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CHAPTER 4 PLANNING FUNCTION 4.0 INFRODUCTION Managerial functions are the general admit virtually all productive organizations. They include: a Planning a4 Organizing 4 Directing 4 Controlling 4 Staffing In this chapter we focus on planning. sistrative duties that are performed by managers in 1) The Planning Function an FP Definition of planning Planning involves determining ahead of time what is going to be done, how, when, by, who, y where and why. It involves deciding in the present what is going to be done in the future, 11 a systematic thought that precedes action. Planning involves setting objective: formulating causes of actions to achieve the set objective. The critical activities in planning include: = Objective setting » Environmental analysis «Forecasting = Decision making 4.1 Characteristics of planning i) Planning is goal oriented. The basic purpose of p objectives. : ii) Planning forward looking. Planning involves the future. A iii) Planning involves making of cho iv) Planning is an intellectual proc v) Planning is a continuous. planning period wh Further existing p environment shift, Scanned with CamScanner cap inpaseath tld td vi) Planning is an integrative process that tries to synlitonies the different p organization, goals, the past the present and the future. a vii) Planning is pervasive. Planning is undertaken at all levels of the pe: Ions be viii) Planning is directed towards efficiency. Planning has no value if it doesn’t fa attainment of the set goals in the most economical way. ix) Planning precedes the execution of all the other managerial functions, . 4.2 Importance of planning to an organization i) Planning provides direction to the org: ii) Tt reduces uncertainty and tisks, iii) It guides decision making, iv) It facilitates control of activities, v) Tt enhances efficiency of operations vi) It facilitates evaluation of perform vii) It facilitates coordination viii) It facilitates optimal alloca ix) It precedes the execution of all the other Managerial functions, x) It focuses attention on objectives hence all the organizational eff 4 ef directed towards atlainment of organizational Boals _— TMETS Forckron ol ; anizational members, ance tion of resources, Reasons for planning Douglas B. Gehram provided the following 1) Planning increases the chances of Success by fooys = It forces analytical thinking, ¥ focusing on results It establishes a frame: work for decisio Planning orients People towards 5) Planning Modifies the man. management. Planning avoids crisis answers to the Gestion “why n making, action instead Of reacti agement style fron day to day management, : r and provides sion n 7) Planning provides a basis formeasuring perfor ecision 8) Planning increases employee involvement and j Scanned with CamScanner fission statement: The mission statement is an all-embri of the purpose and goal of the organization. It is the rationale f legitimizes its existence in the society, Vision statement: This is the roadmap to the company’s destination an he ‘the company wants to be 5 to 10 years from now. 3. Values statement or guiding principles: These statements are endur distinctive core beliefs. ‘They’re guiding principles that never change anc strategic foundation. swot: A SWOT is a summarized view of your current position, company’s strengths, weaknesses, opportunities, and threats. 5. Competitive advantage: This includes what the firm outshines the competiti 6. Long-term strategic objectives: These are the long-term strategic focus: for three-year (or more) time horizon. They answer the question of what you n 4 on to achieve your vision. _ 7. Strategies: Strategies are the approaches or methods that will be employed to us the vision. & Short-term goals/priorities/initiatives: the short-term goals and initiatives conve strategic goals into specific performance targets that fall within the one- to two-} ~ horizon, 9. Action items/plans: These specific statements that explain how a . goal accomplished. They’re the areas that move the strategy to operations and al executed by teams or individuals within one to two years. 10. Scorecard: This is a tally that will be used to report the data o ____ performance indicators (KPIs) and track your performance against the m« pt. hips lan assessment: Based on historical record and future project perc Scanned with CamScanner Table 4.1: Characteristics of Plans ASPECT. STRATEGIC PLANS TACTICAL PLANS Planner ‘Top level managers ‘Tactical managers Scope Broad scope covering the entire | Moderate scope covering | Narrow scope organization as a single business | a specific functional area, | specific activity — portfolio department, branch or a uy ~ strategic business unit : Time frame | ‘The plan focuses on the long-term | Moderate time-frame, | Short-term plans direction of the firm five to 10 years covering 2-5 years 0-12 months As £nyironment | Focuses of the external environment Moderate focus on the f Internal envii : external environment and a, internal environment : Complexity | It is a complex of many plans covering | Relatively simple Simple plans the whole organization. The plan é \ \ incorporates uncertainty due to its diversity, time frame and the fact that it aligns the organization to the external < environment of which the management : as no control over Resources The plans focus on the corporate | The plans focus on how] The — plans resources will be obtained and how they f the already allocated | accomplishing will be allocated between the different | resources will be utilized | within budget parts of the organization Values The plans are shaped by the values of | Derived from the | Must be within the p those in power as they make | strategic plan and [ framework — unstructured decisions therefore cannot be 4 shaped by the value of the is. decision maker Orientation Focus on effectiveness as opposed to | Focus moderately on efficiency effectiveness and moderately on efficiency 2. Tactical plans managers. These plans have moderate scope and moderate time frame. ‘They are plans relating : of the organization which could be a department, branch or a Strategic Busin ‘These plans are derived from the strategic plans and they are formulated by ti 3. Operational plans These plans have the narrowest focus and the shortest lime frame, specific activities. They are divided into two: Standing plans and single use plans. Scanned with CamScanner esses if : ic organization. and external environm ming PPO no 4.5 The ph sil ry bi Jdentificatio the mission and vision of tI yze the internal 4 favironmental scanning > ana iii jective setting. 4 iti) seine = the planning premises ~ assumptions made in planning iv) ay alternative strategies 10 achieve the set objectives. = e, ryaluale the alternative stralegics and select the most suitable option. vi Value : 5 : vil) Formulate derivative and contingent plans. iii ap co-operation. viii) Securine co-opera ; ix) : Formulate programs for implementation. | 4.6 Goals setting bod Whatisa goal? A goal ad statement of what the organization hopes to achieve at a sl nds towards which the organization effort is directed to achi ative goals are known as hile the non-quantit specific and uanti are known as‘ bjectives wh | while objectives are Goals are broad and general Classifiention of goals = nat relate to the company asa 1) Corporate goals: These are goals th as whole hopes to achieve. 2) Operational goals; Thes als relating (0 4 specific fi marketing. : 3) Long term and short-term goals: Long term goals focus on to short tern goals focus on the immediate fulure that is, next 4) Economie and non-economic goals — Economic goals economic relates to any other goal that increase cost and ee Scanned with CamScanner Scanned with CamScanner 
