Planning Role, Need for Planning, Types of Planning , Levels of Planning , Corporate Planning & Long Range Planning

Introduction
Planning is essential in every walk of our life. Whether

an individual is engaged in business or not ,frames a number of plan s during his life. Planning is the first and foremost function of management . Planning function precedes all other managerial functions. Effective planning facilitates early achievements of objectives, and it depends upon efficiency of the planner. A planner is the person who frames a plan to put his scheme into practice.
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What is Planning ?
Planning means looking ahead or thinking before acting,

i.e., Anticipating problems and Developing their solution.

Planning is deciding in advance what is to be done, when

and where it is to be done, how it is to be done and by whom. Planning bridges the gap from where we are and

where we want to go.

Planning 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.

Planning involves defining the organizations goals, establishing an overall strategy, and developing a comprehensive set of plans to integrate and coordinate organizational work .
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 Planning includes determination of the objectives, policies,

rules, programmes, strategies, budgets and procedures. The task of planning is to minimize the risk and full utilization of the available opportunities.
Good planning must be flexible and capable of adjustment to

the changing circumstances.

Planning can be for the entire enterprise as a whole and also

for each department of the enterprise.

Planning can be short-term as well as long-term. It is an essential preliminary to every effective action.
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Definitions
Planning is defined as the relevant information from

the past and the present and the assignment of the probable future development so that a course of action may be determined to enable the organization to meet its objectives. -Henry Sick Planning means to assess the future and make provision for it. -Fayol
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Identification
What is to be done

Right Time
When it is to be done

Planning is looking Ahead Right Place

Where it is to be done

Right Methods
How it is to be done

The Key Terms of Planning

Vision: Nonspecific directional and motivational
guidance for the entire organization. Usually top managers frames a vision for every business.

Mission: An organization's reason for being. It is

concerned with scope of the business and what distinguishes this business from similar businesses. Mission reflects the culture and values of top management.

The Key Terms of Planning

Objectives: Objectives refine the mission and address
key issues within the organization such as market standing, innovation, productivity, physical and financial resources, profitability, management and worker performance and efficiency. Objectives are needed to be general, observable, challenging, and untimed.

Goals: Goals are specific statements of anticipated

results that further define the organization's objectives.
Goals should be

SMART: Specific, Measurable, Attainable, Rewarding, and Timed.

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Why Do Managers Plan?

Planning is the primary management

function ,establishes the basis for all other management functions Planning establishes coordinated effort Planning reduces uncertainty Planning reduces overlapping and wasteful activities Planning establishes goals and standards used in controlling
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Need for Planning

To focus attention on objectives
Making control effective Preparing for future uncertainty and change Improving motivation and employee morale Operations in securing economy

Securing coherent and consistent decisions

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Characteristics of a Good Plan

Clearly defined objectives Simple Proper analysis and classification of actions to establish standards Plan must be Flexible and Dynamic Balanced practicable and suitable according to the size and form of the business Maximum utilization of available resources. Comprehensive and should include each and every aspect of the objectives
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Nature of Planning
Involves Rational Approach It is a Process It is an Open System Approach Planning is Future Oriented Involves Choice from among

alternatives Planning occurs at all levels of management It is flexible Pervasive & Continuous
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The Planning Process

Perceive the Problem at Hand Establish what do you want to achieve about it Establish the planning premises Find out what all can be done to achieve your aim Evaluate the various choices you have Choose one appropriate plan and keep alternative plans ready Work out the finer points of the selected plan Establish which activities need to be done and arrange them in a proper sequence Implement the plan
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Types of Planning
Business Plans are categories into four types On the Basis of Nature : Formal & Informal On the Basis of Time : Short term & Longterm On the Basis of Levels of Management : Toplevel, Middle Level and Lower Level On the Basis of Use : Standing Plans, Singleuse Plans
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Formal and Informal Planning

Formal Planning - Written

Defines Specific Goals Specific Action Programs exist to achieve goals When the number of action is large, it facilitates adequate control and pinpoint the weaknesses

Informal Planning - Nothing is written down, but it

is conceived in the mind of the manager Little or No Sharing of Goals General and Lack in Continuity Informal Planning may be adopted if the number of actions to be taken is less and the actions have to be taken in a short period.
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Short and Long-Range Planning

This difference is based on the period which is kept in view

while formulating a plan. Both the plans are complementary and not competitive to each other. Short-term planning is considered as tactical planning and long-term planning is taken as strategic planning.

