Chapter 2

PLANNING

By :Nasser A. Kadasah

Chapter 2 will cover:

2.1 Characteristics of planning

2.4 Types of Plans

2.8 Corporate Planning

Planning Process

PlansObjectives and

how to achieve them

How most effectivelyto lead people

What kind of organization structure

to have

What kind of peoplewe need and when

By furnishing standards of control

we have and directionWhich affect the kind of leadership

In order to ensure success of plans

Which helps us know

2.1 characteristics of Planning

Closely associated with goals: Implicit Explicit

Concerned with forecasting of future. Involves the selection of the best among

several alternatives. Comprehensive & required in every aspect

of the organization.

2.4 Types of Plans

2.4.1 Objectives 2.4.2 Policies2.4.3 Strategies 2.4.4 Procedures2.4.5 Rules 2.4.6 Methods2.4.7 Projects 2.4.8 Budgets

2.4 Types of Plans

Consist of several individuals plans or components: Standing plans: Objectives, Policies,

Strategies and Procedures. Single-use plans: Budgets, Targets and

Quotas.

Difference: standing plans used over along period of time while single-use used for specific time.

2.4.1 Objectives

Broad objectives: States the purpose of the entire organization.

Objectives: Set by the Management and the first step in planning. Serve as reference point for the efforts of the

organization.

2.4.2 Policies

General statements or understanding. Provides guidelines in decision- making

by subordinates. Might be in:

Explicit declaration in writing. To be interpreted from the behavior of the

organization members.

2.4.3 Strategies

Plans that take organization from a given position to another position.

The purpose of competitive strategy is to encounter the forces of competitors.

2.4.4 Procedures

Include how each of its tasks take place, when and by whom.

Once procedure is established it can be used over again.

2.4.4.2 Characteristics of Good Procedures…(1)

Based on facts: should be based on adequate facts of the particular situation.NOT: Guesses or Wishes.

Procedure as a system: must be organized as a system of interrelated activities in a network.

2.4.4.2 Characteristics of Good Procedures…(2)

Well-Balanced: Between STABILITY & FLEXABILITY.

Updating Procedures: continuous review of the procedures & may be ELEMINATE unnecessary ones.

2.4.4.2 Characteristics of good procedures…(3)

Minimize procedures: should be kept at the minimum possible, WHY: Costs money. Takes time. Paper handling. Delay.

2.4.5 Rules

Definition: A specific guide for action, established authoritatively and utilized in order to: Inform employees of conditions under which

designated actions are to be taken or activities are to be performed.

2.4.6 Methods

Is a step of a procedure. Definition: prescribed manner for

performing a given task with adequate consideration to: Objective Facility Total expenditure of time & money Effort

2.4.7 Projects

It’s a program. Definition: a type of plan which can be

thought of in terms of planned actions integrated into a unit and designed to bring about a stated objective.

2.4.8 Budgets

Express organization & departmental objectives in: Financial Non financial quantities.

Examples: Production Budget Purchasing Budget Materials Budget Sale Budget Advertising Budget Personnel Budget

2.8 Corporate Planning

2.8.1 Characteristics of Corporate Planning

2.8.2 Corporate Objectives

2.8.3 Importance of Corporate Planning

2.8.4 Process of Corporate Planning

2.8 Corporate Planning

The process of determining the major objectives of an organization & policies & strategies that will govern the acquisition & use of resources to achieve those objectives.

Concern with the overall shape of the organization and changes may take many years.

2.8.1 Characteristics of Corporate Planning

Deals with formulation of Objectives, Plans, Policies and Strategies.

Deals with future impact of current decisions. Involves identification of Opportunities and

Threats and matching them with strengths and weaknesses of the organization.

2.8.2 Corporate Objectives

Allocation of scarce resources. Adopts to environmental opportunities and

threats. Coordinates activities to reflect strengths

and weaknesses. To learn from the outcome of past strategic

decisions so as to make better decisions in future.

2.8.3 Importance of Corporate Planning

Encourages the habit of forward thinking by manager.

Helps in attaining overall coordinate of levels of the organization.

Creates great awareness of environment. Enables the organization to anticipate

technological changes. Leads to improvement in overall performance of

the organization.

2.8.4 Process of Corporate Planning…(1)

Scanning the environment: Economical, Social, Cultural, Political etc.

Making corporate appraisals: To identify: strengths and weaknesses.

Determining of mission and objectives. Making strategies:

Choosing an appropriate strategy after evaluating alternatives.

Process of Corporate Planning…(2)

Developing of action plans: Corporate planning should be broken into

policies, programs, budgets etc.

Implementing the strategy.