7. Planning

The purpose: Consider the main aspects planning process, types of planning and what does mean group planning

Key words: planning, sectional planning, contribution (cooperation), consistent premising, commitment, coordinated planning

Questions:

7.1 Definition. Process of planning

7.2 Principles and types of planning

7.3 Group or sectional planning

7.1 Definition. Process of planning

Planning is deciding in advance what to do, how to do it, when to do it and who to do it. It involves anticipating the future and conciously

Choosing the future course of action.

“According to Haimann, Planning is the function that determines in advance what should be done.”

Nature of Planning

• Planning is goal-oriented

• Planning is a primary function

• Planning is all-pervasive

• Planning is a continuous process

• Planning is forward-looking

• Planning involves choice

• Planning is directed toword efficiency

PROCESS OF PLANNING

The main step in planning proccess are as follow:-

Step 1- DEFINE THE TASK-

Step 2- IDENTIFY RESOURCES-

Step 3- CONSIDER ALTERNATIVE-

step 4- CREATE THE PLANNING-

Step 5- WORK THE PLAN-

Step 6- EVALUATE-

Importance of planning

• Focuses attention on objectives and result

• Reduces uncertainty and risk

• Provides sense of direction

• Encourages innovation and creativity

• Helps in co-ordination

• Guides decision-making

• Provide efficiency in operation

Limitation of planning

• Lack of accurate information

• Time and cost

• Resistance to change

• Lock of ability to plans

• False sense of security

• Environmental constraints

7.2 Principles and types of planning

1. Principle of Contribution (cooperation): The purpose of planning is to ensure the effective and efficient achievement of corporate objectives, in-fact, the basic criteria for the formulation of plans are to achieve the ultimate Objectives of the company. The accomplishment of the objectives always depends on the soundness of plans and the adequate amount of contribution of company towards the same.

2. Principle of Sound and Consistent Premising: Premises are the assumptions regarding the environmental forces like economic and market conditions, social, political, legal and cultural aspects, competitors actions, etc. These are prevalent during the period of the implementation of plans. Hence, Plans are made on the basis of premises accordingly, and the future of the company depends on the soundness of plans they make so as to face the state of premises.

3. Principle of Limiting factors: The limiting factors are the lack of motivated employees, shortage of trained personnel, shortage of capital funds, government policy of price regulation, etc. The company requires monitoring all these factors and needing to tackle the same in an efficient way so as to make a smooth way for the achievement of its ultimate objectives.

4. Principle of Commitment (obligation) : A commitment is required to carry-on the business that is established. The planning shall has to be in such a way that the product diversification should encompass the particular period during which entire investment on that product is recovered.

5. Principle of Coordinated Planning: Long and short-range plans should be coordinated with one another to form an integrated plan, this is possible only when latter are derived from the former. Implementation of the long-range plan is regarded as contributing to the implementation of the short-range plan. Functional plans of the company too should contribute to all others plans i.e. implementation of one plan should contribute to all the other plans, this is possible only when all plans are consistent with one another and are viewed as parts of an integrated corporate plan.

6. Principle of Timing: Number of major and minor plans of the organization should be arranged in a systematic manner. The plans should be arranged in a time hierarchy, initiation and completion of those plans should be clearly determined.

7. Principle of Efficiency: Cost of planning constitutes human, physical and financial resources for their formulation and implementation as well. Minimizing the cost and achieving the efficient utilization of resources shall have to be the aim of the plans. Cost of plan formulation and implementation, in any case, should not exceed the organizations output's monetary value. Employee satisfaction and development, and social standing of the organization are supposed to be considered while calculating the cost and benefits of plan.

8. Principle of Flexibility: Plans are supposed to be flexible to favour the organisation to cope-up with the unexpected environments. It is always required to keep in mind that future will be different in actuality. Hence companies, therefore, require preparing contingency plans which may be put into operation in response to the situations.

9. Principle of Navigational Change: Since the environment is always not the same as predicted, plans should be reviewed periodically. This may require changes in strategies, objectives, policies and programmes of the organization. The management should take all the necessary steps while reviewing the plans so that they efficiently achieve the ultimate goals of the organization.

10. Principle of Acceptance: Plans should be understood and accepted by the employees, since the successful implementation of plans requires the willingness and cooperative efforts from them. Communication also plays a crucial role in gaining the employee understanding and acceptance of the plans by removing their doubts and misunderstanding about the plans also their apprehensions and anxieties about consequences of plans for achievement of their personal goal.

Types of planning

Types of plan in business

1. Operational planning

2. Business planning – the actions that a business to complete

3. Strategic planning

1.What is OPERATIONAL planning?

>short-range planning that deals with day-to-day maintenance activities

>performed at a unit or departmental level

>done as part of the overall strategic planning

STEPS IN OPERATIONAL PLANNING

1. Set your objectives

2. Set your priorities

3. State your assumptions

4. Review any and all limitations

5. Develop your primary and back-up plans

6. Implement the plan

7. Set up a control system and follow up on progress and results

STRATEGIC planning.

A strategic plan is a high-level overview of the entire business, its vision, mission, objectives, and value. (about 5-10 years)

Tactical planning describes the tactics the organization plans to use to achieve the ambitions outlined in the strategic plan. It is a short range (i.e. with a scope of less than one year), low-level document that breaks down the broader mission statements into smaller, actionable chunks. If the strategic plan is a response to “What?” the tactical plan responds to “How?”.

Operational panning describes the day to day running of the company. The operational plan charts out a roadmap to achieve the tactical goals within a realistic timeframe. This plan is highly specific with an emphasis on short-term objectives. “Increase sales to 150 units/day”, or “hire 50 new employees” are both examples of operational plan objectives.

STEPS IN STRATEGIC PLANNING

1. Analyze the organization’s internal and external environment (SWOT analysis)

2. Conduct a stakeholder assessment

3. Define the purpose of the organization

4. Clarify values important to the organization

5. Set the goals and objectives

6. Communicate the goals and objectives to the constituents

7. Identify strategies – set time lines and tasks

8. Estimate and allocate resources

9. Develop and communicate a marketing or business plan

10. Establish a system for the implementation and monitoring of policies, procedures, and rules

11. Establish a system for exchanging information and building consensus

11. Provide a mechanism for evaluation

Where are we now?

• The purpose of the situational analysis is to determine which opportunities to pursue

• PEST/PESTEL analysis – identify and analyze trends in environment

• Competitor analysis – understand and, if possible, predict behavior of competitors

• Audit of internal resources

• SWOT analysis – build on strength, resolve weaknesses, exploit opportunities, confront threats

Situational analysis

• Analyzing the present situation is the prelude to devising objectives and strategies for the future

• We need to understand where we are and where we have come from before planning the future

• But we must be always careful to avoid paralysis by analysis

• This describes a situation in which no decisions are made because of the disproportionate amount effort that goes into the analysis phase