Objectives
Discuss
the nature of Planning
Levels of Planning
types of plans
- Peter F. Drucker
PLANNING
Is a core function of managers
It helps managers make decisions and formulate
strategies that will enable their companies to achieve
their goals
It requires managers to envision their actions,
anticipate results, and review options
Effective planning requires and understanding of the
environment and the factors that influence the
company
It shapes the goals and defines the operations and
activities of the company
PLANNING
Top management defines the goals and comes up with
general plans, which are then given to lower
management.
Lower managers conduct their own planning to
implement the general plans and come up with
concrete means to achieve the goals of top
management
PLANNING
It is an intellectual exercise.
Because decision making is a very crucial part of
planning, meticulous deliberation is required, goals
must be clearly established and these should adhere to
the vision and mission of the company. Strategies
should also be presented in detail to clearly determine
the course the company will take in achieving its goals.
Vision and Mission Statements
The identity and reason for being is embodied in a
company’s vision and mission statements.
A VISION Statement describes what the company
wants to achieve and where it wants to go in the future.
It determines the course and direction of the company
and identifies which markets, technologies, products,
or customers to focus on.
Characteristics of effectively
worded Vision statement
1. Graphic
The vision projects to the market the kind of
company that the management wants to create and
the kind of company it aspires to be.
Characteristics of effectively
worded Vision statement
2. Directional
It describes the path where the company wants to go
and presents specific plans to move forward in the
future
Characteristics of effectively
worded Vision statement
3. Focused – the vision is very specific so managers are
properly guided on what to do in terms of resources
and strategies.
Characteristics of effectively
worded Vision statement
4. Flexible – Although, the vision should be focused, it
allows room for managers to chase based on market
situations, technological advancements, customer
preferences.
Characteristics of effectively
worded Vision statement
5. Feasible – the vision is achievable and realistic
Characteristics of effectively
worded Vision statement
6. Desirable – the vision is clear on why the path is
practically sensible and serves the interests of
members in the long run.
Characteristics of effectively
worded Vision statement
7. Easy to communicate – the vision is easy to
understand, articulated, and can be simplified into a
powerful slogan.
MISSION Statement
Describes a company’s reason for its existence. It
answers the question why the company exists. A good
mission statement identifies the company’s products
and services; the customers’ needs that the company
seeks to satisfy; the target markets that it wants to
serve; and the approach to be taken to satisfy
customers’ needs. Lastly, it should present the
company’s unique identity that distinguishes itself
from competitors.
Goals and Objectives
GOALS – are specific accomplishments or action plans
that are usually attained after a long period. These are
broader in scope because the intentions are more
general and involve outputs tat are intangible and
non-measurable.
Goals and Objectives
OBJECTIVES – refer to action plans that involve
shorter periods and more measurable outputs. These
tend to be more specific and result in tangible
outcomes.
Goals and Objectives
The goal is to increase revenues and minimize
expenses.
To achieve this goal, the company can identify the
following objectives:
1. Increase annual sales by 10% by having three
corporate accounts every month.
2. Minimize expenses by cutting monthly utility
bills by 12%.
TYPES OF PLANS
1. Strategic Plans
These plans are designed by the top management
such as CEO or president. These are usually broad
plans based on the company’s vision, mission, and
values, and address the company as a whole. They
are used as bases for more specific plans that will
enable the company to achieve growth and
profitability, boost productivity, and return on
investment, and improve customer service.
TYPES OF PLANS
2. Tactical Plans – While strategic plans involve the
company as a whole, tactical plans create specific plans
for specific areas of the company. These plans
translate broader plans into functional goals for each
area or department. The elements of tactical plans
include budget, resources, and goals with specific
deadlines.
TYPES OF PLANS
3. Operational Plans – these are specific procedures
and processes made by frontline or low level
managers. Operational plans often involve specific
events such as marketing campaigns, campus
recruitment, and others. Operational planning also
involves the formulation of on-going plans that define
specific operations of the organization.
TYPES OF PLANS
On-going plans can be in any of the following forms:
a. Policy – a set of principles that guide managers in
addressing a particular issue.
b. Rule – a regulation which describes and regulates
the functions of an organization
c. Procedure – a step-by-step process in accomplishing
a task or achieving an objective
The Planning Process
FORMULATE THE GOALS AND OBJECTIVES
IDENTIFY THE COURSES OF ACTION
ASSIGN RESPONSIBILITIES
DOCUMENT THE PLAN AND DISTRIBUTE
TO PEOPLE CONCERNED
REVIEW THE PLAN AND ADJUST ACCORDINGLY
1. TOP-LEVEL MANAGEMENT
PLANNING
a. Corporate Strategy – is usually conceptualize by the
chief executive officer and other members of the top
management. A comprehensive and detailed plan is
formulated as the backbone of subsequent plan.
Top level planning is essential for a diversified
company or a company with multiple businesses. It is
needed for crucial tasks such as identifying which
industries a company will invest in or which business
ventures it should undertake in the future.
b. General Business strategy is formulated by the top
management to build a competitive advantage for single
business unit of a diversified company. They are aided
by unit heads who contribute crucial information that
determines targets and appropriate strategies to achieve
them.
2. MIDDLE LEVEL MANAGEMENT
PLANNING
A Functional strategy determines a particular
function or process and is formulated for middle level
management. The one who formulates a functional
strategy is usually the manager in charge of the
department or area concerned. The general manager
then approves the strategy.
3. LOW-LEVEL MANAGEMENT
PLANNING
Operational strategy is a narrower and more focused strategy
formulated by the low-level managers or frontline supervisors.
Operational planning requires the identification of resources that
can be utilized to achieve the outlined plans and goals.
Implementation includes all levels of manageent.
• Financial Resources – includes the capital or investment that a
company needs to start and sustain the business.
• Human Resources – are the company’s primary assets that are
composed of employees who possess the skills and competencies
needed for specific tasks and operations.
• Physical Resources – include production facilities, distribution
channels, and information technology systems that enable the
execution of strategies.
PLANNING TECHNIQUES
1. Brainstorming – stimulates thinking and allows the
group to work together in generating ideas.
2. Nominal Group Technique – highly structured method
that allows members to give their own inputs based on an
agenda but restricts personal discussion among group
members and minimizes conflict during discussion.
3. Delphi Technique – similar to nominal group but the
difference lies in the means of formulating courses of
action. This does not require group meeting instead
leaders distributes questionnaires to collect and
assimilate ideas.
PLANNING TOOLS
1. Decision Tree – an excellent tool for weighing
different alternatives. It consist a graph showing
potential and alternative decision paths for the
proposed plan. This is useful for decisions that
involve a succession of small decisions.
PLANNING TOOLS
2. Payback Method – managers use this method in
evaluating alternatives in purchasing equipment,
furniture, and fixtures. Factors to consider are length of
use of utility, warranties, cost of repair, maintenance
cost, and sales generated for a specific period before
actually buying a product.
1. RATIONAL OR LOGICAL DECISION
MODEL
3. Predisposed Decision Model
The manager, once he or she decides on a solution, will
no longer look for other alternative solutions. The
chosen solution is considered the most acceptable and
effective solution and the manager then gathers the
needed resources to implement the decision. This
model is the weakest since the manager makes a
unilateral, snap decision. There is also a tendency for
the manager who makes the decision to collect data
and information that support his or her decision,
ignoring all other contrary data.
OBSERVE-ORIENT-DECIDE-ACT
LOOP MODEL
