PLANNING

Planning

- Selection of short- and long-term objectives and the drawing up of tactical and strategic plans to achieve those objectives. In planning, managers outline the steps to be taken in moving the organization toward its objectives. After deciding on a set of strategies to be followed, the organization needs more specific plans, such as locations, methods of financing, hours of operations, and so on. As these plans are made, they will he communicated throughout the organization. When implemented, the plans will serve to coordinate, or meld together, the efforts of all parts of the organization toward the company's objectives.

- Getting ready to do some thing.

- The design of a desired future and of effective ways of bringing it about (Ackoff).

- Planning is a continuing activity since this process goes on and on as long as organizations exist. 

Planning exists everywhere and anytime in our lives. Without planning, we can do nothing and we can achieve nothing.

For example; if someone asks you the following question:

Do you want to go anywhere or somewhere?

Of course your answer will be somewhere because anywhere means you haven’t planned anything yet but if you say that you are going somewhere, it means you have planned about it. 

By planning, you can save time, resources and energy.

What should a plan be?

A plan should be a realistic view of the expectations. Depending upon the activities, a plan can be long range, intermediate range or short range. It is the framework within which it must operate. For management seeking external support, the plan is the most important document and key to growth. Preparation of a comprehensive plan will not guarantee success, but lack of a sound plan will almost certainly ensure failure.

Purpose of Planing

Just as no two organizations are alike, so also their plans. It is therefore important to prepare a plan keeping in view the necessities of the enterprise. A plan is an important aspect of business. It serves the following three critical functions:

Helps management to clarify, focus, and research their business's or project's development and prospects.

Provides a considered and logical framework within which a business can develop and pursue business strategies over the next three to five years.

Offers a benchmark against which actual performance can be measured and reviewed.

Nature of Planning

According to Koontz and O’Donnell, the four basic principles to be dealt with in understanding the nature of planning are:

Primacy of Planning: This deals with the importance of planning for its central role in linking all the other managerial functions.

Pervasiveness (to persuade planning) of Planning: This brings out the ideas that planning is a function and responsibility of every manager, supervisor, and foreman in an organization. 

Contribution to Objectives: Plans are means to achieve some ends and without planning, we can not achieve goals and objectives of an organization.

Efficiency of Planning: Least costly and more beneficial.

Process of Planning 

The Planning is not one shot activity but an endless process as follows: 

- Setting objectives or goals

- Situational Analysis

- Environmental Opportunities

- Course of Action

- Budget Allocations

- Implementation and Review

Setting Objectives:

Objectives are the prime parts of the plan or, planning involves determination of desired future.

Example: you might want to hire some salesmen to increase your market coverage

Situational Analysis: 

An organisation must be realistic in assessing its own strengths and weaknesses in the planning process

Example: Rail road (Pen Central) lost its business because they focus only on weakness not strengths so that their sound strategy could be built on its strengths. 

Environmental Considerations and Opportunities :

It is said that planning leads to success and to achieve this success, new opportunities must be explored.

Example: Technology developments and economic situation are vital considerations.

Course of Action:

Based on the assessment of internal and external conditions and keeping the objectives and goals in mind, an appropriate course of action must be taken.

Designing a course of action gives a formal structure to the plan itself.

In order to choose course of action, various alternative courses of action must be developed.

The alternatives must be realistic in terms of achievement. 

Budget Allocation:

Once the best or optimal course of action is chosen, the next step in the planning process is to set specific targets and allocate resources; these allocations must be stated in quantitative terms

Fixed Budget: Is only for a stated period of time that does not provide allowance for any change in output 

Zero-Based Budget: First used by Texas instruments in 1969, by examining the cost-benefit of all activities and ranking them according to the importance to the overall performance of the organization

Implementation and Review:

The last step in the planning process involves putting the plan into action and see whether it is working.

Implementation Involves:

Co-operation of all the members of an organization, to achieve this co-operation, participation must be encouraged.

A follow-up (top to bottom) procedure and other control mechanism must be provided to increase the effective implementation of a plan.

Types of Plans 

Frequency of use: how frequently a plan is being used, one time or most of the time?

Single use plan: A plan which is used for a single purpose e.g. project.

Standing plan: A plan which is made for the activities performed on repeated basis e.g. discipline, hiring, dismissal, salaries, illness etc

Time frame: 

Long term plan: Plan for the period of more than 3 years.

