Planning
Definition
Planning is the process of setting goals, developing strategies, outlining tasks and
schedules to accomplish the goals, and setting standards for performance evaluation.
Based on the definition, planning primarily involves three steps:
1. Setting goals
The primary purpose of this step is to provide every person in the
organization with a sense of direction as to what the organization wants to achieve.
2. Developing strategies
3. Creating detailed tasks to accomplish goals and determining resources needed
4. Setting performance standards
Levels of Planning
The planning stage is further subdivided into three levels namely strategic planning,
intermediate planning, and operational planning.
Strategic Planning
This level of planning falls to top management. This refers to the process of
determining the ultimate purpose of the organization. Steps in strategic planning involve:
1. Setting the organizations vision, mission, and objectives.
2. Setting long range or long term objectives or goals.
3. Determining the major policies and strategies needed to obtain these goals.
4. Setting standards to evaluate the organization’s performance.
Strategic plans are composed of the corporate or company mission, the corporate
objectives and goals, and the corporate strategy.
Intermediate Planning
This level of management falls to middle management. This refers to the process of
developing detailed tasks that will support the major strategies of the organization.
Intermediate planning may be omitted for small and/or micro-businesses since it is only
applicable to companies that have multiple departments and/or operations. Steps in
intermediate planning involve:
1. Setting departmental vision, mission, and objectives that support the organization’s
VMO.
2. Setting departmental policies and processes needed to achieve these goals.
3. Determining the resources needed to accomplish goals.
4. Setting standards to evaluate departmental performance.
Operational Planning
This level of planning falls to lower management. This refers to the process of
developing specific goals for short-term durations. These plans focus on day to day
activities and processes. Steps involved in this level of planning involve:
1. Determining specific goals.
2. Determining specific policies and tactics.
3. Setting performance standards.
Goal Setting
It is evident that goal setting is the initial step in any level of planning, whether it is a
strategic, intermediate, or operational planning. The reason is that goals or objectives will
determine the direction of plans. Planning would be useless if there is no goal to be
achieved. In simple terms, goal setting is simply the process or step of determining what
a company, a department or a unit wants to achieve.
Strategies vs. Tactics
Strategies
Strategies are broad or general course of actions of plans that are created or
developed to make sure that the VMO of a firm will be attained. These are created for long
term purposes.
Tactics
Tactics are detailed plans that are implemented in order to support the strategies of
a firm. These may be referred as the short term or immediate actions being implemented
in order to assure the smooth flow of the company’s strategies.
Resource Determination
In order for a plan to be effective, resource determination is critical. In this step, the
planning personnel are tasked to know the human and non-human resources needed,
including the quantity and quality of such resources. Failure to properly determine these
resources will result to wastage, loss of opportunities, or worse, the failure of the
company as a whole.
Standard Setting
The final step in planning is the setting of standards. The purpose of such is for the
business or the company to have a basis as to whether the plan was properly
implemented. These standards will be the qualitative and quantitative criteria that will be
used to measure or evaluate the performance of the different aspects of the business such
as employees, processes, and resource utilization.
Types of Plans
Plans may be classified by functional area, time horizon, and frequency of use.
Functional Area Plans
 Marketing Plans
- These are plans that relate to the proper implementation and control of
the marketing strategies, policies, and tactics of the company.
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Production Plans
- These are plans that provide the goals and guidelines as to the quantity
and quality of the company’s product outputs, which could either be
goods of services.
Financial Plans
- These provide the summary of the current and projected financial
situation of the company, which are used to help the company in adopting
financial activities that will maximize its financial resources.
Human Resource Management Plan
- These provide the company with the human resource of personnel needs
of the company which also provides the details as to the quantity and
quality of personnel needed.
Plans as to Time Horizon
 Short-range Plans
- These are plans that cover a period of less than one year. These are
usually the concern of lower management.
 Mid-range Plans
- These are plans that cover a period of 1-5 years. A mid-range plan is
usually being done by the middle management.
 Long-range Plans
- These plans cover a period of more than 5 years. These plans are the
responsibility of top management.
Plans as to Frequency of Use
 Standing Plans
- These are plans that are implemented on a recurring basis. These are
plans that are applied over and over again in the business to address to
the concerns in operations. Examples are policies, procedures, and rules.
 Single Use Plans
- These are plans that are likely to be used on a one-time basis only. In
other words, these are plans that would be significant to a single or to a
unique activity and would be discarded at the end of the said activity.
Examples of these plans are budgets, programs, and projects.
Contents of a Marketing Plan
 The executive summary
 Table of contents
 Situational analysis and target market
 Marketing objectives and goals
 Marketing strategies
 Marketing tactics
 Schedule and budgets
 Financial data and control
Contents of a Production Plan
 The production capacity
 The number of employees required
 The quantity of materials to be purchased
Contents of a Financial Plan
 Sales forecast
 Capital budget
 Cash budget
 Projected financial statements
 External financing plan
Contents of a Human Resource Plan
 Personnel requirements
 Recruitment and selection plan
 Training plan
 Retirement plan
Effective Planning
Plans are developed in order to attain a particular goal. Therefore, it is important to
carefully process each plan since its failure could result to the failure to attain the goal. In
order to successfully develop a plan, it is advisable to:
 Recognize the planning barriers
 Use planning aids
Planning Barriers
These are factors that affect the successful planning. Examples are:
 The manger’s inability to plan
 Improper planning process
 Lack of commitment to the planning process
 Improper information
 Focusing on the present at the expense of the future
 Too much reliance on the planning department
 Concentrating only on the controllable variance
Planning Aids
These are possible guides that will help in effective planning. Examples are:
 Gathering as much information as possible
 Developing multiple sources of information
 Involving others in the planning process