ORGANIZATION

&
MANAGEMENT
Quarter 1 -Module 5
Planning

Jesilo O. Crisostomo
Compiler/Contextualizer
Organization and Management - Grade 11
Quarter 1 – Module 5: Planning

Republic Act 8293, section 176 states that: No copyright shall subsist in any work
of the Government of the Philippines. However, prior approval of the government agency or
office wherein the work is created shall be necessary for exploitation of such work for
profit. Such agency or office may, among other things, impose as a condition the payment
of royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from
their respective copyright owners. The publisher and authors do not represent nor claim
ownership over them.

Published by the Department of Education-CEBU CITY DIVISION

Region VII

Department of Education – School Division of Cebu City, Region VII

Office Address: New Imus Ave., Barangay Day-as Cebu City
Telephone No: (032) 253 2559
E-mail Address: [email protected]

I
 First Quarter, Week 5 - Module 5
Planning
Content Standard : The learners have an understanding on the importance of
planning concepts and business success.
Performance Standard : The learners shall be able to formulate effective plans for a
specific business endeavor.
Competency/Code : Discuss the nature of planning.
: Compare and contrast the different types of plans.
: Describe planning at different levels in the firm.
(ABM_AOM11-Ie-g-10) (ABM_AOM11-Ie-g-11)
(ABM_AOM11-Ie-g-12)

What I Know

Multiple Choice: Choose the letter of the correct answer and write it on a separate sheet
of paper.
1. It is an intellectual process of thinking resorted to decide a course of action
which helps achieve the pre-determined objectives of the organization in the
future.
a. Leading c. Organizing
b. Planning d. Staffing

2. It is the written document or blueprint for implementing and controlling an

organization’s marketing activities related to a strategy.
a. Marketing Plan c. Human Resource Plan
b. Financial Plan d. Production Plan

3. It is a written document that states the quantity of output a company must

produce in broad terms and by product family.
a. Marketing Plan c. Human Resource Plan
b. Financial Plan d. Production Plan

4. It is a document that summarizes the current financial situation of the firm,

analyzes financial needs and recommends a direction for financial activities.
a. Marketing Plan c. Human Resource Plan
b. Financial Plan d. Production Plan

1
 5. It is a document that indicates the manpower needs of a company in terms
of quantity and quality and based on the requirements of the company’s
strategic plan.
a. Marketing Plan c. Human Resource Plan
b. Financial Plan d. Production Plan

6. It is a set of procedures for changing or transforming broad strategic goals

and plans into specific that are applicable and needed in one unit/portion
of the organization.
a. Strategic Planning c. Operational Planning
b. Tactical Planning d. Organizational Planning

7. It is a lower-level management planning wherein it identifies specific

procedures and processes required at the lower levels of the organization.
a. Strategic Planning c. Operational Planning
b. Tactical Planning d. Organizational Planning

8. It is a top-level management planning wherein it defines the organization’s

goals/objectives.
a. Strategic Planning c. Operational Planning
b. Tactical Planning d. Organizational Planning

9. These are plans that are used again and again, and they focus on
managerial situation that recur repeatedly.
a. Standing Plan c. Program Plan
b. Budget Plan d. Single-Use Plan

10. These plans are specifically developed to implement courses of action that
are relatively unique and are unlikely to be repeated.
a. Standing Plan c. Program Plan
b. Budget Plan d. Single-Use Plan

What I Need to Know

This module will assist you in understanding the following lessons:

• The nature of planning
• Different types of plans
• Different planning levels in the firms

After going through this module, you are expected to be able to:
• Discuss the nature of planning
• Compare and contrast the different types of plans
• Describe planning at different levels in the firm.

2
 Planning is the first and foremost function of management. It is an intellectual
process of thinking resorted to decide a course of action which helps achieve the pre-
determined objectives of the organization in the future. It is also the fundamental
function of management and all other functions like leading, staffing, organizing, and
controlling must reflects planning function of management. It is most important for
higher level, but this function is performed by managers at their respective jobs.

What’s In

Have you ever heard of this famous quotation?

Image 1.
There is a meaning embedded in there: Planning is just an abstract act until you
execute the plan. It is in this line also that the greatest waste in this world is working
without plan. To plan effectively, we must first appreciate the fundamental nature of
planning. We need to understand the purpose, environment, and characteristics of the
process. Planning are complicated like recipes. There are lot of ingredients you need to
keep track and place in the right order.

3
ACTIVITY: Plan Your Day
Instruction: Below is an activity table wherein you need to input your daily activity.
Fill-out the table to guide you in accomplishing your daily goal. You may copy the
template on a separate sheet for your answers.

