creating new resources.
  • A good plan should be realistic and viable. This means that it should be implement
  • It should open up new avenues and ways of doing things and reveal specific opportunities previously unknown to the

 

 FORMS AND TYPES OF PLANS

  1. Long term planning

It covers a period more than five years though it can be extended up to twenty years or so. It is not about planning or future decision but planning the future impact of today’s decision. Prepared after an analysis of the business environment and may require change in organization structure and activities. Long term plans are developed by top management to guide the future efforts of the enterprise.

 

  1. Short term planning

 

It is formulated by lower level management to programme the efforts and operations of the organization for the immediate future. It refers to determination of courses of action for time periods exceeding up to three years. It is a short term plan is relatively more precise and less flexible.

 

  1. Strategic planning

It refers to the process of formulating unified comprehensive and integrated plan relating to strategic advantages of the firm to the challenges of the environment.

It involves appraising the external environment in relation to the enterprise, identifying the strategies to be adopted in future to achieve the objectives.

It is long term in nature. It is comprehensive concerned with the total enterprise. Strategic plans are therefore formulated mainly at the top level of management. It has mainly an external focus at it is designed to achieve the organizational objectives in the face of environmental opportunities and threats. It indicates how and where the firm will position itself within its environment.

 

Advantages of strategic plans

  1. It identifies the opportunities and threats which the firm is likely to face in
  2. It determines the future direction of a company
  3. It defines the manner in which the resources of the enterprise are to be
  4. It lays down systematic and logical procedures for carrying out the operation of the
  5. It provides a basis for the formulating of operational plan
  6. It facilitates coordination between the different division and department of the enterprise.

 

 

Strategic planning involves

 

  1. Defining the organizational mission
  2. Analyzing the situation (internal and external environment)
  3. Selecting organizational goals and objectives
  4. Determining the policies and strategic programs necessary to achieve goals
  5. Establishing methods necessary to ensure that policies and strategic programs are implemented.
  6. Matching the selected strategies with identified opportunities and threats in the external

 

Features of strategic planning

  1. It deals with fundamental basic problems of providing answers to such questions as:
    1. What is our business
    2. What business are we supposed to be in?
    3. Who are out customers? Who should they be?
    4. What is the unique thing that we can provide?

 

  1. It provides a basis for detailed planning and for day to day managerial decisions
  2. It involves a longer time frame than other forms of planning
  3. It is a top level activity
  4. It provides guidance and boundaries for operational planning

 

Strategic planning process

 

 

  1. Goal formulation

This steps defines the mission of the organization and established the objectives that will help translate the mission into concrete term

 

  1. Identification of current objectives and strategies

Managers must identity the objectives that are already in place and see how well they fit in the newly defined mission

 

  1. Environmental analysis

This tries to identify which aspects of the environment will have the greatest impact on the organizations ability to achieve the objectives.

 

  1. Resource analysis

This identifies the organizations competitive advantages and disadvantages. The profiles of the organizations resources should be developed, key success requirements to determine the manager strengths on which strategy can be based should be considered.

  1. Identification of strategic opportunities and threats
  2. Determine the extend o strategic change required

The aim is to see whether depending on the various resources and the environment the existing strategy needs to be changed.

  1. Strategic decision making

This involves identifying, evaluating and selecting alternative strategic approaches.

  1. Strategic implementation

 

This involves incorporating the selected strategy into the daily operations of the organization

  1. Measurement and control of progress

Progress of the strategy is monitored in order to ensure the implementation is going as planned and that the strategy is achieving the intended results.

 

  1. Operational planning/ tactical planning

It is a short term exercise designated to implement the strategies formulated under strategic planning. They are plans which have a moderate scope and intermediate time frame.

 

  1. Functional planning

Functional plans are prepared for various functional areas of business. Examples include production planning, marketing planning financial planning and manpower planning.

Every functional plan serves as a guide for people in a particular department.

 

  1. Standing or multi-use planning

These are recurring plans and they are used repeatedly in situations of a similar nature. Examples include objectives, policies, strategies, procedures and rules.

