LYDON EARL G.

MIGUEL
Objectives:

1.Understand what managerial

planning is and why it is important
2.Identify and analyze the various
types of plans and show how they
relate to one another
3.Outline and discuss the logical steps
in planning and see how these steps
are essentially a rational approach
to setting objectives and selecting
the means of reaching them
4.Explain the nature of objectives
5.Describe how verifiable objectives
can be set for different situation
“ Planning is the selecting and relating of facts
and the making and using of assumption
regarding the future in the visualization and
formulation of proposed activities believed
necessary to achieve desired results .” GEORGE R. TERRY

“Planning is the selecting and relating of facts

and the making and using of assumption
regarding the future in the visualization and
formulation of proposed activities believed
necessary to achieve desired results .”
Dalton E.Mcfarland
It is also important to point out that planning and controlling are inseparable - the
Siamese twins of management.

Figure 1 Close Relationship of Planning and Controlling

 Purpose of Planning
1. Provides direction (coherent pic of organization)
2. Reduce uncertainty (Considering Future)
3. Minimizes waste and reduces overlapping activities
4. Sets the standard for controlling (budgeting)
8 TYPES OF PLANNINNG
MISSION
GOALS AND OBJECTIVES
STRATEGIES
POLICIES
PROCEDURES
RULES
PROGRAMS
BUDGETS
 MISSION
The basic purpose or function or tasks
of an enterprise or agency or any part
of it.

For example:

The Purpose of a business generally is

the production and distribution of Good
and services.
The purpose of a highways department
is the design, building, and operation of
a system if highways.
The purpose of the courts is the
interpretation of laws and their
application.
• The ends toward which activity is
aimed. They represent not only
the end point of planning but
also the end toward which
organizing, staffing, leading, and
controlling are aimed.
 STRATEGIES
• The determination of basic
long-term objectives of an
enterprise and the adoption of
courses of action and
allocation of resources
necessary to achieve these
goals.
• General Statements or understanding that guide or
channel thinking in decision-making.
• May strictly follow-perhaps for convenience rather than
as policy- the practice of promoting from within: the
practice may then be interpreted as policy and carefully
followed by subordinates.

• In fact, one of the problem of managers is to make sure

the subordinates do not interpret as policy minor
managerial decisions that are not intended to serve as
patterns.
 There are many types of policies.

• Examples include policies of hiring only university-

trained engineer, encouraging employee suggestion
for improved cooperation, promoting from within,
conforming strictly to a high standard of business
ethics, setting competitive prices, and insisting on
fixed, rather than cost-plus pricing.
• Plans that establish a required
method of handling future
activities.
Example

• Illustrate the relationship between procedures and

policies. Company policy may grant employees vacations;
procedures established to implement this policy will
provide for scheduling vacations to avoid disruption of
work, setting rates of vacation pay and methods for
calculating them, maintaining records to ensure each
employee of a vacation, and spelling out the means for
applying foe leave.
• Spell out specific required
action or non-action,
allowing no discretion.
For example:
• Workers have to prepare and sign their own time cards.
The supervisors has to check each card; if one is
incorrectly filled, the worker involved has to make the
correction, which then has to be initiated by the worker
and the boss.

The original entry must not be erased so that it can be

checked later. Also, general dynamics was required to
establish tight rules for changing overhead expenses.
A complex of goals, policies,
procedures, rules task assignment,
steps to be taken, resources to be
employed, and other elements
necessary to carry out a given course
of action.
Example

• The airlines company program to acquire a $ 400 million

fleet of jet or a five-year program to improve the status
and quality of its thousand of supervisions. Or they may
be as minor as a program formulated by a single
supervisor to improve the morale of workers in the parts
manufacturing department of a farm machinery company.
A statement of expected
results expressed in
numerical terms.
Characteristics Of Planning Function

• Various facts need to be known

about planning to apply them
properly in management
planning examples which are
discussed as characteristics
under follows:
Planning Is Goal-Oriented Purposeful

• Planning determines both long term and short-term goals of an

organization. It not only decides the objectives but also chooses
the ways and means of achieving them.

