PLANNING AND

DECISION-MAKING
Essentials of Planning and Decision-Making
Planning…
¨ The most fundamental and basic of all
management function
¨ Includes a rational approach in selecting and
achieving goals and objectives and deciding on
the actions to achieve them.
¨ It involves looking ahead and preparing for the
future. Thus, nothing can be done without a plan.
Close Relationship of
Planning and Controlling

¨ Planning and Controlling are inseparable.

They are the Siamese Twins of Management.
New Plans

Controlling:
Implementation Comparing No undesirable
Planning of plans deviation from
plans with
results plans

Corrective action
Figure 1:
Close Relationship of Planning and Controlling
Close Relationship of
Planning and Controlling

¨ Any attempt to control without plans is

meaningless, since there is no way for people to tell
whether they are going where they want to go
(the result of the task of control) unlessthey first
know where they want to go (part of the task of
planning).
¨ Plans thus furnish the standards of control.
The Planning Period
¨ Short-run planning covers a period of 6 to 12
months.
¨ Intermediate-range plans are from 1 to 5 years

¨ Long-term planning may range from 5, 10 to

even 20 years.
How long should the planning period be?

The length of the period for which an enterprise

plan vary on
¨ the type of the enterprise

¨ the kind of industry

¨ the production cycle

¨ the quality of managerial practice

¨ and many other factors in the decision

Types of Plans
1. Visions
2. Missions or Purposes
3. Goals or Objectives
4. Strategies
5. Policies
6. Procedures
7. Rules
8. Programs
9. Budgets
Types of Plans
1. Vision
Ø A picture of the state of the desired outcome in
the future usually in the long term from current
time.
Ø It answers the question “where do we want to
go?” or ―what do we want to become?ǁ
Ø It may be a plan or a goal. Like objectives a
vision statement should be specific, measurable,
attainable, realistic and time-bound.
Developing a Vision
¨ Begins with thinking strategically
Ø About the firm’s future makeup;

Ø Forming vision of firm’s future in 5-10 years

Ø Task is to:

n Inject sense of purpose into firm’s activities;

n Provide LONG-TERM DIRECTION;
n Give the firmSTRONG IDENTITY;
n Decide “WHO we are, WHAT we do, & WHERE we are

headed”
VISION STATEMENTS
FAMOUS COMPANIES
MAPUA

¨ ―shall be a global center of excellence in

education by providing instructionsthat are
current in content and state-of-the-art in
delivery; by engaging in cutting-edge, high-
impact research; and by aggressively taking
on present-day global concernsǁ
NESTLE

¨ ―create trustworthy products, systemsand

servicesthat contribute to improving the quality
of consumers‘ livesǁ
- Werner Bauer
Chief Technology Officer, Nestlé S.A.
Innovation, Technology and Research & Development
NIKE

¨ "To bring inspiration and innovation to every

athlete* in the world"

* If you have a body, you are an athlete.

AMAZON.COM

¨ ―To be earth‘smost customer centric company;

to build a place where people can come to
find and discover anything they might want to
buy onlineǁ
APPLE

¨ Apple is committed to bringing the best

personal computing experience to students,
educators, creative professionals and
consumers around the world through its
innovative hardware, software and Internet
offerings.
METROBANK

¨ ―To be the best bank for all stakeholders –

from its customers to the communityǁ
ST. LUKE‘S HOSPITAL

¨ ―The great purpose for which this hospital was

begun— the helping of suffering humanity back
to health and life.ǁ
– Rt. Rev. James B. Funsten,
Bishop, Episcopal Diocese of Idaho, 1906
TOYOTA

¨ ―Tosustainprofitable growth by providing the

best customer experience and dealer supportǁ
JOLLIBEE

¨ ―Toserve great tasting food, bringing the joy

of eating to everyoneǁ
MICROSOFT

¨ ―To create experiences that combine the magic

of software with the power of Internet services
across a world of devicesǁ
GLOBE TELECOM

¨ Commitment to "enriching lives through ease

and relevance"
DISNEYLAND

¨ ―To be the happiest place on earthǁ

Types of Plans
2. Purposes or Missions
Ø Identifies the basic purpose or function or tasks of the organization
or any part of it.
Ø In every social system, enterprises have a basic function or task
assigned to them by society.
Ø For example,
ü business - production and distribution of goods and services
ü state highway department - design, building, and operation of a
system of state highways
ü courts - interpretation of laws and their application
ü university - teaching, research, and providing services to the
community
MISSION STATEMENTS
FAMOUS COMPANIES
COCA-COLA

¨ ―To refresh the world...

