PLANNING

NATURE OF PLANNING

PLAN
• Provides a methodical way of achieving
desired results.
• It serves as a useful guide for the management.
 NATURE OF PLANNING

“PLANNING is the management function function that

involves anticipating future trends and determining best
strategies and tactics to achieve an organizational goal.”

- Nickels and others

 NATURE OF PLANNING

“PLANNING is deciding what will be done, who will do it,

where, when and how will it be done, and the standards to
which it will be done.”

- Kris Cole and Barbara Hamilton

PLANNING AT VARIOUS MANAGEMENT LEVELS

MIDDLE LOWER
TOP MANAGEMENT
MANAGEMENT MANAGEMENT

Strategic
Intermediate planning Operational planning
planning

Major goals, policies and Contributions that subunits How specific tasks can best
strategies for obtaining can make with allocated be accomplished on time
resources resources with available resources
 THE PLANNING PROCESS

Setting Developing
organizationa strategies or Determining Setting
l, divisional, or tactics to resources standards
unit goals reach goals

Figure 2: Planning
 THE PLANNING PROCESS
1. Setting of organizational, divisional, and unit goals

Organizational Level Goal

Company To attain a return on investment of 25%

To increase the number of projects

Division
undertaken by the company

To increase the number of project

Unit
engineers
Figure 3: Example of goals by organizational level
 THE PLANNING PROCESS
2. Developing strategies or tactics to reach goals

• devise some means to realize them

• STRATEGY – may be defined as course of action aimed

at ensuring that organization will achieve its objective

• TACTIC – short term action taken to adjust negative

internal or external influences (support to strategies)
 THE PLANNING PROCESS
3. Determining resources needed

• Human and non-human resources required by such

strategies or tactics

• Quality and quantity must be correctly determined

 THE PLANNING PROCESS
4. Setting Standards

• Standard measuring performance may be set

• Actual per for mance does not match planned

performance, adjust or corrections must be made

• STANDARD – quantitative or qualitative measuring

device designed to help monitor the performance of
people, capital goods, or processes.
 TYPES OF PLAN

1 Functional Area Plans

2 Plans with time Horizons

3 Plans according to frequency

 FUNCTIONAL AREA PLAN
MARKETING States the organizational marketing activities

States the quantity of output a company must produce

PRODUCTION in broad terms and by product family

Summarizes current financial situation, analyze financial

FINANCIAL needs, direction for financial activities

HUMAN RESOURCE Indicates human resource needs detailed in terms of

MANAGEMENT quantity and quality based on strategic plan
 PLANS WITH TIME HORIZONS

SHORT-RANGE PLANS
• Covers a period of less than a year

LONG-RANGE PLANS
• Covers a period of more than 1 year
 PLANS ACCORDING TO FREQUENCY OF USE

STANDING PLANS
• Policies
• Procedures
• Rules

SINGLE-USE PLANS
• Budgets
• Programs
• Projects