Nature, Levels and

Types of Planning
In this lesson, you will be introduced to the concepts about planning the first management function.
Planning must be done ahead of time to avoid uncertainties in every activity where business
organizations are involved.

When it comes to external and internal forces of environment, planning is a must so as not to be
affected negatively or positively.
At the end of the lesson, you are expected to discuss the nature and levels of planning and types of
plans

Definition and Nature of Planning

Planning is the process of determining objectives and organizational goals, establishing strategies for
accomplishments those goals and developing, integrating coordinated activities in the organizations to
achieve those goals. It is also the crucial and essential part of management. Planning is important for
the following reasons:

Planning is important. It provides direction to all of the organization’s human resources; managers and
employees; and it reduces uncertainty and minimizes waste of time, effort and resources; and
establishing goals and standards during planning may be used for controlling, another managerial
function. Without planning, goals and standards will not be present and controlling will not be possible
since there will be no standard to compare or assess work effort with.

Difference between Goals and Plans

Goals are targets that management desires to reach; the desired results or objectives that members in
an organization are pursuing. Plans are best described as steps and actions that are required to
achieve goal.

Types of Plans

1. Organizational Plans can be generally described in terms of comprehensiveness, length of time

covered or time frame, specificity, and frequency of use. Comprehensiveness refers to the
completeness of planning coverage like plans that cover the entire organization is called strategic plans,
up to operational plans that apply to a particular operational area only. The more comprehensive the
plan is, the better. Plans can be short term which is good for one year or less, or may be long term which
is up to three years. Specificity refers to very detailed, clearly defined plans where objectives are clearly
stated and could easily be understood. Frequency of use refers to the number of times or instances a
plan may be used.

2. Strategic plans establish the organization’s overall goals and apply to the entire team; The CEO,
president or the general manager of the firm are the one responsible for the scope of this plan which is
broad in nature.

3. Operational plans are plans that apply only to a particular unit or area and narrow in scope.

4. Long-term plans are plans that go beyond three years.

5. Short term plans are plans that cover a year or less.

6. Directional plans are plans that are flexible or give general guidelines only.

7. Specific plans are plans that are clearly stated and which have no room for interpretation. Language
used must be simple and understandable.

8. Single-use plans are plans used or stated once only as they apply to the entire organizations. 9.
Standing plans are plans that are ongoing or to the identified activities of operational plans.

Steps in Planning

1. Setting an organization’s overarching mission and vision

2. Setting strategic goals and plans

3. Taking the strategic goals and plans and putting them into practice in everyday operations

4. Implementing and monitoring the goals and plans

Overview of the Planning Process

Steps in Planning Managerial Level of

Particular Relevance Time Frame/Duration

1. Set mission/vision Top Very long terms 5-10 years

2. Set strategic goals/plans Top/middle -5 years

3. Set operations goals/plans Middle/lower Annually/quarterly

4. Monitor Everyone Ongoing/monthly/quarterly/annually

Levels of Planning in the Firm

Different levels in the firm are:

1. Top-level Management Planning (Strategic Planning) starts with defining the organization’s
goals/objective, the major targets related to the maintenance of the organization’s stability, and its
organizational culture, values, and growth improving its productivity, profitability, effectiveness and
efficiency.
2. Middle-level Management Planning (Tactical Planning) refers to set of procedures for changing or
transforming broad strategic goals and plans into specific goals and plans that are applicable and needed
in one unit/portion of the organization.

3. Frontline/Lower-level Management Planning (Operational Planning) involves identifying the specific

procedures and processes required at the lower levels of the organization. It also involves routine tasks
or tasks repeatedly done by the organization’s lower-level units.

Learning Task 1: Do the following activities below in your notebook:

1. Set goals or targets for a student like you. List them down. 2
2. Look ahead. List possible future changes in your goals or targets that you made in number 1.
3. Learning Task 2: Perform the tasks below in your notebook.
4. 1. Choose one of the formal goals you have in the family. List down at least 3 operational plans
that will enable you and your family to achieve this chosen goal. 2
5. Describe how your family can effectively prepare the three operational plans listed in number 1.

Learning Task 3: Do the tasks below in your notebook.

1. Describe the present-day organizational planning. Is it rigid or flexible especially during this time of
pandemic?

2. Explain the relationship between planning and communication.

3. Assuming you are part of a successful company like PLDT, what changes would you recommend so
that every household would have their internet connections without any problem. To whom would you
address your recommendations? Why?

Learning Task 4: In your notebook, use colored pencil or ballpen to show, by using arrows, the
relationship among Strategic Planning, Tactical Planning and Operational Planning. Also, indicate, beside
each plan, the managers who are tasked to prepare the said plans.

Learning Task 5: In your notebook, state at least one long-term plan for a hotel service business with
corresponding tactical and operational plans to achieve them.

Learning Task 6: Match the item in Column 1 with the items in Column 2. Write the letters of your
answers in your notebook.

Column 1 Column 2

______1. cover 1 year or less A. Directional plans

______2. apply to a particular unit area only B. Standing plans

______3. refers to completeness of planning coverage C. Long-term plans

______4. clearly stated in understandable language D. Short-term plans

______5. states organization’s over-all goals E. Specific plans

______6. stated once only F. Strategic plans

______7. number of months or years covered G. Operational Plans

______8. gives general guidelines H. Single-use plans

______9. on-going plans I. Comprehensiveness

______10. go beyond 3 years J. Time frame

______11. focused on major actions K. Tactical Planning

______12. involves routine tasks L. Operational planning

______13. first management function M. Planning

21 PIVOT 4A CALABARZON Planning Techniques and Tools I PIVOT 4A CALABARZON WEEK 7

This lesson includes the appropriate planning techniques and tools and their application in business
decision-making and techniques that will help management achieved its goals in ever changing
environment.

