Brief introduction to planning processes & its function in management

1. Lecture Objectives
∗ To appreciate the concept of planning
∗ To learn about the importance of planning
∗ To discover the tools of planning
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6.0 Planning Function of Management

2. Planning is the process of deciding or designing a course of action of how an
organization can be managed in order to achieve its goals
• Managers think through their plans, outlining what an organization must
do to be successful
• Plans can differ in focus but they are all concerned with achieving
organizational performance both in short and long run
• Planning involves the commitment of an organization’s resources to
future course of action
• Planning includes all activities that lead to the definition of objectives and
the determination of appropriate strategies to achieve these objectives
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Defining Planning

3. ∗ A process of accomplishing purposes
∗ It is the blue print of business growth and a road map of
development
∗ It helps deciding objectives both in quantitative and
qualitative terms
∗ It is the setting of goals on the basis of objectives and
aligning with resources required
∗ It bridges the gap between where we are and where we
want to go
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Planning is ….

4. ∗ A plan should be a realistic view of the expectations
∗ Depending upon the activities, a plan can be long range,
intermediate or short range
∗ Should aim at achieving goals more economically and
accurately
∗ Key support document when seeking external support
∗ Support organization to survive, operate and grow in the
competitive market economies
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Expectations of Planning

5. 1. Helps management to clarify, focus and research their
business or projects development and prospects
2. Provides a considered and logical framework within which
a business can develop and pursue business strategies
3. Offers a bench mark against which actual performance can
be measured and reviewed
4. Keep organization in a changing, market economy and in
situation of uncertainty
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Purpose of Planning

6. Managers plan for various reasons. The common ones being:
1. Human Resources
2. Financial Resources
3. Technical Resources
Plans are necessary to set organization’s objectives- a best way
of reaching them
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Areas of Planning

7. Plans permit an organization to:
∗ Obtain resources required for its objectives
∗ Carry on activities that are consistent with its objectives and
procedures
∗ Monitor and measure progress towards its objectives
∗ Take necessary corrective actions where possible when actual
performance does not go according to plan
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The Need for Planning

8. 1. Establish a goal and set it with appropriate objective in place
2. Define the present situation – forecast on how events within
and outside the organization affect each alternative
3. Identify the strengths and weaknesses including barriers of
the goal set- analyze environmental factors
4. Develop the set objectives for reaching them
5. Evaluate these objectives and select the best among them
6. Select the strategies
7. Develop the budget
8. Set policies
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Elements of the Planning Process

9. Planning is goal setting but in controlling, goal setting becomes
“standard used” or a correction in controlling results and in
modifying of objectives used in planning
Planning…………Actions Executed………Results
Controlling………Measuring Performance
Dept/Division…….Revised Plans………….Correct Plans
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Linkages Between Planning and
Controlling

10. 1. Planning leads to controlling
2. Controlling leads to measuring performance
3. Measuring performance leads to comparing performance with
standards
4. Comparing performance with standards determines the
correctness of a planning process
5. Determination of what is correct leads to revising of plans
6. Revising of plans involves the division or departmentalization
of organizations
7. From divisions or departments a feedback of information
determines the course, direction and purpose of planning
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Linkages between Planning and
Controlling Cont…

11. 1. Goal: aim to be accomplished
2. Objectives are quantified and time bounded statements
3. Strategy: focuses on the way and means to achieve the
established objectives given the resource forecast
4. Forecasting: time, effort and resources
5. Budget: costs to complete project
6. Policy: making sure that action is oriented toward objective
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Components of a Plan

12. 12
Hierarchy of Organizational Plans
Goal
Strategic
Plan
Operational
Plans
Single Use
Plans
Standing
Plans
Tactical
Plan

13. ∗ This is the overall plan of the organization
∗ It is more of goal setting
∗ It is being developed by top management
∗ It includes the selection of areas of activities and objectives for
overall organizational structure and strategies for achieving
them
∗ They are plans that are designed to meet an organization’s
broad goals (policies and procedures)
∗ They set the framework for the organization to operate within
to achieve its overall goals
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Strategic Planning

14. ∗ Strategy refers to the art of planning in advance what one
wants to do or accomplish for gaining access to a particular
activity
∗ It decides on the major goals of the organization and what
policies will be used to achieve them
∗ It helps the management to have the organization compete
in, adapt to and interact with its environment
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Strategic Planning Cont..