My goal for today is .

What To DO How to Do It When to Do It Who Will Do It

The activity above is a simple process that starts with careful consideration of
what you want to achieve and ends with a lot of hard work to do it. There are some very
well-defined steps that transcend the specifics of each goal. Knowing these steps will
allow you to formulate goals than you can accomplish.

What’s New

Activity: I Am SMART Enough

Instruction: Plan for a home project that you want to be accomplished. Use the
questions on the third column as your guide in accomplishing your goals.
S.M.A.R.T. GOAL

S Make it Specific What do you want to accomplish?

M Make it Measurable How will you know when you have accomplished
your goal?
A Make it Attainable How can the goal be accomplished?

R Make it Relevant Is the goal worth working hard to accomplished?

Explain.
T Make it Timely How long will it take you to complete your project?

4
 Goal setting is a powerful process of thinking that managers want to accomplish,
and these goals need to be SMART! SMART is an acronym and process for evaluating,
whether the goals you set, and the plans you put into motion for your business or
activities are complete. According to this device, business goals should always be
Specific, Measurable, Attainable/Achievable, Relevant/Realistic and Time- bound.

What Is It

Planning: Its Meaning, Nature, and Importance

There are many definitions for the term planning, each person has his own ideas
concerning the meaning of the term. Among the most common definitions for this term
are.

• Planning is the process by which an individual or organization decides in

advance on some future course of action. (Omran, 2002, p. 68)
• Planning is the process of determining how the organization can get where it
wants to go. (Certo, 2000, p. 126)
• Planning involves selecting from among alternative future courses of actions for
the organizations as a whole and for every department or section within it.
( Cook, Hunsaker, Coffey, 1999, p. 16)

The Nature of Planning

The essential nature of planning can be highlighted by the four major aspects of
planning:
1. Contribution to Purpose and Objectives
The purpose of every plan and all derivative plans is to facilitate the
accomplishment of enterprise purpose and objectives. This principle derives
from the nature of organized enterprise, which exists for the accomplishment of
group purpose through deliberate cooperation. This was emphasized by Koontz
when he said: “Plans alone cannot make an enterprise successful. Action is
required; the enterprise must operate. Plans can, however, focus on purposes. They
can forecast which actions will tend away, which will likely offset one another, and
which are merely irrelevant. Managerial planning seeks to achieve a consistent,
coordinated structure of operations focused on desired ends. Without plans, action
must become merely random activity, producing nothing but chaos.” (Koontz et al.,
1980, p.157)

5
2. Primacy of planning
Planning is the primary management function, the one that precedes is thebasis
for organizing, influencing, staffing, leading, and controlling functions of
managers. This can be shown in Figure 1.

What kind of
organization structure?

What kind of people we

need and when?
Plans objectives
and how to achieve
them
How most effectively to
lead and direct people

Furnishing standards of
control

Figure 1. Planning Precedes all other Managerial Functions

3. Pervasiveness of Planning
Planning is a function of all managers, although the character and breadth of
planning will vary with their authority and with the nature of policies and plans
outlined by their superiors. It is virtually impossible to circumscribe the area of
choice where they can exercise no discretion, and unless they have some
planning responsibility, it is doubtful that they are truly managers.

4. Efficiency of Plans
The efficiency of a plan is measured by the amount it contributes to the purpose
and objectives as offset by the costs and other unsought consequences required
to formulate and operate it. A plan can contribute to the attainment of objectives,
but at too high or unnecessarily high costs. This concept of efficiency implies
the normal ratio of inputs and outputs in terms of pounds, labor hours, or units
of production to include such value as individual and group satisfactions.

6
The Importance of Planning
Why Planning is important? Now, let us understand why planning is important
for Organization.