To inspire moments of optimismand
happiness...
To create value and make a difference.ǁ
DELL

¨ ―To be the most successful computer company in

the world at delivering the best customer
experience in markets we serveǁ
FACEBOOK

¨ ―To give people the power to share and make

the world more open and connectedǁ
MC DONALD‘S

¨ ―Be our customers' favorite place and way to

eat"
NOKIA

¨ ―Connecting peopleǁ
STARBUCKS

¨ ―Toinspire and nurture the humanspirit – one

person, one cup and one neighborhood at a
timeǁ
GOOGLE

¨ ―Toorganize the world‗s information and make

it universally accessible and usefulǁ
MAPUA

¨ ―The Institute, using the most effective and

efficient means,provides its students with
highly relevant professional and advanced
education in preparation for and furtherance
of global practiceǁ
Types of Plans
3. Goals or Objectives

Ø Represent not only the end point of planning, but

also the end toward which organizing,
directing/leading, and controlling are aimed.
TYPES OF OBJECTIVES NEEDED by an
Organization:

1. Financial Objectives
Ø Outcomes that relate to improving firm’s financial
performance
SPECIFIC FINANCIAL
CORPORATE OBJECTIVES
¨ McCORMICK & COMPANY
• Improve returns from each of our existing operating groups.
• Achieve a 20% return on equity.
• Achieve net sales growth rate of 10% per year.
• Maintain an average earnings per share growth rate of 15%
per year.
SPECIFIC FINACIAL
CORPORATE OBJECTIVES
¨ QUAKER OATSCOMPANY

Ø Toachieve return on equity at 20% or above, “real” earnings

growth averaging 5% or better over time, be a leading
marketer of strong consumerbrands, and improve the
profitability of low-return businesses or divest them.
TYPES OF OBJECTIVES NEEDED by an
Organization:

2. Strategic Objectives
Ø Outcomes that will result in greater competitiveness &
stronger long-term market position
SPECIFIC STRATEGIC
CORPORATE OBJECTIVES

¨ NIKE
Ø Protect & improve Nike’s position as the number one athletic
brand in America.
Ø Build a strong momentum in growing fitness market.
Ø Intensify the company’s effort to develop products that
customers need and want.
SPECIFIC STRATEGIC
CORPORATE OBJECTIVES
¨ ATLASCORPORATION

Ø To become a low-cost, medium-size gold producer, producing

in excess of 125,000 ounces of gold a year and building gold
reserves of 1,500,000
Types of Plans
4. Strategies
Ø Defined as the determination of the basic long-
term objectives of an enterprise
Ø The art of using organizational resources to
reach the goals defined.
Ø Consists of competitive moves & business
approaches to produce successful performance
Types of Plans
Ø Strategies are management’s “game plan” for:
ü Running the business
ü Strengthening firm’s competitive position
ü Satisfying customers
ü Achieving performance targets
Ø Examples:
ü Improving the market standing
ü Increasing productivity goals
ü Product innovation
ü Systems development
Types of Plans
5. Policies
Ø General statements or understandingsthat guide or
channel thinking in decision making.
Ø They help decide issuesbefore they become
problems.
Ø Behavioral guidelines that set boundaries
on what managers can and cannot do;
provide criteria to follow in order to
implement operational objectives.
Sample Attendance Policy: No-Fault Point System

The goal of this attendance policy is to reward good attendance and

eliminate people with poor attendance. It uses a point system, and does
not excuse or unexcuse absences.

In a no fault attendance system, absences are recorded thus:

Each absence = 1 point (no multi-day occurrences)
Each late in (tardy) or early out = 1/2 point
Each no-show for work = 2 points
Each return with no prior call = 1 point
üEach absence-free quarter eliminates all points and rewards the
employee with a day off with pay.
ü Each employee starts fresh, with no points, each year.

Progressive disciplinary action accompanies a no-fault attendance

system. If an employee earns:
7 points = verbal warning
8 points = written warning
9 points = 3 day suspension
10 points = termination
Types of Plans
6. Procedures
Ø Establish a chronological sequences of required actions in
handling future activities;
Ø Details of the exact manner in which certain activities must
be accomplished;
Ø Procedures are guides to action; therefore they are more
specific than policies. Policies define a broad field whose
area is determined and limited by the objectives of the
enterprise. Procedures show the sequence of concrete acts.
Example:
Policy statement: “The customer is always right”

In a department store, the procedure might be to send a

complaining customer to the supervisor, then to the
department manager and finally to the adjustment office.

