The Planning Function of Management Strategic Plans
To best understand the relationship between It is the basic management function the different types of plans, let's start at the which includes formulation of one or top. Strategic plans are designed with the entire more detailed plans to achieve organization in mind and begin with an optimum balance of needs or demands organization's mission. Top-level managers, with the available resources. such as CEOs or presidents, will design and Planning is important in management execute strategic plans to paint a picture of the because it provides security and desired future and long-term goals of the organization to the company. • organization. Essentially, strategic plans look A manager needs to plan the ahead to where the organization wants to be in expectations and regulations that the three, five, even ten years. Strategic plans, company needs. provided by top-level managers, serve as the Planning (is also called forethought) is framework for lower-level planning. the process of thinking about and organizing the activities required to Tactical planning achieve a desired goal. for Martha might include things like testing a Planning is basic or primary function of new process in making pizzas that has been management. proven to shorten the amount of time it takes •Planning is the process of setting goal for prepping the pizza to be cooked or perhaps and selecting best course of action to looking into purchasing a better oven that can reach the goal. It is looking ahead. speed up the amount of time it takes to cook a •Planning is deciding in advance, what pizza or even considering ways to better map to do, who is to do, how to do and out delivery routes and drivers. As a tactical when to do. planner, Martha needs to create a set of Planning bridge the gap between where calculated actions that take a shorter amount of we are and where we want to go. time and are narrower in scope than the •Planning provide target, they allocate strategic plan is but still help to bring the resources in a coordinate manner. organization closer to the long-term goal. •Planning also solve as standard for control. Operational Plans •Planning is mental exercise and Operational plans sit at the bottom of the intellectual process. totem pole; they are the plans that are made by •Planning may be long term and short frontline, or low-level, managers. All term. operational plans are focused on the specific procedures and processes that occur within the •Planning may be strategic, tactical and lowest levels of the organization. Managers operational. must plan the routine tasks of the department using a high level of detail. Frank, the frontline manager at Nino's Pizzeria, is responsible for operational planning. Operational planning Characteristics of Planning activities for Frank would include things like scheduling employees each week; assessing, 1. Intellectual process: - Planning is ordering and stocking inventory; creating a mental exercise and intellectual monthly budget; developing a promotional process. advertisement for the quarter to increase the 2. Future oriented: - Planning is always sales of a certain product (such as the Hawaiian future oriented. pizza) or outlining an employee's performance 3. Goal focused: - Planning aims to goals for the year. achieve goal in future. 4. Pervasiveness of plan: - Planning is Operational plans can be either single-use or needed at all level of management. ongoing plans. Single-use plans are those plans 5. Increase efficiency: -Planning increase that are intended to be used only once. They efficiency. Planning aims to achieve goal include activities that would not be repeated at low cost. and often have an expiration. Creating a 6. Decision making: - Planning and monthly budget and developing a promotional decision making are interrelated. advertisement for the quarter to increase the Planning is selecting right course of sales of a certain product are examples of how Frank would utilize single-use planning. action to reach the goal. Operational plans are made by low-level managers. Ongoing plans are those plans that are built to withstand the test of time. They are Planning Priciples by John C.Maxwell created with the intent to be used several times and undergo changes when necessary. 1) The Principle of Passion When we're passionless, we Contingency Plans procrastinate on the plan or burnout Even the best plans can fail, especially in today's trying to execute it. With passion, we fast-paced, chaotic business environment, and approach our plans with excitement as such, it is important for managers at all levels and a sense of urgency. Passion gives to engage in contingency planning. Contingency planning energy. Passion also gives plans allow a manager to be flexible and planning focus. As Tim Redmond says, changesavvy by providing an alternative course "There are many things that will catch of action, which can be implemented if and my eye, but there are only a few things when an original plan fails to produce the that will catch my heart. It is those I anticipated result. Having a contingency plan consider to pursue." Passion narrows might seem like extra work, but much like a our vision so that the plan dominates reserve parachute when skydiving, it's better to our attention and distractions fade into have it and not need it than to need it and not the background. have it. 2) The Principle of Creativity Of the seven planning principles, we violate the principle of creativity the most. By gravitating to concreteness, we sacrifice creativity. We settle for concentration followed by elimination. what's easy to wrap our minds around, As Peter Drucker observed, and we neglect to wrestle with harder, "Concentration is the key to economic more difficult dilemmas. Leaders are results. No other principle 4 of too busy doing to think and provide effectiveness is violated as constantly ideas. Even the rare leaders who think today as the basic principal of creatively often neglect to encourage concentration. Our motto seems to be, the people around them to do the let's do a little bit of everything." We same. Consequently, a majority of must cease to dabble in everything teams rely on one person for creative before we can become excellent at thought and end up starved with good anything”. ideas. 