1. Increases efficiency – Planning makes optimum utilization of all available

resources. It helps to reduce the wastage of valuable resources. It aims to
give the highest returns at the lowest possible cost. Thus, it increases the
overall efficiency.
2. Reduce business-related risks – There are many risks involved in any
modern business. Planning helps to forecast these business-related risks and
take the necessary precautions to prepare for future uncertainties in advance.
Thus, it reduces business risks.
3. Facilitates proper coordination – Planning in all departments of an
organization are well coordinated with each other. Similarly, the short-term,
medium-term, and long-term plans of an organization are also coordinated
with each other. Such proper coordination is possible only because of
efficient planning.
4. Aids in Organizing – Organizing means to bring together all available
resources. Organizing is not possible without planning since planning tells
us the number of resources required and when are they needed. It means
that planning aids in organizing in an efficient way.
5. Gives the right direction - Direction means to give proper information,
accurate instructions, and useful guidance to the subordinates. Giving the
right direction is impossible without planning. Planning tells us what to do,
how to do it and when to do it.
6. Keeps good control – The actual performance of an employee is compared
with the plans and deviations. It is impossible to achieve such control
without the right planning. Therefore, planning becomes necessary to keep
good control.
7. Helps to achieve objectives – Every organization has certain objectives or
targets. It keeps working hard to fulfill these goals. Planning helps an
organization to achieve these aims, but with some ease and promptness.
Planning also helps an organization to avoid doing some random activities.
8. Motivates personnel – A god plan provides various financial and non-
financial incentives to both managers and employees. These incentives
motivate them to work hard and achieve the objectives of the organization.
Thus, planning through various incentives helps to motivate the personnel of
an organization.
9. Encourages creativity and innovation – Planning helps managers to
express their creativity and innovation. It brings satisfaction to the managers
and eventually a success to the organization.
10. Helps in decision-making – A manager makes different plans. Selecting or
choosing something means to take a decision. Decision-making is facilitated
by planning.

7
Planning function has four important goals:

• To offset uncertainty and change

• To focus attention on objectives
• To gain economical operation; and
• To facilitate control

Figure 2. Why Planning is needed?

Planning is important and that it contributes to the performance of other

management functions. Typically, the benefits and importance of planning has been
emphasized as shown in Figure 2. It describes the distribution of ties between choosing
the best decision-making process and the effectiveness of an organization to direct its
people and employee. Targeting organizational objectives motivates managers to
coordinate their decisions in order meet company’s’ goal.

8
Types of Plans
Plans are of different types. They may be classified in terms of functional areas,
time horizon, and frequency of use.

Figure 3. Types of Plans

9
1. Functional Area Plans. Plans may be prepared according to the needs of the
different functional areas. Among the types of functional area plans are the
following:
a) Marketing Plan – is a written document or blueprint for implementing and
controlling an organization’s marketing activities related to a strategy.
b) Production Plan – is a written document that states the quantity of output a
company must produce in broad terms and by product family.
c) Financial Plan – is a document that summarizes the current financial situation
of the firm, analyzes financial needs, and recommends a direction for financial
activities.
d) Human Resources Plan – is a document that indicates the human resource needs
of a company detailed in terms of quantity and quality and based on the
requirements of the company’s strategic plan.
2. Plans with Time Horizon. Plans with time horizon of the following:
a) Short-Range Plans – are plans intended to cover a period of less than one year.
First line supervisors are mostly concerned with these plans.
b) Long-Range Plans – are plans to cover a time span of more than one year. Middle
and top management mostly undertake these.
3. Plans with Varied Frequency of Use. According to frequency of use, plans may be
classified as:
a) Standing Plans. These are plans that are used again and again, and they focus on
managerial situation that recur repeatedly. Standing plans may be further
classified as follows:
i. Policies – refer to broad guidelines used by managers to help make decisions
and take actions on specific circumstances.
ii. Procedures – are plans that describe the exact series of actions to be taken
in each given situation.
iii. Rules – are statements that either require or forbid a certain action.
b) Single-Use Plans. These plans are specifically developed to implement courses of
action that are relatively unique and are unlikely to be repeated. Single-use plans
may be further classified as follows:
i. Budget Plan – sets forth the projected expenditures for a certain activity
and explains where the required funds will come from.
ii. Program Plan – is designed to coordinate a large set of activities.
iii. Project Plan – is usually more limited in scope than a program plan and is
sometimes prepared to support a program.
Planning at Different Levels in the Firm
Different level in the firm are all engaged in planning. The resulting plans must be
related to one another and directed toward the same goals. Bateman and Snell (2008)
stated that an effective strategy provides a basis for answering 5 broad questions about
how organizations will meet its goals/objectives.
Below are the five (5) broad questions of Bateman and Snell:

1) Where will we be active?

2) How will we get there?
3) How will we win in the marketplace?
4) How fast will we move and in what sequence will we make changes?
5) How will we obtain financial returns?