 

  1. Single use or Adhoc planning

These are plans set up to handle events that happen only once and then it is discarded when the situation or event is over examples include programmes, budgets, projects schedules.

OTHER TYPES OF PLANS

 

  1. VISION

This refers to the unique dream of the organization. It explains the position the organization desires to be achieved in the future.

 

  1. MISSION STATEMENT

This is a central guiding concept, describing the fundamental reason for the existence of an enterprise or organization. It gives a clear cut idea about the basic long term commitment of an organization and is the basis for developing organizational objectives.

A mission statement of an organization therefore, is a unique aim that sets the organization apart from others of its type.

 

  1. ORGANISATIONAL OBJECTIVES

Organizational objectives are goals or targets towards which an organization directs its efforts. They maybe established on areas such as;

  • Market standing

 

  • Innovation productivity
  • Resource level
  • Profitability
  • Managers performance and development
  • Social responsibility
  • Work performance and attitude

 

ESSENTIAL CHARACTERISTICS OF GOOD OBJECTIVES

Sound objectives should posses the following feature;

  • They must be clear and specific so as to avoid confusion and
  • They should be measurable so as to act as standards for
  • Objectives must be result oriented and as such focus on results rather than work.
  • They should as much as possible be in written form in order to act as reference and reminder.
  • Objectives should be realistic and
  • They must also be well coordinated

 

 

IMPORTANCE OF OBJECTIVES

  • Clear objectives leads to unified plans
  • Objectives act as motivators to those who are assigned tasks to accomplish them.
  • The lead to unity of direction for organizational
  • The serve as rationale for resource
  • Unproductive tasks can be avoided when work is goal
  • Objectives act as standards for control of
  • They act as sound basis for developing administrative

 

BARRIERS TO EFFECTIVE GOAL SETTING.

  • Educating and training managers on goal
  • Making available enough resources to assist in goal setting.
  • Low Morale of
  • Lack of
  • Lack of coordination.

 

MANAGEMENT BY OBJECTIVES (MBO)

 

MBO is a system of Management where the organization strives to attain its goals while at the same time meeting the goals and satisfaction of each member in the Organization. MBO Involves effective participation and involvement by each member of the Organization.

 

 

CHARACTERISTICS OF MANAGEMENT BY OBJECTIVES (MBO)

  • MBO focus on goals and their achievement
  • MBO is characterized by high degree of participation of the concerned people in goal setting and performance appraisal.
  • MBO tries to inter-relate goals in the
  • MBO aim at improving relationships in
  • Optimization of
  • Multiple accountability:

STEPS INVOLVED IN MANAGEMENT BY OBJECTIVES

  1. The manager explain the rational and methodology of MBO to subordinates
  2. The superiors and subordinates meets to set the objectives for the coming period
  3. Superiors and subordinates agree o n the subordinates goals
  4. Subordinates are then given necessary advise and resources required
  5. Subordinates are then given enough time to pursue their goals at one’s own pace
  6. Each time the superiors hold periodic meetings with the subordinates to evaluate the degree and goal attainment
  7. At the end of a specified time period, the superiors and subordinates hold meetings to assess whether the goals have been attained
  8. If the subordinates have achieved their goals they should be rewarded and asked to set other goals
  9. At the conclusion of the time period set for the achievement of the objective a final review is conducted and necessary action is taken
  10. In cases the subordinates do not attain the goals corrective action is taken and the subordinate is asked to go back again

ADVANTAGES OF MANAGEMENT BY OBJECTIVES (MBO)

  • MBO forces managers to think in term of results rather than activities. This leads to improved
  • MBO provides a basis for training and development
  • MBO provides a basis for performance appraisal (help evaluate employees)
  • MBO leads to participatory management which may increase workers Motivation and
  • MBO saves top management time to address other Organizational
  • MBO may lead to good health manager and subordinate
  • It’s a basis for reducing conflicts and resistance to

DISADVANTES OF MANAGEMENT BY OBJECTIVES

  • Its time consuming in case of large
  • MBO involves a lot of paperwork making it very
  • There may be a problem of participation by some
  • Objectives are difficult to set especially if they owner along
  • MBO Inflexible / rigid.

