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Planning
CHAPTER 2
Planning defined
The process of outlining the activities that are necessary to
achieve the goals of the organization.
A plan
A blueprint for action that prescribes the activities necessary for
an organization to realize their goals.
Purpose of Planning
The purpose of planning is simple to ensure that the
organization is both effective and efficient in its activities.
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The Importance of Planning
The purpose of planning is simple to ensure that the
organization is both effective and efficient in its activities.
1. Helps to determine what are companys opportunities
2. Planning enables company to identify the course of action
3. Without planning much will be left out
4. Through plan, resources are efficiently and effectively
utilized, resulting in saving resources.
5. When we plan we know what are we really expected and
becoming more meaningful.
6. It helps to achieve goals and reduces overlapping activities
The Importance of Planning
7. Planning can provide effective utilization of available facilities.
8. Planning helps managers to become confident and aggressive
leader can cope with all the problems.
9. Planning guides management thinking to future desirable
activities and what must be done to attain goals.
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Goals and Controls
Goals
Provide a clear, engaging sense of direction and specify what is
to be accomplished
Control
Monitor the extent to which goals have been achieved and
ensure the organization is moving in the right direction.
Planning as a Linking Mechanism
GOALS
Provide a clear, engaging sense of
direction and specify what is to be
accomplished
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Planning as a Linking Mechanism
GOALS CONTROL
Provide a clear, engaging
sense of direction and
specify what is to be
accomplished.
Monitor the extent to
which goals have been
achieved and ensure the
organization is moving in
the right direction
Planning as a Linking Mechanism
GOALS CONTROL PLANS
Relationship among goals , plans and
controls
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Benefits of Planning
Better coordination
Focus on Forward Thinking
Participatory Work Environment
More Effective Control System
Where Should Planning Begin?
Planning efforts begin
with the board of
directors and top
executives of
the firm.
Top-Down Planning
Bottom-Up Planning
Planning is
initiated at the
lowest level in
the organization
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Advantages of Each Approach
Top-Down Planning
The advantage is that the top managers, who are the most
knowledgeable about the firm as a whole, drive the
development of the plan.
Bottom-Up Planning
The primary advantage is that the people closest to the
operating system, customers, and suppliers drive the
development of the plan.
Strategy/ Strategic Planning A comprehensive plan for accomplishing an organization
goals and objectives. [strategy]
Strategic planning is the process
by which an organization makes
decisions and takes actions that
affect its long-run performance.
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Strategy/ Strategic Planning
A strategic plan is the output of the strategic planning
process
Strategic plans define both the markets in which the firm
competes and the ways in which it competes in those
market.
The resulting comprehensive plan that provides overall
direction for the organization.
Level of Planning In general, most organization engage in both :
1. Strategic Planning
2. Operational Planning
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Planning in the Hierarchy of
Organizations
Top
Executives
Middle-Level
Managers
First-Level
Managers Operational
Planning
Strategic
Planning
The Purpose of Strategic Planning
To move the organization from
where it is to where it wants to
be.
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Levels of Strategic Planning : Planning
Focus
Corporate
What business should we
be in?
Business
How do we compete in
our existing lines of
business?
Functional
How do we implement
our corporate and business
strategies
Levels of Strategic Planning :
Participants
Corporate
Board of directors and top-
level executives
Business
Top-level executives and
managers within the
business unit
Functional
Mid-level managers and
lower-level managers
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Levels of Strategic Planning : Scope &
Time Horizons
Corporate
Broad strategies 5 to 10
year time horizon
Business
More specific strategies 1
to 5 year time horizon
Functional
Very specific strategies 1 to
2 year time horizon
Functional Strategic Planning
Functional strategy specifies activities necessary to
implement the organizations corporate and business
strategies
Operations
R&D
Financial
Human resource management
Marketing
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Mission Statements
A statement of an
organizational fundamental
purpose
Importance of Mission Statement
1. It sets the strategic direction of an organization
Why we are here and where are we going
2. It provide a foundation for the development of
business strategy
3. It determines how well it serves the
organizational stakeholders : individuals and
group directly affected by an organizational
and its accomplishment.
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Developing a Mission Statement
Concise and meaningful
It must describe the three primary aspect of an organization
1. Its primary product or services
2. Its primary targets markets
3. Overall strategy for ensuring long term success
It must become a natural part of the organization.
Embodied in the minds, habits, attitudes and decisions of
everyone in the company everyday.
Types of Organizational / Operational
Plan
Critical element in effective planning
Aim at achieving goals
Narrowly focused, have relative short term and involved
lower level manager
Two types of organizational plan :
1. Single-Use Plan
2. Standing Plans
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Types of Organizational / Operational
Plan
Single- Use Plan
It is develop to carry out a course of action not likely to
be repeated in the future. There are 3 types :
1. Program
2. Project
3. Budget
Types of Organizational / Operational
Plan
Single-Use plan
1. Program
Single-used plan for large set of activities
2. Project
Single-used plan for less scope and complexity than program.
May be part of broad program OR a self contained single-
used plan.
3. Budget
Statement of financial resources set aside for a specific
activities in a given period of time.
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Types of Organizational / Operational
Plan
Standing Plan
It is develop for activities that recur regularly over a
period of time. There are 3 types :
1. Policies
2. Standard operating procedure
3. Rules and Regulations
Types of Organizational / Operational
Plan
Standing Plan
1. Policies
Standing plan that specifies the organizations general response to a
designated problem OR situation
2. Standard operating procedure
Standing plan that outlines the steps to be followed in a
particular circumstances
3. Rules and regulations
Standing plan that describe exactly how activities are to be
carried out
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END OF CHAPTER 2
Write by : Nurfaizah Sahimi
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