10
The Three Levels of Management
The three levels of management provide a separation between the managerial
positions of the organization. The administrative rank of an organization worker
determines the extent of authority, the status enjoyed, and the chain of command that
can be controlled by the worker.
1) Top-Level Management/Administrative level
• They coordinate services and are keen on planning.
• They control the management goals and policies and the ultimate source
of authority of the organization.
• They are accountable to the shareholders for the performance of the
organization.
• Top-level management is made up of the Board of Directors, the Chief
Executive Officer (CEO), the Chief Financial Officer (CFO), and the Chief
Operating Officer (COO) or the President and the Vice President.
2) Middle Level of Management
• They are subordinates of the top-level management and are responsible for
the organization and direction of the low-level management.
• They oversee the employment and training of the lower levels.
• They coordinate the responsibilities of the sub-unit of the firm and access
the efficiency of lower-level managers.
• Middle-level managers are semi-executives and are made up of the
departmental managers and branch manager. They could be divided into
senior and senior middle-level management if the organization is big.
3) Lower Level of Management
• They are the first line of managers as they feature at the base of the
operations.
• They are the intermediary and they solve issues amidst the workers and
are responsible for the maintenance of appropriate relationships within
the organization.
• They organize the essential machines, tools, and other materials required
by the employees to get their job done.
• Lower level managers are made up of the foreman, the line leader, the shift
leader, the section head, the head nurse, and supervisors.

Planning at Different Levels of Management

1) Strategic Planning – Top-level Management Planning
• Define the organization’s goals/objectives.
• Major targets related on the maintenance of the organization’s stability.
• Its organizational culture, values and growth improving its productivity,
profitability, effectiveness, and efficiency, among others.

11
 2) Tactical Planning – Middle Level Management Planning
• It is a set of procedures for changing or transforming broad strategic goals
and plans into specific that are applicable and needed in one unit/portion
of the organization.
• It is focused on major actions that must be done by a unit to contribute
its share for the achievement of the strategic plan.
3) Operational Planning – Frontline/Lower-Level Management Planning
• Identify specific procedures and processes required at the lower levels of
the organization.
• It also involves routine tasks or tasks repeatedly done by the organization
lower level units.

Integrating Strategic, Tactical, and Operational Planning

1. Developing Strategic Planning

• Managers in different hierarchical levels of organization may contribute their ideas

or suggestions in developing the strategic plan.
• A task originally assigned to the senior executives.
2. Strategy Formulation

• Frontline managers may make decisions that could influence strategy

formulation in the higher levels.
• All plans must be directed toward the achievement of the organization’s strategic
goals.
3. Communication Lines, Dissemination of Information and Awareness

• CEO’s or company presidents must see that all communication lines in their
organization are open, excellent dissemination of information to all levels, and
that they are aware of everything that is happening in the firm.

What’s More

ACTIVITY: Identifying the Three Levels of Management

Instruction: Below are the Functions of Management in different levels. Write Top-
Level Management, Middle Level Management or Lower Level Management if the
statement refers to that management functions. Use a separate sheet for your answers.
1. A management level wherein it lays down the policies and objectives of
the organization.

2. A management level that strategizes the plans of the enterprise and align
competent managers to the Department or middle level to carry them out.

12
 3. A management level that carries out the plans of the organization according
to policies and directives laid down by the top-level management

4. A management level that inspires or creates motivation for junior managers

to improve their efficiency.

5. A management level that organizes the division or departmental activities.

6. A management level that allocate tasks and responsibilities to the

operative employees.

7. A management level that ensures quality and is responsible for the

production quantity.

8. A management level that communicate the goals and objective of the firm
laid down by the higher level.

9. A management level that gives instructions and directions to workers on

their day to day jobs.

10. A management level that give periodic reports of the workers to the
higher-level managers.

What I Have Learned

Instruction: Complete the following statements in a separate sheet of paper.

In this module, I have learned that:

a. planning is

b. the different levels of management planning are , ,

c. planning is important because

d. the three levels of management are , ,

13
 What I Can Do

Activity 1: Applying Simple Planning

Instruction: Below is a Simple Process Flow Diagram showing Input-Process System-
Output-Outcome-Goals. By applying one of the management levels, place the word or
phrases from the text box to the appropriate column (simple process flow) to have a
smooth flow of business. A sample is given for you as your guide.

Skilled Customer Requirements Raw Materials

Motivated Capital Design of product and services

Happy employees Production of products Delivery of services

Products Services Financial Results

Delighted customers Customers’ needs met

14
ACTIVITY 2. The Planner

Instruction: Below is an actual process in one of the food processing plant in Cebu.
Being one of the front-line managers, plan the following words for you to achieve the
required customer output.

