PLANNING
-is the process of setting goals and defining the actions required to achieve the goals.
Planning begins with goals. Goals are derived from the vision and mission statements, but
these statements describe what the organization wants to achieve, not necessarily what it can
achieve. The organization is affected both by conditions in its external environment—
competitors, laws, availability of resources, etc.—and its internal conditions—the skills and
experience of its workforce, its equipment and resources, and the abilities of its management.
Together, the vision and mission statements and the results of the situation analysis determine
the goals of the organization.
BENEFITS OF PLANNING
Planning provides a guide for action. Plans can direct everyone’s actions toward desired
outcomes. When actions are coordinated and focused on specific outcomes they are much more
effective.
Planning improves resource utilization. Resources are always scarce in organizations, and
managers need to make sure the resources they have are used effectively. Planning helps
managers determine where resources are most needed so they can be allocated where they will
provide the most benefit.
Plans provide motivation and commitment. People are not motivated when they do not have
clear goals and do not know what is expected of them. Planning reduces uncertainty and
indicates what everyone is expected to accomplish. People are more likely to work toward a goal
they know and understand.
Plans set performance standards. Planning defines desired outcomes as well as mileposts to
define progress. These provide a standard for assessing when things are progressing and when
they need correction.
Planning allows flexibility. Through the goal-setting process, managers identify key resources in
the organization as well as critical factors outside the organization that need to be monitored.
When changes occur, managers are more likely to detect them and know how to deploy
resources to respond.
KINDS OF CORPORATE PLANS
Initiation Plans - These are also known as "Start-up Plans" and are drawn by the entrepreneur
whenever he is about to venture into the business. He makes a synopsis of what he intends to do,
what are his goals and aspirations for the company.
This plan helps him evaluate the viability of the intended business. Once he decides to go
ahead with the business, he details out what the products he would manufacture, his finances and
his team of employees. He details his intended sales and profit projections for the next year.
Strategic Plans - These plans help the company apportion their resources most optimally. The
plans evaluate the pros and cons of choosing one method of allocation over another. The
company sets attainable goals and targets for itself. Later, its performance is gauged on the basis
of these targets
Growth Plans - These plans are made whenever the organization has an idea of diversifying into
newer territories of trade. These plans help the organization evaluate its strategies, finances and
resources and targets before the start of the new venture.
Financial Plans - These plans are made to analyze how best the organization must utilize its
money. These plans help the organization decide on whether they must procure loans from the
market or issue additional equity to raise money. Also, the company is able to evaluate what all
investments it must make today for maximum profitability.
Human Resource Plans - These plans help the company allocate its manpower in the most ideal
manner. The company contrasts the skills required for the job and the proficiencies of its
employees. It is then able to distribute the manpower most perfectly.
Internal Plans - These plans are specific to each department in the organization. These are also
called departmental plans. The departmental sets targets and timelines for each of her
subordinates.
TIME FRAMES FOR PLANNING

Long Range Plans - Long-term plans usually take years to attain and sometimes even
decades. However, it is up to each organization to decide the time span for their longrange goals. Managers must be very careful when planning long-range goals and take
future environmental change into consideration. This is crucial in order to keep managers
from planning too far ahead.

Intermediate Plans - These plans usually cover a time span of one to five years and are
less tentative and subject to change than long-range plans. They are set for middle and
first line managers and they typically parallel tactical plans. Intermediate plans have
become the central focus for planning activities of many organizations.

Short-range plans - These plans have a time frame of one year or less. Therefore, they
are of great importance in a managers day-today activities. Short-range plans have two
components: action plans and reaction plans. Action plans are used to operational any
other kind of plan. They coordinate the actual changes in organizations. Reaction plans in
the other hand are developed to react to unforeseen circumstances. Any situation in which
a manager is forced to react to an unforeseen environmental change would be considered
a reaction plan.