Long-Term Plans - Time frame beyond three years Definition of long term has changed with increasingly uncertain organizational environments Short-Term Plans - Cover one year or less
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Single Use and Standing Planning

Single-use Plans/ Specific Plans - One-time plans specifically designed to meet the needs of a unique situation. This plan is prepared by lowerlevel management.

Standing Plans/Routine Plans - Standing plans are of a permanent nature and are meant for repeated use .Ongoing plans that provide guidance for activities performed repeatedly. These plans are prepared by top- level management include policies, procedures, and rules
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Corporate Planning & Long range Planning

Corporate planning and long-range planning is the

process of determining the major objectives , policies and strategies that governs the acquisition, use and disposition of resources to achieve organizational objectives . It is done by the top level managers of the organization. It provides the answer to the basic questions like Where are we now? Where we want to go? Why do we want to go? How we will go? etc.
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Features of Corporate Planning

Systematic: Corporate planning is a systematic way of setting

the long-term goals of a company and deciding the means to achieve them taking internal as well as external factors into account.
Continuous: Corporate planning is a continuous, on-going

process. Corporate plans move in tune with internal as well as external changes. They are subject to revision and updating from time to time.
Company wide plan: Corporate plan is a kind of master

plan covering the company as a whole. All functional plans are offshoots of the corporate plan.
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Features of Corporate Planning

Long-term View: Corporate planning takes a long-term

view of business and does not deal with day-to-day operations. Top Level Activity: Establishing long-term corporate goals and the means of achieving these, is a top management responsibility. Forward Looking: Corporate planning tries to put the company ahead of its rivals through a careful evaluation of all relevant internal as well as external factors having a bearing on overall performance. Forward looking is to match a companys internal strengths with external opportunities and utilize the corporate resources in the best possible way.
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Features of Corporate Planning

Comprehensive: Corporate planning covers both

strategic planning and operational planning. Strategic planning is designed to help companies achieve competitive advantage by trying to exploit external opportunities through unique internal capabilities.
Operational plans such as production plan, marketing

plan, and finance plan are designed to implement strategic plans.

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 Strategic

Plans - Apply to the entire organization establish organizations overall goals seek to position the organization in terms of its environment Operational Plans - Specify the details of how the overall goals are to be achieved tend to cover short time periods
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Corporate Planning Vs. Long-range Planning

Corporate planning is the comprehensive planning of

business operations for effective implementation of corporate policies and attainment of corporate goals.
It

involves preparation of strategic plans and determination of objectives to be pursued in the long run as well as short-run. It commits resources for a future period that can be clearly looked into.

It has nothing to do with the range.

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Corporate Planning Vs. Long-range Planning

Long-range planning is a part of corporate

planning. It is a plan that covers many years and affects many departments or divisions of an organization in a major way. It is concerned with the preparation of realistic estimates for distant future. It indicates the extent of future time horizon which is fairly long in nature and which can be meaningfully expressed in the form of tentative goals by management.

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Corporate Planning Vs. Long-range Planning

The time horizon of a long-term plan is usually

dependent on the nature of industry in which it is pressed into service. Long range planning is basically concerned with the economic, financial and technological aspects of the environment with special reference to the problems of corporate growth.

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Planning in the Hierarchy of Organizations

Strategic Planning Top Executives

Middle-Level Managers

Operational Planning

First-Level Managers

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Types of Plans

Specific Plans - Clearly defined with little room for interpretation required clarity and predictability often do not exist Directional Plans - Flexible plans that set out general guidelines provide focus without limiting courses of action

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Types of Plans
Breadth Time Frame Specificity Frequency of Use Strategic Long term Operational Short term Directional Single use Standing Specific

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Specific Versus Directional Plans

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What do Managers Plan For?

Top Managements Objective
We need to improve the companys performance

Division Managers Objective

I want to see a significant improvement in this divisions profits

Department Managers Objective

Increase profits, regardless of the means

Individual Employees Objective

Dont worry about quality: just work fast

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The End

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