Planning: Definitions, Purposes, and Types

• Chapter 2 examines planning, including definitions, purposes, types, and hierarchical structure within organizations.

Definition of Planning

• Planning is analyzing current or past information to forecast the future and achieve organizational goals.
• Managers can form organizational goals and choose suitable actions to achieve them through planning.
• Certo (1997) defines planning as how management moves the organization towards achieving its goals.
• Stoner, Freeman, and Gilbert (1995) describe planning as devising goals and acting to achieve them.
• Dessler (2001) defines planning as selecting suitable actions to achieve goals, and notes it is a preset method before acting.
• Planning is setting an organization's goals and objectives, establishing a strategy, and determining what to do and how to do it.

Purposes of Planning

• Planning sets standards for control, provides direction, minimizes waste, and reduces the impact of change.
• By establishing goals, actions are coordinated effectively, developing teamwork and cooperation.
• Helps to clarify the consequences of actions that managers may take in response to change.
• Minimizes waste by coordinating activities, which avoids wasted resources and redundancy.
• Decisions are future-oriented, planning helps organizations to make current decisions wisely.
• Managers can express creativity and innovation in the plans they develop.
• Prerequisite for all other management functions like organizing, leading, controlling, and staffing.

Types of Planning

• There are three types of planning: strategic, tactical, and operational.
• Strategic planning is long-term.
• Tactical planning is mid-term.
• Operational planning is short-term.

Planning Hierarchy

• The hierarchy of planning ascends from the organization's mission to individual objectives

Strategic Planning

• Strategic planning is conducted for a period more than 5 years.
• Strategic planning involves setting long-term goals and objectives for an organization.
• Strategic planning includes selecting suitable actions to allocate organizational resources to achieve these goals.
• Strategic planning is performed by top-line managers or strategic managers.
• Strategic planning influences tactical and operational plans.

Tactical Planning

• Tactical planning is also known as mid-term planning.
• Tactical planning is performed by middle-line managers.
• Tactical covers a shorter time, between 1 and 5 years.
• Tactical planning clarifies roles and contributions of each department or division toward strategic goals.

Operational Planning

• Operational planning targets specific scopes such as job units within the organization.
• Operational planning provides specific guidance on the roles and responsibilities of relevant parties.
• Strategic and tactical planning is implemented.
• Operational planning is developed by first-line managers or operational managers.
• Operational planning is performed for a time duration of one year or less.
• Operational planning is also short-term planning.
• Operational planning has two types: single-use plan and standing plan.
  • Example single-use plans include programs, projects and budgets.
  • Example standing plans include policy, procedure, and rule.

Planning Process

• The planning process involves goal-setting, defining the current situation, identifying assistance and resistance.
• Also involves new plans and actions, and re-evaluating goals.
• Goals must be clear, realistic, and logical.
• Managers are expected to formulate new plans when barriers arise or when the planning isn't successful.