PERSON'S RESPONSIBLE FOR PLANNING
CEO and Executive Team
The CEO and executive team play a big role in setting the foundation of a strategic plan by
creating guiding organizational principles, articulating the strategic areas of focus, and creating
the long-term goals that guide the organization to create aligned goals and actions to achieve its
vision of success. The executive team is responsible for:
 Mission, Vision, & Guiding Principles – These are the core foundational elements to
your plan that tell your organization who you are, where you’re going, and how you’re
going to operate. These principles encompass your organization’s ethos and help serve as
the foundation to your long-term strategy to achieve your vision of success. These are
updated every 5 years and reviewed by the executive team annually.
 Strategic Priorities – These are the long-term areas of strategic focus that are designed to
achieve your vision of long-term success. These create the different pillars of your plan
and articulate the focus for each area. These are updated every 5 years and reviewed by
the executive team annually.
 Organization-Wide Goals and Performance Indicators – These are the long-term goals
and performance indicators that begin to put action to paper to help achieve strategic
priorities. These goals and actions have a lifespan of 3-5 years, but are reviewed and
adapted annually.
Managers/Department Leaders
Managers and department leaders don’t have as much responsibility during the plan creation
process, but drive your organization to create the annual department goals that support the
organization’s goals and performance indicators. Managers and department leaders are
responsible for:
 Annual Goals – Department leaders and managers create and execute the annual
department goals that align and support the organization-wide goals and performance
indicators. These goals are established annually.
Individual Contributors
Individual contributors are your soldiers on the ground tasked with helping drive your strategy
from the ground up. They play an essential role in your day-to-day operations, but also in the
creation and execution of your strategy. Individual contributors are responsible for:
 Supporting Action Items with Milestones – Individual contributors create the supporting
action plans with milestones that drive the day-to-day focus on strategy. Each of these
action plan milestones tally up to achieve your annual goals. These action plans are
completed annually.
PLANNING TOOLS
Strategists have developed a large array of tools useful in the assessment of strategic
planning, all of which provide unique insights into the feasibility and profitability of a given
operational project. Identifying these tools, and selecting which are most appropriate for
determining the effectiveness or efficiency of a project, is a central responsibility of a strategicmanagement team. Forecasting is the the most common strategic tool and it should be considered
whenever projects are being designed.
What is Forecasting?
Forecasting refers to the practice of predicting what will happen in the future by taking into
consideration events in the past and present. Basically, it is a decision-making tool that helps
businesses cope with the impact of the future’s uncertainty by examining historical data and
trends. It is a planning tool that enables businesses to chart their next moves and create budgets
that will hopefully cover whatever uncertainties may occur.
Forecasting Methods
Businesses choose between two basic methods when they want to predict what can possibly
happen in the future, namely, qualitative and quantitative methods.
1. Qualitative Method
Otherwise known as the judgmental method, qualitative forecasting offers subjective results,
as it is comprised of personal judgments by experts or forecasters. Forecasts are often biased
because they are based on the expert’s knowledge, intuition, and experience, and rarely on data,
making the process non-mathematical.
One example is when a person forecasts the outcome of a finals game in the NBA, which,
of course, is based more on personal motivation and interest. The weakness of such a method is
that it can be inaccurate.
2. Quantitative method
The quantitative method of forecasting is a mathematical process, making it consistent and
objective. It steers away from basing the results on opinion and intuition, instead utilizing large
amounts of data and figures that are interpreted.
Features of Forecasting
Here are some of the features of making a forecast:
1. Involves future events - Forecasts are created to predict the future, making them important
for planning.
2. Based on past and present events - Forecasts are based on opinions, intuition, guesses, as
well as on facts, figures, and other relevant data. All of the factors that go into creating a forecast
reflect to some extent what happened with the business in the past and what is considered likely
to occur in the future.
3. Uses forecasting techniques - Most businesses use the quantitative method, particularly in
planning and budgeting.
The Process of Forecasting
Forecasters need to follow a careful process in order to yield accurate results. Here are some
steps in the process:
1. Develop the basis of forecasting
The first step in the process is developing the basis of the investigation of the company’s
condition and identifying where the business is currently positioned in the market.
2. Estimate the future operations of the business
Based on the investigation conducted during the first step, the second part of forecasting
involves estimating the future conditions of the industry where the business operates and
projecting and analyzing how the company will fare.
3. Regulate the forecast
This involves looking at different forecasts in the past and comparing them with the actual
things that happened with the business. The differences in previous results and current forecasts
are analyzed, and the reasons for the deviations are considered.