Intermediate plan: Plan for the period of 3 years.

Short term plan: Plan for the period of one year or less than a year.

To capture the whole market or to become a market leader (long term plan) 

Opening of different offices in different locations (intermediate plan)

Hiring new employees and giving training to existing employees (short term plan)

Breadth (size) wise: 

Strategic plans: long term plans involving a direction e.g. to become a market leader but how? By providing good quality product, good marketing etc.

Operational plans: plans which are made to carry out operational activities like activities in process, short term in nature.

Management By Objectives: MBO

Motivating people by aligning their objectives with the goals of the organization. 

For many people working in modern business environments, it's hard to remember a time when non-managerial employees weren't involved with, and interested in, corporate strategy and goals. We are regularly reminded about the corporate mission statement, we have strategy meetings where the "big picture" is revealed to us, and we are invited to participate in some decisions. And we're aware of how our day-to-day activities contribute to these corporate goals.

This type of managing hasn't been around forever: It's an approach called Management by Objectives; a system that seeks to align employees' goals with the goals of the organization. This ensures that everyone is clear about what they should be doing, and how that is beneficial to the whole organization. It's quite easy to see why this type of managing makes sense - when the parts work in unison the whole works smoothly too. And by focusing on what you're trying to achieve, you can quickly discriminate between tasks that must be completed, and those that are just a waste of valuable time.

Background:

Management by Objectives was introduced by Peter Ducker in the 1950s and written about in his 1954 book, The Practice of Management. It gained a great deal of attention and was widely adopted until the 1990s when it seemed to fade into obscurity. 

Partly, the idea may have become a victim of its own success: It became so much a part of the way business is conducted that it no longer may have seemed remarkable, or even worthy of comment. And partly it evolved into the idea of the Balanced Scorecard, which provided a more sophisticated framework for doing essentially the same thing.

Peter Ducker used this term in 1954 and applied to planning.

In this approach the Boss and Subordinates function as a team in setting objectives and accomplishing those objectives through cooperation.

It has four steps:

Setting goals: supervisors and subordinates collectively set the goals for the organization.

Developing action plan: Action plans are made for both individual and departments. Who is responsible for what action?

Reviewing progress: Is a periodic review to ensure that action plans are working.

Appraising overall performance: weather goals are achieved or not. If goals are achieved, then giving rewards to employees for their good performance.

Evaluation of the whole process is done at the year end.

The evolution of management thought

Current management theory and practice did not just eventuate. It evolved over many years. The evolution of the discipline of management has helped to develop a body of knowledge about the practice of management. Within the field of management, eight schools of thought have contributed significantly to the development of management.

The following table brings together the theories of management and the issues that they address. You should be aware that the main features and theoretical perspectives of each school are not necessarily mutually exclusive and in many cases a particular theory has built upon and refined the work of researchers in other areas.

Theories of management and the problems they address

Theories of management skills
the human relations school	the motivational problem
the organization behavior school	improving the integration of people into organizations
the information and decision school	the management decision-skills problem
Theories of management functions
scientific management	the human productivity problem
the quantitative school	the application of objective functions to management
the strategic management school	the organization long-range planning problem
Theories of organization systems
administrative management	the organization problem
the organization theory school	the organization design problem

 

The following chapter of your textbook discusses the historical origins of management principles and practices. Included are the diverse schools of management thought. The background for each school, its effect on management and its main contributors are identified.

Read this chapter with the view to acquiring a basic uBureaucracy , Fayol's Principals of Management and Frederick Taylor's Scientific Management Theory . Note the contemporary viewpoint starting on page 49, and in particular, Deming's 14 points on how to improve quality.

nderstanding or a 'feel' of how the discipline has developed. You may find the material interesting, particularity the work of Elton Mayo and the Hawthorne Experiments, Weber's

Conclusion

The role of the manager involves continually balancing the needs of the task and the needs of the individual and the whole team. At the same time a manager must be able to focus on the immediate specific issues that require attention.

A manager works with groups and individuals towards goals within the constraints of the organisation and the external environment. Managers make decisions, allocate resources and coordinate the activities of others to achieve goals. One common thread comes through in all of the definitions and textbooks regarding functions to be performed and the skills required of a manager - the importance of managing people.

Think about this - the challenge of management is to create an environment so that people want to come to work in the morning. A positive attitude on your part will improve that relationships with those you work.