Whatever decision these various managers make will be

within the broad guideline of thinking that the customer is
right. Although the managers might not believe in a
particular instance that the customer is justified, the
complaint will be handled according to a prescribed
procedure from the policy of the store.
Sample Procedure for Hiring New Employees
1. Determine the need for a new or replacement position.
2.Develop and prioritize the key requirements needed from the position and
the special qualifications, traits, characteristics, and experience looked for in a
candidate. With HR department assistance, develop the job description and
salary range for the position.
3.Advertise or post the job opportunities in the bulletin board, company
website, print media, etc.
4. Send an all-company email to notify staff that a position has been posted
and that the company is open for hiring employees.
5.Interested candidates shall fill out the Position Application. Schedule an
interview for candidates, with the hiring supervisor, the manager of the hiring
supervisor or a customer of the position and HR. (In all cases, tell the
candidates the timelines you anticipate the interview process will take.)
6.Hold the interviews with each interviewer clear about their role in the
interview process. Interviewers shall fill out the Job Candidate Evaluation
Form.
7.If no candidates are selected for the position, make certain to clearly
communicate with the applicants that they were not selected. If a candidate is
selected for the position, prepare a written job offer that includes the new job
description and salary.
Types of Plans
7. Rules
Ø Spell out specific required actions or nonactions.
Ø Usually the simplest type of plan.
Ø The essence of rule is that it reflects a
managerial decision that a certain action must –
or must not – be taken.
Ø Rulesare different from policies in that policies
are meant to guide decision making by marking
off areas in which managers can use their
discretion, while rules allow no discretion in their
application.
Sample of Simple Rules

NO P
Eating
Drinking No littering
Smoking

Classroom Rules:
1. Everyone deserves respect.
2. Come to class prepared.
3. Do your best.
4. Have a winning attitude.
5. Have fun and learn!
Types of Plans
8. Programs
Ø A complex of goal, policies, procedures,
rules, task assignments, steps to be taken,
resources to be employed, and other
elements necessary to carry out a given
course of action;
Ø They are ordinarily supported by budgets.
Sample Program: Emergency Action Program
Sample Program: Emergency Action Program
Sample Program: Emergency Action Program
Sample Program: Emergency Action Program
Sample Program: Emergency Action Program
Sample Program: Emergency Action Program
Types of Plans
9. Budgets
Ø A statement of expected results expressed in numerical terms; may
be called a “ quantified” plan. The financial operating budget is
often called a “profit plan”.
Ø May be expressed in financial terms - in terms of labor-hours, units of
product, or machine-hours; or in any other numericallymeasurable
terms.
Ø Budgets are also control devices. However, making a budget isclearly
planning.Thebudget isthe fundamentalplanninginstrumentin many
companies.
Ø The budget is necessary for control, but it cannot serve as a sensible
standard of control unless it reflects plans.
Examples of Budgets

q Business start-up budget – includes a list of all necessary

purchases including tangible assets (for example,
equipment, inventory) and services (for example,
remodeling, insurance), (working capital), sourcesand
collateral
q Corporate budget - a finished budget for the short-term
future, typically one year
q Government budget - a summary or plan of the intended
revenues and expenditures of that government
q Personal or family budget - all sourcesof income(inflows)
are identified and expenses(outflows) are planned with the
intent of matching outflows to inflows (making ends meet)
Steps in Planning

1. Being Aware of Opportunities

• All managers should:
Ø Take at preliminary look at possible future opportunities
and see them clearly and completely.
Ø Know where their company stands in the light of its
strengthsand weaknesses.
Ø Understand what problems it has to solve and why.
Ø Know what it can expect to gain.
• Planning requires a realisticdiagnosisoftheopportunity
situation.
 Steps in Planning
2. Establishing Objectives
Ø Tobe done for the long-term as well as for the short
range.

Ø Objective specify the expected results and indicate

the end points of what isto be done, where the
primary emphasis is to be placed, and what is to be
accomplished.

Ø Objectives must be SMART.