5) The Principle of Flexibility 3) The Principle of Influence In leadership, be mentally prepared When you prepare your plans, ask that not everything will go according to yourself the question, "Am I able to your plans. Then, when plans unfold influence the resources needed to fulfill unexpectedly, you'll be prepared to see my planning and mission?" To new opportunities. Some of the best accomplish your plan, you'll need things we received in life have been influence over people, finances, and surprises that we could never have you schedule. The support of people, planned in advance. When plans go especially other influencers, can make awry, don't just stand there. By staying or break your plan. Make a priority to in motion, you create movement. Be build relationships with them. In resourceful enough to improvise when particular, find the key to their lives by circumstances push you off course. learning what matters most to them. If 6) The Principle of Timing you continually add value to the Most of the time, our decisions are influencers around you in meaningful based on our emotional environment ways, then you'll be more likely to rather than reality. When we're in the receive their assistance when you need valleys of life, we don't see clearly. Our it. perspective is limited, and all we see 4) The Principle of Priorities are the problems around us. In the Giving importance to the things you valleys we make decisions, not to better have to do or deal with, or must be ourselves, but to escape our problems. done or dealt with before everything Never make a major decision in the else you have to do. You have no right, valleys. Wait until you get to the peak nor any reason, to start planning your where you can see clearer and farther. life until you know what you're living for By reserving big choices for the peaks, and what you're willing to die for. It's you'll avoid making rash decisions that important to find your purpose so that you’ll regret later. you run, not on the fast track, but on your track. The key to a prioritized life is 7) The Principle of Teamwork 4. Flexibility of planning cannot be A worthwhile plan ought to be bigger maintained when there are than your abilities. You shouldn't be unforeseen changes in the able to accomplish it alone. Each of us environment. - such as business has areas of weakness, blind spots, and recession, change in the government shortcomings. Unless we rely on a team policy, crop failure etc. When such to help us, our plans succumb to our events take place, the original plan personal limitations. A sign in Coach Bill loses its value and there is a need to Parcells' office stated his philosophy draw up a fresh plan. plainly, "Individuals play the game but 5. Another limiting factor in planning teams win championships." What we is the difficulty of formulating can do alone pales in comparison to the accurate premises. - Since these potential we have when we work premises are the background against together. which a set of plan is made, they Barreries or Limitations of Planning necessarily deal with the future. Since the future cannot be known with 1. Planning is an expensive and time accuracy, premising must be subject to consuming process. -It involves a margin of error. significant amount of money, energy 6. Planning may sometimes face and also risk, without any assurance of people’s resistance to it. - In old, the fulfillment of the organization’s established organizations, managers are objectives. often frustrated in instituting a new 2. Planning sometimes restricts the plan simply by the unwillingness or organization to the most rational inability of people to accept it. and risk free opportunities. - It curbs the initiative of the manager and forces him to operate within the limits set by it. 3. The scope of planning is said to be limited in the case of organizations with rapidly changing situations. - For example, it is claimed that for industries producing fashionable articles or for industries engage in the publication of textbooks, working on a day-today basis is more economical than plan basis. PLANNING CONCEPTS AND STRATEGIES • It not only selects the objectives but also develops policies, programs and Chapter Objectives procedures to achieve the objectives. • Define planning. • Planning is looking into the future • Why is there a need to plan in management? • Importance of planning. • Planning function. • Define objectives and its kinds. IMPORTANCE OF PLANNING • Differentiate between strategic and tactical It reduces uncertainty of future events planning (kinds of planning) It makes objectives clear and specific • Differentiate planning and strategic It brings economy in operations. management It provides the basis of control • Discuss the planning process It establishes unity and coordination • Discuss the planning hierarchy and roles for Optimum utilization of available managers resources It helps to control hasty decisions It is for the development of the PLANNING organization.
