Planning Notes
Planning Notes
INTRODUCTION
Goals and plans have become general concepts in our society. A goal is a desired future state that
the organization attempts to realize. Goals are important because organizations exist for a purpose
and goals define and state that purpose. A plan is a blueprint for goal achievement and
specifies the necessary resource allocations, schedules, tasks and other actions. Goals
specify future ends; plan specify today’s means. The word planning usually incorporates both
ideas; it means determining the organizations goals and defining the means for achieving them.
DEFINATIONS
According to Robert R Kreitner, “Planning is the process of coping with uncertainty by formulating the
future course of action to achieve specified result”.
According to Richard steers, “Planning is the process by which managers define goals and take the
necessary step to ensure that these goals are achieved”.
According to Ricky W. Griffin, “Planning is setting an organization’s goals and deciding how best to
achieve them”.
1)LEGITIMACY
An organization’s mission describes what the organization stands for and its reasons for existence. It
symbolizes legitimacy external audiences such as investors, customers, and suppliers. The mission helps
them and the local community look on the company in a favorable light and hence accept its existence.
3)GUIDES TO ACTION
Goals and plans provide a sense of direction. They focus attention on specific targets and direct employee
efforts toward important outcomes. Hartford technology services co. for example set goals to establish a
customer profile database, survey customer satisfaction, and secure service agreements with ten new
customers.
5)STANDARD OF PERFORMANCE
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Because goals define desired outcomes for the organization, they also serve as performance criteria. They
provide a standard of assessment. If an organization wishes to grow by fifteen percent, and actual growth
is seventeen percent, managers will have exceeded their prescribed standard.
PROCESS OF PLANNING
Planning means a future course of action. So, in planning future action, there is a necessary step to go for
it. While planning a plan, people must follow these steps to make sure that it will go in a right way to
achieve their goals.
1. Analyze opportunity: This is the pre-step of planning. These step analyzes both internal as well as
external environment. Management must analyze the SWOT (strengths, weakness, opportunity and
threats), which are the changing environmental factors of the business.
2. Setting goals: This is the actual starting point and also the first point of planning. Objectives must be
clear, specific and practical in nature. The entire enterprises and then for each subordinate work unit
should have their objectives.
3. Determination of Premises: After setting the goal, next step of planning is a determination of
premises. Planning premises refers to the anticipated environment which means expected environment.
They include assumption or forecasts of the future. Planning premises may be tangible and intangible or
internal and external.
4. Determination of Alternatives: The next step of planning is a determination of alternatives. There is
various alternative course of action, specially those which are not immediately changed. Management
needs to identify all these alternatives to achieve the organizational goal or objectives.
5. Evaluation of alternatives: After the determination of alternatives, another step of planning process is
an evaluation of alternatives. This is the logical steps to evaluate each and every alternative from cost and
benefits point of view. All identified alternatives are evaluated and compared in terms of their expected
costs and benefits.
6. Selecting a course of action: The next step of planning is selecting a course of action. This is the point
at which plan is adopted. Management selects best course of action or must find out the most suitable
course to follow after evaluating all available alternatives.
7. Formulation of derivatives plans: After selecting a course of action, next step of planning is
formulation of derivatives plans. In this step, plans are formulated for each stage of work, various
supporting plans are developed for each product, department unit and activity.
8. Implementation of plan: After selection of course of action, next step of the planning process is the
implementation of plan. This step brings all the procedure of plan into an action.
9. Reviewing the planning process: This is the last step of planning. In this step, planner should know
about the actual performance. It is the continued function till the organization exists. Management can
take correct action in proper time only. Right decision should be taken at the right time to achieve the
organization objectives in accordance with the plan. It is also important to adopt the changing
environment of the business.