Steps in Planning
3. Developing Premises
Ø Establish, circulate, and obtain agreement to
utilize critical planning premises such as
forecasts, applicable basic policies, and existing
company plans.
Ø Premises are assumptionsabout the environment in
which the plan is to be carried out.
Steps in Planning
4. Determining Alternative Courses
Ø Search for and examine alternative courses of
action, especially those not apparent.
Ø Themore commonproblemisnot finding
alternatives but reducing the number of
alternatives so that the mostpromising may be
analyzed.
Ø Even with mathematical techniques and the
computer, there is limit of the number of
alternatives that can be thoroughly examined.
Steps in Planning
5. Evaluating Alternative Courses
Ø Evaluate the alternatives by weighing them
in the light of premises and goals.
Steps in Planning
6. Selecting a Course
Ø This is the point at which the plan is adopted – the
real point of decision making.

Ø Occasionally, an analysis and evaluation of

alternative courseswill disclose that two ormore
are advisable, and the manager maydecideto
follow several coursesrather than the one best
course.
Steps in Planning
7. Formulating Derivative Plans
Ø When a decision ismade, planning is
seldom complete, and a seventh step is
indicated.

Ø Derivative oractionplansare almost

invariably required to support the basic
plan.
Steps in Planning
8. Quantifying Plans by Budgeting
Ø Quantify decisions and plan by converting them into
budgets.
Ø Theoverallbudgetof an enterprise represents the sum
total ofincomeandexpenses,with resultant profit or
surplus, and the budgets of major balance sheet items
such as cash and capital expenditures.
Ø If done well, budgets become a meansof adding
various plans and set important standardsagainst which
planning progresscan be measured.
 Steps in Planning
B e i n g a w a r e o f
o p p o r t u n i t i e s C o m p a r i n g a l t e r n a t i v e s i n
I n l i g h t o f : l i g h t o f g o a l s
• T h e m a r k e t W h i c h a l t e r n a t i v e w i l l g i v e u s
• C o m p e t i t i o n t h e b e s t c h a n c e o f m e e t i n g
• W h a t c u s t o m e r w a n t o u r g o a l s a t t h e l o w e s t c o s t
• O u r s t r e n g t h s a n d h i g h e s t p r o f i t ?
• O u r w e a k n e s s e s

C h o o s i n g a n a l t e r n a t i v e
S e l e c t i n g t h e c o u r s e o f a c t i o n
S e t t i n g o b j e c t i v e s o r g o a l s w e w i l l p u r s u e .
W h e r e w e w a n t t o b e a n d
w h a t w e w a n t t o a c c o m p l i s h
a n d w h e n .

F o r m u l a t i n g s u p p o r t i n g
p l a n s
S u c h a s p l a n s t o :
• B u y e q u i p m e n t
C o n s i d e r i n g p l a n n i n g • B u y m a t e r i a l s
p r e m i s e s
• H i r e a n d t r a i n w o r k e r s
I n w h a t e n v i r o n m e n t – i n t e r n a l
• D e v e l o p a n e w p r o d u c t
o r e x t e r n a l – w i l l o u r p l a n s
o p e r a t e ?

Q u a n t i f y i n g p l a n s b y
m a k i n g b u d g e t s
D e v e l o p i n g s u c h b u d g e t s a s :
• V o l u m e a n d p r i c e o f s a l e s
I d e n t i f y i n g a l t e r n a t i v e s • O p e r a t i n g e x p e n s e s
W h a t a r e t h e m o s t p r o m i s i n g n e c e s s a r y f o r p l a n s
a l t e r n a t i v e s t o a c c o m p l i s h i n g • E x p e n d i t u r e s f o r c a p i t a l
o u r o b j e c t i v e s ? e q u i p m e n t

F i g u r e 2 . 0
S t e p s i n P l a n n i n g
PLANNING TOOLS &
TECHNIQUES
1. Gantt Chart
2. Pert-CPM Chart
3. Systems Flowchart
4. Cause & Effect Diagram
5. Process Maps
6. SWOT Analysis
7. TOWS Matrix
Gantt Chart
Ø first project planning and control technique to emerge
during 1940’s in response to the need to manage
complex defense projects and systems better
Ø a tool for planning and scheduling an Analyst
performance during a systems project and for machine
supplies delivery during the installation phase of a
project
Ø shows the anticipated completion times for various
project activities as bars plotted against time on the
horizontal axis
Gantt Chart – Work Schedule
Gantt Chart – Project Development
Program Evaluation & Review Technique (PERT) /
Critical Path Method (CPM) Charts

Ø a planning and control tool that graphically portrays the

optimum way to attain some predetermined objective,
generally in terms of time
Ø presents a graphic illustration of a project as a network
diagram consisting of numbered nodes (either circles
or rectangles) representing events, or milestones in the
project linked by labeled vectors (directional lines)
representing tasks in the project. The direction of the
arrows on the lines indicates the sequence of tasks.
PERT/CPM Chart – PC Card
Systems Flowchart

Ø explains how a system works using a diagram.