• Thus, management planning examples is purposeful as the whole

process aims at achieving goals most effectively and efficiently.
The planning function of management has no meaning until it
contributes to the achievement of objectives.
Primacy of Planning

• It is also called a basic or primary planning function of

management because it lays down the base for other
functions. All other management functions are performed
within the framework of plans. Thus management
planning examples precede other functions which are
also termed as the primacy of planning.
Planning Is Pervasive Or Universal
• It is required in every organization whether business or non-business, profit or
non-profit, military, club, school or hospital, etc. Planning needs to be done
whenever any human activity takes place.

• Management planning examples is also required at all levels of management

like top-level plans for the overall organization, middle-level plans for their
respective departments and the lower level for day-day planning. Planning Is
Pervasive Or Universal
Planning Is Continuous

• Planning is continuous as it goes on without any break or

gap in an organization till the end of its life. Managers
cannot stop planning throughout the lifetime of the
organization.
• Once the plans are made for a particular time, they are
reviewed, revised and corrections are made leading to re-
planning. thus the management planning examples cycle
is never-ending in which plans are made, implemented
and replanned.
Planning Is Futuristic

• Planning is called looking ahead because it is done in

advance for a future period. It involves predictions for
which forecasting techniques are used. Management
planning examples includes looking into the future,
analyzing it and deciding a future course of action
beforehand.
• An example of planning in management process, an
annual sales plan is made based on an estimate of future
sales.
Planning Involves Choosing From The Alternatives

• Management Planning examples involves making

decisions because managers face many alternatives
options when they make plans. For this, they identify the
most suitable option. Plans won’t’ be needed if there were
not many choices available. Once a choice is made,
detailed plans are made to implement it.
Planning Is A Mental Exercise

• Since management planning examples require the

application of mind and thinking skills it is termed as a
mental exercise. It is an intellectual exercise for which
managers need mental abilities such as imagination,
reasoning, judgement, forecast etc. It requires logical and
systematic thinking rather than guesswork.
Steps of Planning
 1. Being aware of Opportunities

• Although it precedes actual planning and is therefore not

strictly a part of the planning process, an awareness of
opportunities

• In the external environment as well as within the

organization is the real starting point for planning.
 Example

• All managers should take a preliminary look at possible

future opportunities and see them clearly and completely,
know where their company stands in light of its strengths
and weaknesses, understand the problems it has to solve
and why, and know what it can expect to gain.
 2. Establishing Objectives

• The second step in planning is to establish objectives for the

entire enterprise and ten for each subordinate works unit.
• This is to be done for the long term as well as for the short
range
• Objectives specify the expected results and indicates the end
points of what is to be done, where the primary emphasis is to
be placed, and what is to be accomplished by the network of
strategies, policies, procedures, rules, budget, and programs.
 3. Development Premises

Premises assumptions about the environment in which the plan

is to be carried out.

Principle of planning premises the more thoroughly individuals

charged with planning understand and agree to utilize
consistent planning premises, the more coordinated enterprise
planning will be.
 4. Determining Alternative Courses

• The fourth step in planning is to reach for and examine

alternative courses of action, especially those not
immediately apparent.
 5. Evaluating alternative courses

• After seeking out alternative courses and examining their

strong and weak points, the next step is to evaluate the
alternatives by weighing them in light of premises and
goals.
 6. Selecting a Course

• This is the point at which the plan is adopted-the real

point of decision-making. Occasionally, an analysis and
evaluation of alternative courses will disclose that two or
more are advisable, and the manager may decide to
follow several courses rather than the one best come.
 7. Formulating Derivative Plans

• When a decision is made, planning is seldom complete,

and a seventh step is indicated. Derivative plans are
almost invariably required to support the basic and
general plan.
 8. Quantifying Plans by Budgeting

• The overall budget of an enterprises represents the sum

total of income and expenses, with resultant profit or
surplus, and the budgets of major balance sheet items
such as cash and capital expenditures.