15. ∗ Forcing managers to examine their plans
∗ Systematic means of analyzing the environment, assessing
organization’s strengths and identify opportunities where the
organization would have a competitive edge
∗ Move beyond the confines of corporate planning and includes
government agencies to assess their aspirations and identify
market opportunities in which they can survive.
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Importance of Strategic Planning

16. ∗ Set of procedures for translating broad strategic goals into
specific goals
∗ Aims at achieving tactical goals and implementing a
particular segment of organization’s plan
∗ Short time horizon
∗ Middle level managers deal with it
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Tactical Plans

17. 1. Cost Leadership
2. Differentiation
3. Focusing on narrow market segment
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Competitive Advantage

18. 1. Corporate Level Strategy
2. Business Unit Level Strategy
3. Functional Level Strategy
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Levels of Strategy

19. 1. Goal formulation
2. Identification of current Objectives and Strategy: what must be
done differently to achieve goals
3. Environmental Analysis
4. Resource Analysis: analyze its resources
5. Identification of Strategic Opportunities and Threats (SWOT)
6. Determination of Extent of Required Strategic Change
7. Strategic Decision Making: alternatives and evaluation of
alternatives
8. Strategic Implementation: incorporate into daily operations of the
organization
9. Measurement and control of progress: check progress at critical
stages( Is strategy achieving results or not)
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Strategic Planning Process

20. 1. Scarcity
2. Politics
3. Attitudes
4. Power Shifts
5. Technology
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Environmental Constraints

21. 1. Inflexibility
2. Executive Obsolescence
3. Values, Styles and Traditions
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Internal Constraints

22. ∗ Mission
The mission of the Papua New Guinea University of
Technology is to produce graduates and research of
high standard for development, critical evaluation and
application of science and technology for Papua New
Guinea and the Pacific.
∗ Goals
1. Scholarship Character Development: developing capacity
to engage in research and dissemination of products.
2. Externalization of Courses through flexible and distance modes
3. Entrepreneurial Character Development: to develop an operational
and management culture that enables it to continue as an able player in the
competitive market.
∗ Objectives
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University of Technology 2030

23. 2009 – 2013
• Strategic plans of schools alignment of to Unitech 2030
• Key foundations formulated & put in place
• Entrepreneurial culture in place in the institution
• Improved governance & management
• MTDS goals achieved
2014- 2018
• Self sustaining
• Partnerships with industry
• Effective institutional governance & management
• Innovative environment & culture in the institution
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Unitech Objectives

24. ∗ An organizations mission must be aligned to the goals,
objectives and strategies
∗ Based on the strategic plan of the organization, operational
plans are then developed
∗ These are activities that are intended to be undertaken to
achieve the mission of the organization
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Aligning of Mission to Strategies

25. ∗ A plan that contains details for carrying out or implementing tactical
plans in day to day activities
∗ It is a plan carried out by lower level management in order to fulfill
strategic and tactical plan
∗ It requires interpersonal relations as there must be constant
communication in this type of planning to ensure strategic goals are
correctly implemented and achieved
∗ Jobs are rescheduled and allocated to staff and machinery and other
resources
∗ Operational plans are divided into single use plans and standing
plans
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Operational Planning

26. ∗ The general purpose of the organization
∗ They are broad organizational goals that are given by the
founders of the organization
∗ All planning is based on the mission of the organization
∗ It is the pillar of the organization
∗ Goals are derived from the mission of the organization and
translated into objectives
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Mission Statement

27. 1. The ability to choose appropriate means to achieve an
objective
2. Setting appropriate goals and reaching them as specified
3. High quality planning
4. A clear direction of how to use available resources to
achieve goals
5. The ability to determine appropriate objectives by doing
the right thing
6. Requires controlling and
7. Deserves right implementation and monitoring
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Effective Planning

28. ∗ Responsive to the beneficiaries of the planning process
∗ Flexible
∗ Integrated
∗ Free from barriers
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Characteristics of Effective Planning

29. ∗ Planning must be beneficial to those who will be affected by it
∗ Planning must be flexible to be implemented successfully
∗ Plans must involve knowledgeable and capable persons who
will achieve set goals
∗ Planning must consider the behaviors and attitudes of people
∗ Planning must be considerate of the changes in the environment
∗ Planning must be considerate of the society in which the
organization operates
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Barriers to Effective Planning

30. ∗ MBO is a comprehensive goal setting and control system
relying on joint objective setting, feedback and performance
reviews between management and subordinates
∗ The heart of MBO is the objectives which spell out the
individual actions needed to fulfill the unit’s functional strategy
and annual objectives
∗ MBO provides a way to integrate focus and efforts of all
organizational members on the goals of higher management
and overall organizational strategy
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Management By Objectives

31. 1. Commitment to Program
2. Top level goal setting
3. Individuals goals
4. Participation
5. Autonomy in implementation of plans
6. Performance review
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Elements of MBO System

32. ∗ Develop objectives collaboratively
∗ Foster organizational activities
∗ Improvement in management, training and development
∗ Reduce uncertainty
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Strengths of MBO

33. ∗ Objectives may not be related organizational needs and
support goals
∗ Objectives may not be clear, concise and realistic
∗ Objectives may not provide guides to action
∗ Objectives may not be ambitious enough to offer challenge
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Weaknesses of MBO

34. Management:
• Uses powerful tools such as policy and procedures
• Looking at procedures and objectives
• Support and set goals
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Overcome Weaknesses of MBO

35. Q1. What is planning?
Q2. List and explain the basic steps in the planning process
Q3. Mention reasons why some managers hesitate or fail
to set goals for their organizations or units
Q4. Identify some functions that plans can serve
Q5. List and explain the tools or techniques that can be
used in planning.
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Tutorial Exercise