 

  • MBO emphasizes of short term goals at the expense of long term
  • The Organization may over emphasis on quantitative goals at the expense of qualitative

 

POLICIES

 

Policies are general statements which guides thinking in decision making. A policy defines the limit within which decisions can be made and achieved.

Thus policies are statements which provide ready answer for day to day members of the organization.

 

TYPES OF POLICIES

  1. Originated Policies

these are deliberately formulated by top manages on their own initiative holder to guide the actions of their subordinates.

  1. Appealed policies

These are formulated on requests / appeals of subordinates.

  1. Imposed policies

Are those policies that arise from the influence of offside forces like government, trade unions e.t.c

  1. Implied Policies

Are those policies inferred from the behaviours or conduct of organization al members particularly the top executives. (Interpreting the action of the boss) e.g. promotion made on the basis of seniority.

 

 

ESSENTIAL CHARACTERISTICS OF SOUND POLICIES

  • Should be based on the objectives of the organization & also contribute towards attainments of
  • Should make for consistence in the operations of the
  • Should be relatively stable
  • Should be flexible i.e. give room for
  • Should be clear, unambiguous and explicit .It should not leave scope for misinterpretation.
  • Should be reviewed & revised regularly so as to be
  • Should be communicated to the concerned
  • Should be consistent with the ethical behaviors of the
  • Should be based on careful consideration of resources and environment of the organization.

 

POLICY FORMUTATION PROCESS

The process of policy formulation involves the following steps

  1. Definition of the policy area

The policy area should be decided in view of the objectives and needs of the Organization.

 

  1. Identification of policy alternatives

Alternatives policies are developed in light of both internal and external environments of the organization.

  1. Evaluation of alternative

The Identification policy alternatives are evaluated in terms of their contribution to the organizational Objectives, cost and implication.

  1. Choice of policy

The most appropriate policy is chosen.

  1. Communication of policy

The policy should be communicated to those concerned with its implementation.

 

IMPORTANCE OF POLICIES

  • They facilitate quick and correct decisions by serving as guides to thinking and action.
  • The save time and effort by pre-deciding
  • Effective policies lead to unfired pattern of action
  • Good policies assist in training & orientation of new
  • They permit delegation of authority to lower level employees: – subordinates can understand their tasks and what is expected of
  • Policies bring about coordination of organizational

 

PROCEDURES

A procedure is a step by step process showing how to handle/ undertake a certain activity. It lays down the specific manner in which a particular activity is to be preformed.

 

ESSENTIALS OF A GOOD PROCEDURE

  1. Should be simple and straight forward to be
  2. Should be put in written for reference
  3. Should be tested before
  4. Must be reviewed and revised regularly to keep them up to
  5. Must be consistent with the objectives of the
  6. Should be communicated to those

 

IMPORTANCE OF PROCEDURES

  1. Simplify work by eliminating unnecessary
  2. Ensures consistence of operations in the organization thus eliminating
  3. Provides standards for appraisal of employees.
  4. Minimizes wastage of Organizational
  5. Indicates a standard way of performing work and therefore ensures uniformity of action
  6. It eliminates need for further decision making by laying down a standard path to follow.

 

RULES

Rules are prescribed guide to conduct. They specify what to be done and what may not be done in a given situation. They do not give any room for decision making. They are in the nature of commands seeking to structure, discipline and restrain behaviour of a group in formal organization

 

METHOD

A method outlines the specific way in which a particular step in the procedure is to be performed. It specifies the mechanical way by which an operation is to be performed.

 

 

PROGRAMMES

Is a single use plan which contains a series of actions designed to accomplish a given task. A programme specifies;

  • Steps to be
  • Resources to be
  • Time limit for each
  • Task

BASIC STEPS IN PROGRAMMING.

  • Divide various activities needed into clear cut
  • Arrange the steps into a
  • Allocate responsibilities to particular
  • Allocate time duration for each
  • Determine the other resources
  • Write down the

 

PROJECTS

A project is a scheme for investing resources. It usually contains time bound activities which have to be accomplished over time.