• Budgets become a means of adding the various plans

and set important standards against which planning
progress can be measured.
 Coordination of short and long-range plans

• Short range plan = 1 year or less

• Intermediate range plans = 1 to 2 years
• Long range plans= 3 years or more

• Responsible manager should continually review and revise

immediate decisions to determine whether they contribute to long
range plans, and subordinate decision consistent with the
company’s long range goal. Doing this is far easier than to correct
inconsistencies later, especially since short term communications
tend to lead to further commitment along the same line.
 OBJECTIVES
Is verifiable when at the end of the period one can
determine whether or not it has been achieved.

• The goal of every manager is to create a surplus (in

business organizations, this mean profits). clear and
verifiable objectives facilitate measurement of the surplus
as well as the effectiveness and efficiency of managerial
actions.
The nature of objectives

• A manager may have to choose between short-term

and long-term performance, and personal interests
may have to be subordinated to organizational
objectives.
Hierarchy of objectives
The figure above shows the objective form a hierarchy ranging from
the board aim to specific individual objectives. The zenith of the
hierarchy is the purpose or mission, which has two dimension.

1. The social purpose, such as contributing to the welfare of people by

providing goods and services at a reasonable price.

2. Mission or purpose of the business, which might be to furnish

convenient, low-cost transportation for the average person. The
stated mission might be to produce, market, and service
automobile.
Setting Objectives and the Organizational Hierarchy
The figure above also shows the Managers at different levels:

The organizational hierarchy are concerned with different kinds of objective.

• The board of directors and top-level managers are very much involved in
determining the purpose, the mission, and the overall objectives of the firm,
as well as the more specific overall objectives in the key result areas.

• Middle-level managers, such as the vice president or manager or marketing

or the production manager, are involved in the setting of key-result-area
objective, division objectives, and departmental objectives.
• Top-down approach, upper-level managers determine
the objectives for objectives for their positions and
present them to their superior.

• Proponent of the top-down approach suggest that the

total organization needs direction through corporate
objectives provided by the chief executive officer (in
conjunction with the board of directors).
Multiplicity of objectives

For example
Merely stating that a university’s mission is education and research is not
enough.it would be much more accurate (but still not verifiable) to list the overall
objectives.

• Attracting student of high quality

• Offering basic training in the liberal arts and science as well as in certain
professional fields.
• Granting postgraduate degrees to qualified candidates
• Attracting highly regarded professor
Importance of Planning in Management

The importance of planning in

management is to know the
steps in advance that the
managers need to follow or
guidelines to handle specific
situations. Moreover, there are
various other important factors
to make easy for management
planning examples.
Planning Provides Direction

• The actions by deciding in advance what is to be done

and how. It ensures that goals and targets are clearly
stated so that employees are aware of exactly what to
do. Management planning examples ensures unity of
direction and coordination of individual efforts. It helps
the organization in keeping on the right track and move
in the right direction.
Reduces The Risk Of Uncertainty

• Managers predict the future while doing planning and the

future holds uncertainties. There can be opportunities or
risks in future. If they predict any opportunity so they
prepare to avail them and if they have any likely risks so
they try to minimize them.
• Thus, uncertainties cannot only be anticipated but also
eliminated and also preparations can be made to face
them with the help of management planning examples.
Planning Reduces Wasteful Activities And Overlapping

• Other importance of planning in management is that it

serves as the basis of the coordination of individual
efforts. It helps in avoiding confusion and duplication.
• Management planning examples ensure clarity about
the overall goals and the contribution that every
individual has to make to the achievement. Planning
identifies and eliminates useless activities, detects
inefficiencies and takes corrective measures to improve
them.
Promotes Innovative Ideas
• It is often thought that management planning examples
should be followed as it is by the subordinates and they
are not allowed to deviate from it. While the case is a little
different as the managers are required to modify the given
plans according to the changes in the business
environment.
• They must not follow the plans blindly rather should
operate within the framework of plans and make changes.
Thus, it promotes creativity and imagination leading to
discretion.
Planning Facilitates Decision Making