Packaging material Machine mixer Milk

Sugar Mixing time Egg

Flour Discharge time Water

Flour Additive Packaging Time Bake Test

Premixed flour Bread Profit and Satisfied

Customer

15
 Assessment

Multiple Choice: Choose the letter of the correct answer and write it on a separate
sheet of paper.
1 . It is a set of procedures for changing or transforming broad strategic goals
and plans into specific that are applicable and needed in one unit/portion
of the organization.
a. Strategic Planning c. Operational Planning
b. Tactical Planning d. Organizational Planning

2. These plans are specifically developed to implement courses of action that

are relatively unique and are unlikely to be repeated.
a. Standing Plan c. Program Plan
b. Budget Plan d. Single-Use Plan

3. It is a written document that states the quantity of output a company must

produce in broad terms and by product family.
a. Marketing Plan c. Human Resource Plan
b. Financial Plan d. Production Plan

4. It is a top-level management planning wherein it defines the organization’s

goals/objectives.
a. Strategic Planning c. Operational Planning
b. Tactical Planning d. Organizational Planning

5. These are plans that are used again and again, and they focus on
managerial situation that recur repeatedly.
a. Standing Plan c. Program Plan
b. Budget Plan d. Single-Use Plan

6 It is an intellectual process of thinking resorted to decide a course of action

which helps achieve the pre-determined objectives of the organization in the
future.
a. Leading c. Organizing
b. Planning d. Staffing

7. It is a lower-level management planning wherein it identifies specific

procedures and processes required at the lower levels of the organization.
a. Strategic Planning c. Operational Planning
b. Tactical Planning d. Organizational Planning

16
_8. It is a document that summarizes the current financial situation of the firm,
analyzes financial needs and recommends a direction for financial activities.
a. Marketing Plan c. Human Resource Plan
b. Financial Plan d. Production Plan

9. It is a document that indicates the manpower needs of a company in terms

of quantity and quality and based on the requirements of the company’s
strategic plan.
a. Marketing Plan c. Human Resource Plan
b. Financial Plan d. Production Plan

10. It is the written document or blueprint for implementing and controlling an

organization’s marketing activities related to a strategy.
a. Marketing Plan c. Human Resource Plan
b. Financial Plan d. Production Plan

11. refer to broad guidelines used by managers to help make decisions and
take actions on specific circumstances.
a. Policies c. Project
b. Procedures d. Rule

12. It is a plan that describe the exact series of actions to be taken in each
given situation.
a. Policies c. Project
b. Procedures d. Rule

13. It is a statement that either require or forbid a certain action.

a. Policies c. Project
b. Procedures d. Rule

14. It is a plan that intends to cover a period of less than one year.
a. Short-Range Plan c. Budget Plan
b. Long-Range Plan d. Limited Plan

15. It is a plan that intends to cover a time span of more than one year.
a. Short-Range Plan c. Budget Plan
b. Long-Range Plan d. Lay-way Plan

17
References:
Textbook:

(Roberto G. Medina, Business Organization and Management. Rex Bookstore. Chapter

6. Planning)

Online sources:

(idiotREET, (2012). Definition and nature of planning. August 20, 2020,

http://tpcbbapm.blogspot.com/2012/08/definition-nature-of-planning.html)
(Planning- Nature, Elements, Processes and Approach. August 20, 2020
https://bbamantra.com/planning-elements-process-approach)

(Narayana Rao, (2019). Nature and Purpose of Planning. August 21, 2020,
http://nraomtr.blogspot.com/2011/12/nature-and-purpose-of-planning-review.html)

(Basic Concept of Planning, August 21, 2020,

http://www.pathways.cu.edu.eg/subpages/downloads/Planning_Chapter_1.pdf)
(Baculi Thricia, (2018). Planning at Different Levels of the Firm. August 21, 2020,
https://prezi.com/p/f1llxol0vjk_/chapter-3-lesson-3-planning-at-different-levels-in-
the-firm/)
(Sonia Kukreja, Levels of Management. August 23, 2020,
https://www.managementstudyhq.com/levels-of-management-and-functions.html)
(SMART Planning. (2015), September 15, 2020, https://www.iclasspro.com/blog-
article/business-management/smart-planning-defining-better-goals-for-your-business)
(Gaurave Akrani, (2012). Importance of Planning, September 15, 2019,
https://kalyan-city.blogspot.com/2012/02/importance-of-planning-why-planning-
is.html)

Illustrations:

(Basic Concept of Planning, August 21, 2020,

http://www.pathways.cu.edu.eg/subpages/downloads/Planning_Chapter_1.pdf
(Roberto G. Medina, Business Organization and Management. Rex Bookstore. Page 82)

Image:
Image 1, https://www.brainyquote.com/quotes/margaret_thatcher_382871

18