Short-Term Planning Concepts

Study Notes

Planning is a managerial function that establishes goals, sets strategies to achieve them, and coordinates work activities.
It involves deciding what to do, who will do it, how it will be done, and when.
Anticipation is a key element of planning, enabling proactive management.

Provides direction for both managers and non-managers.
Reduces uncertainty by identifying potential challenges before they arise.
Minimizes waste and redundancy by isolating unnecessary activities.
Establishes goals and standards, ensuring resources are allocated efficiently.
Focuses on objectives to avoid unprofitable actions, enhancing decision-making confidence and clarity.
Ensures control through measurement and feedback, promoting efficient resource usage.

Requires quality data and accurate assumptions, which are crucial for effective planning.
Can be expensive in terms of time and money, especially during the data-gathering phase.
May delay action if the planning process takes too long to complete.

Long-Term Plans:
- Last more than three years.
- Formulated by top-level managers.
Medium-Term Plans:
- Cover a period between one to three years.
- Developed by middle-level managers.
Short-Term Plans:
- Span less than one year, frequently reviewed (half-yearly, monthly, quarterly).
- Created by low-level managers.

Top Level Plans:
- Involves directors and general managers.
- Includes objectives, policies, budgets, typically long-term.
Middle Level Plans:
- Managed by department heads (e.g., financial, production).
- Often medium-term focused.
Lower-Level Plans:
- Created by foremen or supervisors.
- Primarily short-term in nature.

Corporate Level Plans:
- Designed for the entire organization, usually long-term.
Department Level Plans:
- Prepared by departments to address immediate challenges.
Special or Single Use Plans:
- Formulated for specific situations or one-time events, such as budgets and project schedules.