• Managers face many alternative options while making

plans. They identify all the alternatives, compare and
evaluate them to make a suitable choice. Thus
management planning examples are said to be facilitating
decision making.
• They follow the principle of limiting factor while choosing
among the various options. It means that they consider
only suitable options and reject any outwardly unsuitable
ones.
Establishing Standards For Controlling Establishing
Standards For Controlling

• Planning involves setting goals and standards against

which the actual performance of workers is compared.
Managers can find out if they have achieved the required
target.
Planning Process In Management

The Planning process in

management is a decision
making and the following are
the logical steps for every
manager to take:
Setting Objectives
• The first step of planning process in management is to set up
objectives both long and short term. Lon term objectives refer to
the reason for which an organization exists whereas short term
goals include short term targets for various management planning
examples periods.
• Example of planning in management process, the long term
objectives of a school may be to provide good academic services
while short term can be to improve board results during a
particular year.
• Objectives should be stated clearly in precise words because if
the results are clear, it is easier to achieve them.
Limitations Of Management Planning Examples

• Plans sometimes fail despite the best efforts due to the

limitations of planning. These limitations are inherent in
the process of management planning examples or they
result from wrong judgements on the part of the planner.
Planning Leads To Rigidity
• In an organization, a well defines plan is drawn up with
specific goals to be achieved with a specific time frame.
These management planning examples then decide the
future course of action and managers may not be in a
position to change it.
• This kind of rigidity in plans may create difficulty.
Managers need to be given some flexibility to be able to
cope with the changed circumstances. Following a pre-
decided plan may not turn out to be in the organizational
interest when circumstances have changed.
Planning May Not Work In A Dynamic Environment

• The business environment is dynamic and nothing is

constant. The organization has to constantly adapt itself
to changes. Management planning examples becomes
difficult to accurately assess future trends if the economic
policies are modified or political conditions in the country
change or there is a natural calamity.
• For example, competition in the market can upset
financial plans and sales targets may have to be revised
and accordingly cash budgets also need to be modified
as they are based on sales figures.
Planning Reduces Creativity

• Planning is an activity that is done by the top

management. Usually, the rest of the members just
implement these plans as a consequence, middle and
other levels are neither allowed to deviate from plans nor
are they permitted to act on their own. Then much of their
initiative or creativity also gets lost or reduced.
Planning Involves Huge Costs

• When plans are drawn up huge costs are involved in their

formulation. These may be in terms of time, money and
efforts.
For example, collecting and checking the accuracy of facts
may involve lots of time. Detailed management planning
examples require scientific calculations to ascertain facts or
figures.

The costs incurred may not sometimes justify the benefits

derived from the plans. There are several incidental costs
as well, like expenses on boardroom meetings, discussions
with professional experts and preliminary investigation to
find out the viability of the plans.
Planning Is A Time-Consuming Process

• Planning is a lengthy process that involves many steps.

Lots of information is required and it takes time to collect,
analyze, compare, evaluate, and choose among
alternatives.
• Thus, management planning examples become costly
too. Sometimes plan takes so much time to make that
there is not much time left for their implementation. Time-
consuming plans are worthless in case of emergencies.
False Sense Of Security

• The success of an enterprise is possible only when plans

are properly drawn and implemented. Managers have a
tendency to rely on previously tried and tested successful
plans. It is not always true that just because management
planning examples have worked before it will work again.
• This kind of complacency and a false sense of security
may lead to failure instead of success. Planning gives a
false sense of security and because the lower levels take
the plans for granted and ignore the changes required.
Thus, leading to failure of plans.
Psychological Barriers

• Planning sometimes fails due to mental block in the minds

of lower levels. Managers take more interest in the
present than the future and ignore some important
aspects of management planning examples. Also, they
resist changes that introduce by plans and don’t
implement the plans correctly. They take plans lightly and
planning fails as a result
External Limitations Of Planning

• New inventions and innovations in production technology

• Changes in consumers tastes and preferences
• Governmental policies and legislative enactments
• Competitors
• Labor union
• Natural calamities