Levels of Planning
Planning is the future base of action. It has different types. It may be classified as per time period, nature
of plans and managerial hierarchy. The planning is preparing either for a short period or long period of
time. Following are the types of planning:
● Strategic plan
● Tactical plan
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● Operational plan
1. Strategic plan: Strategic plan is prepared by the top level management. It is the brand action plans to
achieve the mission and strategies goals. It covers the total organization. It consists of policies, schedules
and program to utilize the available resources of the organization. These plans are mainly concerned with
the determination of organization, long- term goals and formulation realities. Strategic plans are long term
for three, five or more years. They provide long-term direction to the organization.
2. Tactical plan: Tactical plan is prepared by a middle level management. It is prepared for
implementation of corporation plan. In this planning, managers identifies the plans on the basis of priority
of work. Allocation of works and resources are a focus on the basis of programs. It prepares to allocated
divisional activities like finance, personnel, marketing, production and so on. This plays a role of a bridge
between operational and corporate plans.
3. Operational plan:Operational plan is prepared by lower or first line level management. It considers
day to day activities. Such plan is developed by lower level management. These plans have a very short
term focus. It prepares regular production schedule of production department. So, importance should be
given to regular production process.
GOAL-SETTING IN ORGANIZATIONS
Organizational MissionAt the top of the goal hierarchy is the mission—the organization’s reason for
existence—that describes the organization’s values, aspirations, and reason for being. The formal mission
statement is a broadly stated definition of purpose that distinguishes the organization from others of a
similar type. The content often focuses on the market and customers and identifies desired fields of
endeavor. Some mission statements describe company characteristics such as corporate values, product
quality, location of facilities, and attitude toward employees.
Strategic plans define the action steps by which the company intends to attain strategic goals.
A strategic plan is a blueprint that defines organizational activities and resource allocations strategic
planning tends to be long-term.
Strategic goals are broad statements describing where the organization wants to be in the future.
Sometimes called official goals, they pertain to the entire organization rather than to specific divisions or
departments.
Strategic plans define the action steps by which the company intends to attain strategic goals. A strategic
plan is a blueprint that defines organizational activities and resource allocations.Strategic planning tends
to be long-term.
Plans can be categorized on the basis of how frequently they will be used. There are two types of plans
1) Single use plans are plans aimed at achieving a specific goal that once reached, will most likely not to
recur in the future. There are two major types of single use plans
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a) A PROGRAM is a comprehensive plan that coordinates complex set of activities related to a major
non- recurring goals. Programs usually involves several different departments or units of the
organizations. It is composed of several different projects and may take more than one year to complete
4. Determining how each part will be completed and what resources will be necessary
B) A project is a plan that coordinates a set of limited scope activities that do not need to be divided into
several major projects in order to reach an important non-recurring goals
2)Standing plans
Are plans that provide ongoing guidance for performing recurring activities. The three typesof standing
plans are
A policy is a general guides that specifies the broad parameters within which organizational m,emebers
are expected to operate in pursuit of organizational goals. Policies do not normally dictate what actions
should be taken,rather they provide general boundaries for actions.
A procedure is a prescribed series of related steps to be taken under certain recurring circumstances. well
established and formalized procedures are often called SOPs
A rule is a statement that spells out specific actions to be taken or not to be taken in a given situation.
Unlike procedures , rules do not normally specifies a series of steps . instead they dictate what must be
and what must not be done , leaving little flexibility or room for deviation.
A decision is a choice made from available alternatives. Decision making is the process of identifying
problems and opportunities and then resolving them
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Are made in response to situation that are unique, are poorly defined and largely unstructured and have
important consequences for the organizations
Many non programmed decisions involved strategic planning because uncertaininty is great and decisions
are complex. Decision to built new factory, develop a new product or service , enter a new geographical
market or relocate headquarters to another city are all programmed decisions.
3. DEVELOPMENT OF ALTERNATIVES
once the problem or opportunity has been recognized and analyzed ,decision makers begin to
consider taking actions the nest stage is to generate possible alternative solutions tht will respond
to the needs of situation and correct the underlying causes.
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