Planning
MRK 151
Chapter 2
Planning
Planning is deciding in advance what to do , how to do , when to do and who is to
do . Planning bridge the gap from where we are to where we want to go.
Characteristics of planning :
1- it is closely associated with the goals of the organization.
2- primarily concerned with the forecasting of future situation.
3- involves the selection of the best among several alternatives for achieving the
organization objectives.
4- comprehensive and is required in every course of action in the organization.
5- is flexible as it is based on future conditions which are always dynamic.
Nature of Planning
The essential nature of planning can be highlighted in terms of the following four
major aspects:
1- contribution to purpose and objectives.
2- primacy of planning.
3- pervasiveness of planning
4- efficiency of plans
Importance of Planning
1- to off-set uncertainty and change
2- to focus on objectives
3- to help in coordination
4- to gain economy in operation
5- to help in control
6-to increase organizational effectiveness.
Types of Plans
There are eight different types of plans , some of these are in the form of standing
plans while some others are single-use plans .
the basic difference between them is the standing plans are used over a long
period of time , while single-use plans are used for only specific periods.
the types are :
1- objectives
2- policies
3- strategies
Types of Plans
4-procedures:
A) policy and procedures
B) characteristics of a good procedure:
- based on facts
-procedure as a system
- well-balanced
-updating procedures
minimum procedures 5- rules
6- methods
7- projects
8-budgets
Steps in Planning
It is not possible to prescribe a certain fixed process of planning for all
organization or for all types of plans. The major steps of planning :
1- perception of opportunities
2- establishing objectives
3-establishing planning premises
4- determining alternative courses of action
5- evaluating alternative courses
6- selecting the best course
7-formulating derivative plans
Limitation of Planning
Limiting factors help in removing many difficulties in planning, these factors are
explained as follows:
1- lack of accurate information
2-problems of change
3-failure of people
4-internal inflexibilities
5-external inflexibilities
6-rigidity in planning
7-time and cost factors
Planning Premises
Planning premises constitute the framework within which planning is done.
1-Importance of forecast: forecasting offers the following advantages:
_it helps by providing scientific and reliable basis for anticipating future
operation.
_it aims at reducing the area of uncertainty the surround management decisionmaking.
_will compel the managers to think ahead and to search for the best decision.
_for managerial control will disclose the areas where control is lacking.
2- effective premising: will minimize the difficulty in identifying the factors in
future environment that will affect the manager's plans.
Planning Premises
3- forecasting methods:
_qualitative techniques ted to apply for the long term time to identifying the future
needs and select the best options open for the company.
_quantitative techniques tend to be used as a means of quantifying future demand.
Corporate Planning
It is a process of determining the major objective of an organization and the
policies and strategies that will govern the acquisition and of resources to achieve
those objectives.
Characteristics
1_corporate plan deals with formulation of objectives ,plans, policies and
strategies and making decisions.
2_it deals with the future impact of current decisions.
3_it involves opportunities and threats and matching them with strengths and
weaknesses of the organization.
4_provied integrated framework .
Corporate Planning Objectives
1- allocation of scarce resources like capital, materials and technology.
2- preparing the company to adapt the environment opportunities and threats.
3- coordinating strategic activities to reflect the internal strengths and weaknesses.
4-preparing the company for adaptation and integration to get in the most efficient
manner.
5-to learn from the outcomes of past strategic decision.
Importance of Corporate Planning
1- corporate planning encourages the habit of forward thinking on the part of
manager.
2-it helps in attaining overall coordination among the various levels of
management.
3-it creates a greater awareness of the business environment.
4- it enable the organization to anticipate technological changes.
5- it can lead to improvement in overall performance of the organization.
Process of Corporate Planning
1- scanning the environment.
2- making corporate appraisals.
3- determining of mission and objectives
4- making strategies.
5- development of action plans.
6- implementing the strategy.
How Strategic and Operational Plans Differ
1- time horizon: strategic plans consider several years or even decades, while
operational plans year is the relevant time period.
2-scope: strategic plans affect a wide range of organizational activities, while the
operational plans have a narrow and limited scope.
3-degree of detail: strategic plans are simplistic and generic , while operational
plans more in details.
Strategies at Different Levels
1- corporate strategy :
At the corporate level , strategic decisions relate to organization policies.
2- business level strategy :
To achieve the specific objectives of the strategic business unit to help achieve the
overall corporate objective.
3- functional level strategy:
The success of the SBU will depend, on other things, on the effectiveness with
which it is translated into functional areas like : marketing , finance, production.
Strategic Planning
Features of strategic planning:
1- strategic planning emphasizes the basic mission and goal of the organization.
2- determines the basic policy and programs.
3- the time frame is larger than other type of planning.
4- it provides for coherence in organization policy and decision on activity over
time.
5- it deals with uncertain environment .
6-It is comprehensive and is a unified plan.
Limitations of Strategic Planning
1-strategic planning require an investment in time , money and human resources.
2-small organization cannot afford the cost or the strategic planning.
3-strategic planning requires trained persons to make use of opportunities.
4- strategic planning restrict the organization for the risk-free options.
Vision, Mission and Purpose
The vision is the image of what a company wants to be or wants to be known for :
_Conceiving vision : the must effective vision should link the company's core
values to a perception of how you want your future to look like.
_Shared vision: must linking it to an entire strategic chain to make it useful for the
company, and become the starting point of the process in sitting objectives for
every division or business unit.
Vision, Mission and Purpose
why need a vision:
_Vision is adding to the activities of the people.
_vision is the hallmark of an enlightened forward-looking organization.
What can go wrong with vision:
_ the company's vision can become the extension of CEO,s ego
_ some companies overcommitted themselves to their vision, ignoring the changes
around them.