The diagram shows the flow of data through a
system.
Ø The different shaped symbols used are:

Start/end of
the process Decision

Operation
Connector
Deployment
Flowchart
–
New Product
Development
Cause and Effect Diagram

Ø also known as “fishbone diagram”, developed

by Ishikawa in the early 1950s

Ø method consists of defining an occurrence of a

typically undesirable event or problem (effect)
and then identifying contributing factors
(causes)
Cause & Effect Diagram
Cause & Effect Diagram
Process Map

Ø visually depicts the sequence of events to build a

product or produce an outcome
Ø shows all the process associated activities, including
volumes of input and output, approvals, exceptions,
and cross-functional hand-offs.
Ø the basic goal is to provide a unifying vision of business
processes so that participating organizations and
individuals can have an understanding of their specific
role in the overall system
Process
Mapping
SWOT Analysis

¨ a strategic planning method used to evaluate the

Strengths, Weaknesses, Opportunities, and Threats
involved in a project or in a business venture
¨ involves specifying the objective of the business
venture or project and identifying the internal and
external factors that are favorable and unfavorable
to achieve that objective
¨ A SWOT analysis must first start with defining a
desired end state or objective and may be
incorporated into the strategic planning model
SWOT Analysis

¨ Strengths - characteristics of the business or team that

give it an advantage over others in the industry.
¨ Weaknesses - characteristics that place the firm at a
disadvantage relative to others.
¨ Opportunities - external chances to make greater
sales or profits in the environment.
¨ Threats - external elements in the environment that
could cause trouble for the business.
An Illustration: The Procter & Gamble Company
Profile
TheProcter & Gamble Company (P&G) boasts boatloads of
brands. Theworld's #1 maker of household productscourts
market share and billion-dollar names.It's divided into three
global units: health and well being, beauty, and household
care. Thecompany also makespet food and water filters and
producesa soap opera. Sometwo-dozen of P&G's brands are
billion-dollar sellers, includingFusion,Always/Whisper, Braun,
Bounty,Charmin,Crest,Downy/Lenor,Gillette, Iams,Olay, Pampers,
Pantene, Pringles, Tide, and Wella, among others. P&G shed its
coffee brands in late 2008. Being the acquisitive type, with Clairol
andWellaasnotable conquests,P&G's biggest buy in company
history was Gillette in late 2005.
 Procter & Gamble SWOT Analysis:
STRENGTHS WEAKNESSESS
• New Management • Top Brands Losing Market Share
• Gross Margin 15 Times the Industry Average • Health and Beauty Women Only
• One of the best marketers in the world • Lagging behind in online media presence & leadership
•Diversified brand portfolio: more than 300 brands with more than •Missing opportunity: Refuses to manufacture private label products
79 billion in Revenue for its retail customers
• Tightly integrated with the largest retailers in the US and around • Slow Process Heavy Culture
the world • Weak brands (Duracell, Iam, Braun, Pringles)
• Product innovation • Views Product Performance only
• Talented management
• Distribute to 80 Countries
• Distribution channels all over the world
• New Billion Dollar brands