4. Review the process
Every step is checked, and refinements and modifications are made.
Sources of Data for Forecasting
1. Primary sources
Information from primary sources takes time to gather because it is first-hand information,
also considered the most reliable and trustworthy sort of information. The forecaster himself
does the collection, and may do so through things such as interviews, questionnaires, and focus
groups.
2. Secondary sources
Secondary sources supply information that has been collected and published by other
entities. An example of this type of information might be industry reports. As this information
has already been compiled and analyzed, it makes the process quicker.
STRENGTH AND WEAKNESSES OF PLANNING TOOL
CHALLENGES IN THE PLANNING PROCESS
A.) Lack of Leadership
Being a leader is about more than a title following your name. It requires developing a
strategy and then expressing the vision in a clear way, so the entire team understands the goal.
When a vision is clearly laid out, business leaders must inspire team members to join the
program for the new vision and implement new strategies.
when leaders do all this well, they still need to be constant motivators, project managers
and evaluators of the strategy's implementation. Without motivation, new strategies fall behind
as workers return to their habitual ways of doing things.
B.) Excessive Distractions Prevent Effective Planning
Too many distractions present a significant barrier to effective planning. It could be that a
leader is trying to implement too many things at once, and the team is confused about the
priorities. Another way that a distraction prevents effective planning implementation occurs
when a leader attempts to roll out a new program during a peak business season.
Your team can't focus on new strategies and processes if they are working overtime taking
care of clients. As the leader, understand that timing the implementation of new strategy
carefully is as important as the strategy itself.
C.) Lack of Systems
Having the right systems in place to support a new strategy is important for success.
Systems could include hardware or software systems or could be something as simple as the
fulfillment process chain of events. Leaders need to look at the resources in place before
implementing a new strategy. For example, a new customer-retention management program
might help the team become more efficient from the sale through the delivery of goods.
However, if the computer systems haven't been upgraded, the new program could overload
the computers and cause crashes and freezes. Team members can't be productive while using a
system that isn't working correctly.
D.) Limited Manpower to Complete Tasks
Some strategies require a bigger labor force. Without it, seeing a new strategy implemented
effectively has potential problems. For example, a new lead-generation plan could do a great job
of flooding your sales team with leads. However, if the sales team doesn't have the capacity to
follow up with all the leads, the strategy wastes money and burns prospects.
Additionally, the new influx of orders needs a fulfillment team capable of handling the new
orders. Make sure you have the right people in place to execute new strategies effectively.
E.) Inadequate Resources and Funding
You may have a great plan but don't have the resources to execute it properly. A lack of
resources can impact marketing, talent acquisition and new distribution programs. Bootstrapping
new changes can strain the team as it implements something that isn't ready to go. When you
don't have the funding, segment the strategy and roll it out in phases that meet budget limitations.
F.) Impractical Business Planning
Some ideas are just not practical. Don't be stubborn about the execution of a new strategy.
A strategy is a concept that is fleshed out during implementation. Business leaders must be
flexible to see what is working and what isn't working in the strategy and make adjustments
accordingly.
Just because something seems like a good idea on paper doesn't mean it will translate into
practice without any glitches.
References:
https://bizfluent.com/info-7736288-types-corporate-planning.html
https://sites.google.com/site/bus25001planning/home/time-frames-forplanning?fbclid=IwAR3T1FhYe1UJq7WZ9aB3u51cef7dSra60lubvwvqr2_KIsG07RK3Ak8qc4
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https://corporatefinanceinstitute.com/resources/knowledge/finance/forecasting/?fbclid=IwAR3y
Z3Sv-g5A8A7XO9l3gNrj0BTJl7HdcMqWo6vBtuFcXYIs2G-687nRAss
https://smallbusiness.chron.com/six-barriers-effective-planning-45281.html
https://onstrategyhq.com/resources/whos-responsible-for-what-how-to-structure-your-strategicplan/
https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/reading-pros-and-consofplanning/?fbclid=IwAR0RztCqB8dHixui1VQHCnh7GzquVQs8iMsldX3kxenO49FXWoIUThM
2EZM