At the end of the lesson, you are expected to apply appropriate planning techniques and tools in
business decision-making. For successful planning in today’s ever-changing environment, tool and
techniques are necessary to achieve one’s goal. In this connection, you will be studying the planning
techniques and tools and their application in making business decision like forecasting. Forecasting is
an attempt to predict what may happen in the future. It may be either quantitative or qualitative.
Opinions of prominent economists are used in qualitative forecasts while mathematical calculations and
statistical analyses of surveys/researches are in quantitative forecasts.

Making Forecasting more Effective

1. Use simple forecasting methods.

2. Compare each forecast with its corresponding “no change” forecast.

3. Do not rely on a single forecasting method.

4. Do not assume that the turning point in a trend can be accurately identified.

5. Shorten the time period covered by a forecast.

6. Remember that forecasting is a developed managerial skill that supports decision making.

Contingency Plans

Contingency plans must be prepared by managers, ready for implementation when things do not turn
out as they should be. Contingency factors (also known as trigger point) may offer alternative courses
of action when the unexpected happen or when things go wrong. It also indicates when the prepared
alternative plan should be implemented. Lesson

27 PIVOT 4A CALABARZO
 3. Matrix approach is a hybrid form of departmentalization where managers and staff personnel
report to the superiors, the functional manager, and the divisional manager.

C. Network Structure It is a collection of independent single function organizations/companies that

work together in order to produce a product or service. Each network companies are capable of doing
their own activities like selling, distributing, forwarding, collecting and work with other companies
effectively.

Span of Control refers to the number of people who report to the manager. Delegation is the assigning
of various degrees of decision-making authority to lower-level employees.

Advantages of Delegation

 Frees up managerial time for other important tasks

 Serves as a training and development tool for lower-level managers
 Increases subordinates’ commitment by giving them challenging assignments
 Belief that only you can do the job right Lack of confidence and trust in lower-level employees
 Low self-confidence
 Fear of being called lazy
 Vague job definition
 Fear of competition from those below
 Reluctance to take risks that depend on others
 Lack of early warning controls Sample Vertical Structure Top Manager Middle Manager
Specialist

28 PIVOT 4A CALABARZON

Learning Task 1: Answer the following in your notebook:

1. Define the following using your own words and give example: Organization
Organizing Organization chart Division of labor

2. What are the different types of organization structure and give example?

3. Illustrate sample of each type of business organization granting that you are a part of Management
Advisory Team providing services to different companies with regards to their company’s profile. 3.
Label your illustration and state who are responsible for each department or division.

4. Is division of labor necessary in every business organization structure? Why? Explain your answer.

5. Is organization structure important in every business organization? Why? E Sample Functional

Organization Vice President Operation Vice President Production Vice President Marketing Vice
President Finance PRESIDENT Sample Product Service Departmentalization General Manager Product X
Department Product Y Department Production Finance Marketing Production Finance Marketing

29 PIVOT 4A CALABARZON A PIVOT 4A CALABARZON

Learning Task 2: Identify if the following organizational structure design is Traditional (T) or Modern
(M). Write your answers in your notebook.
1. Design that groups together similar or related specialties.

2. Design with the departments, wide spans of control.

3. Focus on performance improvement of people.

4. Matrix design.

5. Boundaryless

6. It is made up of work teams.

7. Focus on flexibility and problem solving.

8. Big number of subordinates reporting to a centralized authority figure.

9. Design made up of separate units where parent corporation acts as overseer. 10. Design where
employees continuously work on project.

Learning Task 3: In your notebook, arrange the following delegation steps in chronological order.
Number the first step 1, and the last step 8.

_______a. Asking person assigned about his planned approaches

_______b. Making sure that the task objectives has been achieved

_______c. Defining the goal clearly

_______d. Selecting the person who will be given the task

_______e. Checking the task accomplishment progress

_______f. Assigning of responsibility

_______g. Granting to the assigned person the authority to act.

_______h. Giving the assigned person time and resources to do the task

Learning Task 4: In your notebook, identify the answers to each statement below.

1. ____________ is the process in which different individuals and work units perform different
tasks.

2. ____________ is another process in the organization’s internal environment which involves the
working together and coordination of its different work units.

3. ________ shows the different positions in the firm and its hierarchical arrangement for dividing
labor.

4. __________ refers to procedures that connect the work activities of the different work
divisions of the firm.

5. - 6. Structural mechanisms may be devised in order to increased _________ and __________.

7. _________ deal directly with the firm’s primary goods and services.
8. Divisional approach where departments are formed based on management of their products,
customers, or ___________ areas covered.

9. ___________ is a hybrid form of departmentalization.

10. They are said to have absolute authority of private business companies ___________.

30 PIVOT 4A CALABARZON References Manual Cabrera, Helena MA. F, PhD, et.al. (2016).
Organization and Manage-ment .Teacher’s Manual for Senior High School. Department of
Education.

Para sa mga katanungan o puna, sumulat o tumawag sa: Department of Education Region 4A
CALABARZON Office Address: Gate 2 Karangalan Village, Cainta Rizal Landline: 02-8682-5773 local
420/421 Email Address: [email protected]

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