OPPORTUNITIES THREATS
• Health and Beauty for Men • Substitute brands that have a cheaper price
• Doubling Environmental Goals for 2012 • Private label growth
• Adding Value for the Conspiracy • Slowdown in consumer spending in the US & globally
• Utilizing online social networks •Key competitors expanding their product portfolios through
• Going Green/Eco Friendly acquisitions
• Capitalizing on online media • Increase in raw material price
•Continue to divest brands that don't align with the company's •Commodity cost and currency exchange rate placed tremendous
long-term goals (i.e., Folgers) pressure on the business
• Emerging markets
• New acquisition opportunities
• Selling directly to consumers
• Design for better product experience
The TOWSMatrix: A Modern Tool for
Analysis of the Situation
¨ The TOWS Matrix has been introduced for analyzing
the competitive situation of the company that leads to
the development of the fourdistinctsetsofstrategic
alternatives.
¨ The TOWS Matrix has a wider scope and a different
emphasis from the business portfolio matrix and SWOT
analysis.
¨ The TOWS Matrix is a conceptual framework for a
systematic analysis that facilitates matching of the
external threats and opportunities with the internal
weaknesses and strengths of the organization.
The TOWSMatrix: A Modern Tool for
Analysis of the Situation
Internal strengths (S) Internal weaknesses (W)
Internal e.g., strengths in management, e.g., weaknesses in areas shown
factors operations, finance, marketing, in the “strengths” box.
External research and development,
engineering.
factors

External opportunities (O) SO strategy: Maxi-Maxi WO strategy: Mini-Maxi

(consider risks also) e.g., current Potentially the most successful e.g., development strategy to
and future economic conditions; strategy, utilizing the overcome weaknesses in order to
political and social changes; new organization’s strengths to take take advantage of opportunities.
products, services, and advantage of opportunities.
technology.
External threats (T) ST strategy: Maxi-Mini WT strategy: Mini-Mini
e.g., energy shortage, Use of strengths to cope with e.g., retrenchment, liquidation, or
competition, and areas similar to threats or to avoid with threats. joint venture to minimize both
those shown in the weaknesses and threats.
“opportunities” box above.
Decision Making
¨ It is defined as the selection of a course of action
from among alternatives; it is at the core of planning.
¨ A plan cannot be said to existunlessa decision–a
commitment of resources, direction, or reputation–has
been made.
¨ Managers sometimeseedecisionmakingas their
central job because they must constantly choose what
isto be done, whoisto do it, and when,where,and
occasionally even how it will be done.
Managerial Functions and
the Organizational
Hierarchy
Four-step Decision Making Model

Step 1 Step 2
Identify the need for a Develop alternative
decision (for example: responses to choose from
based on vision, problem, (possible courses of
or opportunity actions)

Step 4 Step 3

Choose appropriate
Implement chosen
alternative
alternative
(based on situation)
Considerations in Making Decisions
1. Consider limiting factors - something that stand in the way of
accomplishing a desired objective.
The principle of the limiting factor states that by
recognizing and overcoming those factors that stand
critically in the way of a goal, the best alternative course
of action can be selected.

2. Inevaluation of alternatives, several methodologies and

applications and analysis may be applied. These include:
ü Advantages/ Disadvantages
ü Strengths/ Weaknesses
ü Cost-Benefit Analysis (C.B.A.)
ü Decision Trees
Considerations in Making Decisions
3. In choosing appropriate alternative, three approaches
may be used:
B a s e s for sel ect i ng f r o m a m o n g alternative c o u r s e s of act i on

Experimentation

H o w to select from
Reliance on the
among Choice made
past alternatives?

Research and
analysis
Decision Making under Certainty,
Uncertainty, and Risk
1. Certainty
Ø In a situation involving certainty, people are reasonably sure about what will
happen when they make a decision. The information is reliable and is considered
to be reliable, and the cause and effect relationships are known.
2. Uncertainty
Ø In a situation of uncertainty, people have only a meager database, they do not
know whether or not the data are reliable, and they very unsure about whether
or not the situation may change.
3. Risk
Ø In a situation with risks, factual information may exist, but it may be incomplete.
To improve decision making, one may estimate the objective probability of an
outcome (by using for example, mathematical models) and the subjective
probability (based on judgment and experience).
Contingency Planning
¨ Contingency plans set out in advance how
managers will respond to possible future events
that could
disrupt the organization‘s existing plans.
¨ Plans that managers hope will never need to
be implemented.
¨ One thing to consider isto monitor the potential
sourcesof crises. Crises– events that have a major
effect onthe ability of an organization‘s membersto
carry on their daily tasks – are the most intense type
of contingency (i.e. earthquake, flood, computer virus,
strikes).
Contingency Planning
To limit the impact of such a crisis, managers can:
1. Perform preventive work to avoid or minimize the
effect of crisis.
2. Prepare for a crisis by assembling information and
defining responsibilities and procedures that will
be helpful in a time of crisis.
3. Make a timely response to a crisis.

References : Management - A Global Perspective by Weihrich and Koontz 11th Edition

Management by Dyck and Neubert