Definition and Nature of Planning PDF

Definition and Nature of Planning LESSON 1  Planning is the first management function and a very essential component of management. The following present the importance of planning: Planning provides direction to all of the organization's human resources- both managers as well as employees....

Definition and Nature of Planning LESSON 1  Planning is the first management function and a very essential component of management. The following present the importance of planning: Planning provides direction to all of the organization's human resources- both managers as well as employees. If they know what their firm or their work unit is trying to achieve and what activities they should engage in to be able to contribute to the achievement of the firm's set vision, mission, goals, and objectives, they would coordinate their actions and collaborate well with one another. Planning is important because it reduces uncertainty; it compels managers to consider future events that may affect their company. Anticipating changes and their impact will help managers and other workers to react to such changes appropriately  Minimizing of wastes will result if there is proper coordination of activities due to planning, negative practices, ineffectiveness, and inefficiencies could be easily detected and can be corrected or eliminated. Establishing goals and standards during planning may be used for controlling, another necessary managerial function. Without planning, goals and standards will be absent and controlling will not be possible. Relationship of Planning to Individual and Organizational Performance Is there a clear relationship between planning and performance? Although numerous researchers have shown a generally positive relationship between planning and performance, it would not be advisable, however, to judge that organizations or individuals who formally plan have better performance compared to those who do not plan.  There are other environmental factors that also affect individual or organizational performance, thus, result in reducing the impact of planning to performance. It is safer to say that the relationship between planning and performance is mainly due to association of systematic planning with the excellent financial status of the organization and higher return of investments, higher income, and profit that could be traced to the excellent performance of its human resources.  Finally, the planning-performance relationship could also be associated with the time spent in preparing and executing a formal organizational or individual plan. A well-thought-out plan requires a longer period of preparation; its execution or application must also be done for a certain period of time-months or years before it begins to affect performance. Difference between Goals and Plans Goals are the targets or desired ends that management wants to reach, while plans are the actions or means that administrators/managers intend to use to achieve organizational goals. In short, goals serve as the foundation of planning, Goals precede plans because knowing the desired targets is a must before establishing plans for reaching them. Definition of Terms Planning - is a process that Involves the setting of the organization's goals, establishing strategies for accomplishing those goals, and developing plans of action or means that managers Intend to use to achieve organizational goals Goal-setting - the identification of targets or desired ends that management wants to reach Vision - a mental image of what the organization will be in the future, as desired by the company management and employees Mission - basic purpose of an organization and range of their operations Objectives - steps needed in order to attain desired ends Types of Plans LESSON 2 Organizational plans can be generally described in terms of length of time covered or time frame. specificity, and frequency of use. Comprehensiveness refers to the completeness of planning coverage: for example: it may start from plans that cover the entire organization, called strategic plans, up to operational plans that apply to a particular operational area only. The more comprehensive the plan is, the better, as this could completely guide both the employer and employee toward the fast achievement of company goals. A plan may be long-term, or covering more than three years, or short-term, covering one year or less. Top-level management usually sets the long-range plans, while lower-level management focuses on short- term goals. Specificity refers to very detailed, clearly defined plans wherein objectives are clearly stated and could easily be understood. Simple language must be used in order to facilitate understanding of the plan. Frequency of use refers to the number of times or instances a plan may be used. For example, strategical plans have single use, while operational plans are usually standing or are used frequently or for several times. Referring to set plans is often necessary to ensure that all plans are carried out, thus, hastening the achievement of the organization's goals. Managers meet many planning challenges as they go about their tasks and direct their company's affairs. In some organizations, the planning environment is steady, but in others, it is dynamic, so, different types of plans are made to meet organizational needs. Different types of planning include the following: Strategic plans - plans that establish the organization's overall goals and apply to the entire firm; they are broad in scope and are the responsibility of the CEO, president, and general manager of the company. Operational plans - plans that apply to a particular unit area only, their scope is narrow; achievement of company goals may not be achieved if operational plans are not clear. Long-term plans - plans that go beyond three years; everyone must understand the organization's long-term plans to avoid confusion that may divert the organization members' attention. Short-term plans - plans that cover one year or less; such plans must lead toward the attainment of long- term goals and are the responsibility of the unit/department heads. Directional plans - plans that are flexible or give general guidelines only; although flexible and general, these plans must still be related to the strategic plans. Specific plans - plans that are clearly stated and which have no room for interpretation; language used must be very understandable Single-use plans - plans used or stated once only as this applies to the entire organization; refer to the operational plans of the firm. Standing plans - plans that are ongoing; provide guidance for different activities done repeatedly; refer to the identified activities of operational plans. Steps in Planning Planning is a process and, as such, involves steps from carrying out its purpose, setting of goals/objectives, and determining what should be done to accomplish them. Schermerhorn (2008) gave five steps in the planning process: 1. Define your goals/objectives by identifying desired outcomes/results in very specific ways. 2. Determine where you stand in relation to set goals/objectives; know your strengths and weaknesses. 3. Develop premises regarding future conditions; anticipate future events, generate alternative "scenarios" for what may happen; identify for each scenario things that may help or hinder progress toward your goals/ objectives; 4. Analyze and choose among action alternatives; list and carefully evaluate possible actions and choose the alternative most likely to accomplish goals/objectives. 5. Implement the plan and evaluate results; take corrective action and revise plans as needed. Definition of Terms Organizational Plan - a comprehensive plan for the entire organization covering time frame, specific purpose, frequency of use, and others Strategic Plan - plans that establish the organization's overall goals and apply to the entire firm; they are broad in scope and are the responsibility of the organization's President or Chief Operating Officer, and several managers Operational Plan - plans that apply to a particular unit area only; their scope is narrow and prepared by lower level managers