• Is the process of setting objectives to be
accomplished by an organization during a future time period and deciding on KINDS OF PLANNING the methods of reaching them. 1. Strategic planning • In planning, managers attempts to is the type of planning that is bridge the gap between where the generally reserved for top-level organization at the moment and where managers since it involves the he wants it to go. In advance, it answers determination of overall the WHO, WHAT, WHEN, WHY, and direction. – HOW of future actions. This concerns itself with issues • Planning is a never-ending activity. The such as the purpose of the manager must examine plans regularly organization, the major social, and if necessary modify them in view of political, and technological new situations and variables. influences which might seriously • It integrates various activities of affect its business. organization 2. Tactical Planning • It is an interdependent process which type of planning generally coordinates the various business reserved for the middle and lower activities. level managers. • It requires considerable time form This primarily concerned with implementation. how to get, where the organization wants to go. It is concern with determining OBJECTIVES the tasks to be done, establishing responsibilities and Are clear-cut and carefully considered accountabilities, setting statements designed to give an quantitative measures for each organization and its members direction tasks, implementing the planned and purpose. actions, and exercising controls. Goals, aims, purposes or missions are commonly used interchangeably with objectives.
KINDS OF OBJECTIVES
1. Organizational – deals with the
general direction and purposes of the organization 2. Managerial – subordinate but directly related to the organizational objectives which identify the goals of particular departments or organizational segment. 3. Individual – are personalized objectives which outline what individuals in the group are trying to PLANNING FUNCTION accomplish It consists of 3 major activites: 1. The manager must critically appraise - All these three kinds of objectives should the present position of his organization. blend together and not be conflict so that it will He must take a complete inventory and contribute to the organizational realization of attempt to realistically determine just its PLANS and for the future success. where his organization is at the moment. 2. The manager must set objectives. He must decide where his organization STRATEGIC PLANNING & STRATEGIC must go. MANAGEMENT 3. The manager must develop a set of plans to achieve these objectives. 1. STRATEGIC PLANNING is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended in an industry that allows for the outcomes/results, and assess and successful achievement of adjust the organization’s direction organizational goals. in response to a changing It includes understanding the environment. strategic position of an 2. STAREGIC PLAN organization, making strategic is a document used to choices for the future and communicate with the managing strategy in action, organization, the organizations goals, the actions needed to achieve those goals and all of the STEPS IN PLANNING other critical elements developed during the planning exercise. 1. Establish Goals 3. STRATEGIC MANAGEMENT Identify specific company goal can be defined as the art and Overview of each goal including science of formulating, the reasons for its selection And implementing, and evaluating the anticipated outcomes cross- functional decisions that 2. Identify Resources enable an organization to achieve Financial and human resources its objectives. projections Comprehensive collection of 3. Establish Goal-Related Tasks ongoing activities and processes Outlining tasks or activities that organizations use to 4. Prioritize Goals and Tasks systematically coordinate and Ordering objectives in terms of align resources, actions with their importance. missio,vision and strategy 5. Create Assignments and Timelines throughout the organization. consider the abilities of staff The strategic management members and the time activities transform the static plan realistically to complete into a system that provides assignments. trategic performance feedback to 6. Establish Evaluation Methods decision making and enables the through requesting a monthly plan to evolve and grow as progress report from department requirements and other heads. circumstances change 7. Identify Alternative Courses of The process by which managers of the firm analyze the internal Action and external environment for the A management plan should purpose of formulating strategies include a contingency plan if and allocating resources to certain aspects of the master plan develop a competitive advantage prove to be unattainable. MANAGEMENT LEVELS: A HIERARCHICAL VIEW
An organization can have many different
managers, across many different titles, authority levels, and levels of the management hierarchy. The three levels of management typically found in an organization are low-level management, middle-level management, and top-level management.
Top-level managers are responsible for
controlling and overseeing the entire organization.
Middle-level managers are responsible for
executing organizational plans which comply with the company's policies. These managers act at an intermediary between top-level management and low-level management.
Low-level managers focus on controlling
and directing. They serve as role models for the employees they supervise.