 

SCHEDULES

Scheduling is the process of establishing time sequence for work to be done schedule prescribes the exact time when each activity should begin and end.

Starting and finishing dates for different activities

They are essential for avoiding delays and for ensuring continuity.

 

STANDARDS.

Is a criterion against which performance is compared and evaluated? It is a guide for performance evaluation.

 

BUDGETS

Is a statement of anticipated results expressed in numerical terms for a specific period of time in future.

Budgets are usually prepared for certain duration of time.

 

 

WAYS OF MAKING PLANNING EFFECTIVE

 

REASONS WHY PEOPLE FAIL IN PLANNING

  • Lack of commitment to planning
  • Failure to develop and implement sound
  • Lack of managerial objectives and
  • Underestimation of the importance of planning premises
  • Excessive reliance on
  • Lack of support from the top management
  • Lack of adequate control measures

 

OVERCOMING PLANNING BARRIERS

  • Planning should not be left to chance. A climate conducive to planning should be created in the
  • Planning must start at the top. Top management initiative and support is essential for effective
  • Planning should be definite, that is time specific and
  • Plans must be properly communicated to all those concerned in the
  • Long range planning should be integrated with short range
  • Planning must include awareness and acceptance of change as a necessary
  • Planning must be organized to allow for a wider participation in the formulation and execution of
  • Plans should be flexible to allow for easier adoption to the changing
  • Managers need to be educated and trained on the art of planning and the need for the
  • Plans should be revised regularly to ensure that the premise, on which they were based on, still

 

PRINCIPLES OF PLANNING

  1. The Principals of contribution to objectives

This means that planning aims at facilitating the achievement of organizational goals. therefore a good plan should indicate how the stated objectives will be achieved.

  1. The principle of primacy of

It states that planning comes first in all managerial functions and therefore each manager must start with planning.

  1. Principle of efficiency of plans

It states that the goodness or efficiency of a plan should be measured by its contribution to the objectives as offsets by the costs.

  1. Principle of planning premises

It states that the better the understanding of the planning premises the more coordinated the plans are.

  1. The principle of strategy and policy Framework

It states that the more strategies and policies are carefully developed and understood, the more the consistent and effective the plans are expected to be.

 

  1. Principle of commitment

It states that good planning should allow a period in future necessary to foresee the accomplishment of plans.

  1. Principle of flexibility

It state that each plan must give room for corrections and therefore plans should not be rigid.

  1. Principle of Limiting Factor

It states that each plan must identify the limiting factors or critical points that are likely to affect the plans.

  1. Principle of navigational change

It states that each good planning requires continuous revision such that planning is a continuous process.

 

Decision making

The work of a manager involves working on decisions and constantly solving problems. The manager therefore has to confront problems and make effective decisions on what action to take.

Decision making refers to the process that leads to the selection of an alternative between two or more competing alternatives.

 

Steps in decision making

  1. Identify And Define The Problem

A problem is half solved when it is well defined. Accurate dignosis of the problem is necessary to find the right solution. This step should result in a statement of the desired result. Cause, magnitude and boundaries within which it can be solved is also identified.

  1. Analyse the Problem

This step involves collection of all facts that are pertinent to the decision. The data collected must be classified and analysed.

  • Develop Alternative solutions

Alternatives are possible courses of action. Identify various possible courses of action.

  1. Evaluate The Alternatives

The developed alternatives are then evaluated on the basis of their contribution to the organizational goals and the limiting factors involved. (Risks, economy, timing, other resources)

  1. Select The Best Alternative

Evaluation of alternatives will reveal the best alternatives. This is where the real choice is made and a plan of action adopted.

  1. Implement The Decision

Implementation of the decision involves developing detailed plans, communication of decisions, gaining acceptance of decisions and cooperation of those concerned.

  • Follow Up

Actual results of the decisions should be compared with the expected results and appropriate action taken.

 

EVALUATION

  1. Explain the nature and purpose of
  2. How can managers make planning effective?
  • Describe the strategic planning process
  1. Explain the principles of planning

 

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