CHAPTER2

MANAGERIAL
FRANTZ FANON
UNIVERSITY PLANNING

Lecturer: Zakeria Eid Ismail

 Objectives
At the end of this chapter, you should be able to
• Explain what planning is and its importance in
management
• Describe the different types and classifications of
plans
• List major steps in planning
• Discuss the nature of objective
• Discuss the skills and techniques of planning

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 INTRODUCTION
•Planning is the primary function of management.
•Planning is the fundamental management function,
which involves deciding beforehand.
•The chief function of management is to attain the
objectives of the enterprise. For this, it is to plan not
only in the beginning but throughout the operations.
•Planning involves deciding a best course of action
from among a number of alternatives which would
help the enterprise to achieve its objectives.

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 DEFINITION
Several of the definitions are:
• Planning is a process of defining a future course of
action or thinking about the activities required to
achieve the desired goal.
• Planning - is preparing today for tomorrow; it is the
activity that allows managers to determine what they
want and how to get it:
• Planning sets objectives and decide how to reach
them.
• Planning focuses on the future: what is to be
accomplished and how. 4
Cont...
• Planning is deciding in advance what to do, how to
do it, when to do it, and who is to do it.
Thus, it is clear from the various definitions given
above that planning involves two things.
• Determining the aims and objectives
• Selecting on the bases of past experience, present
facts and circumstances and future possibilities,
the best course of action to realize the planning
objective.

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Cont...
Planning answers six basic questions in regard to any
intended activity:
 What (the objective or objectives)?
 When (the time frame in which it will be accomplished)?
 Where (the place or places where the plans or planning will
reach its conclusion)?
 Who (which people will perform the tasks)?
 How (the specific steps or methods to reach the objectives)?
 What resources (resources necessary to reach the
objectives)? 6
 FEATURES OF PLANNING
 Focus on realizing the objectives set
 Intellectual process involving mental exercise
 Selective as it selects the best course of action
 Pervasive as all the levels of management plan
 Lays foundation of the successful actions of
management
 It is Continuous
 Efficiency is measured by what it contributes to the
objectives.
The Planning Function

Set goals and objectives

Develop Strategies
for Success

Develop
Action Plans
 Importance/purpose of planning

• To offset uncertainty: Future is always full of

uncertainties and charges which make planning a necessity
• To focus attention on objectives: Because, all planning
efforts are directed towards achieving enterprise objectives
• Planning helps in the process of decision making
• To gain economical operation: Planning minimizes costs
because of its emphasis on efficient operation and
consistency.
• To facilitate control: Planning and controlling are
inseparable, and commonly referred to as the Siamese
twins. This is because; unplanned action cannot be
controlled
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Setting Plan

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 Types of plans
• Planning can be classified in different ways in different
basis:-
A. Duration /Time dimension/
• Some plans are in effect for short periods, whereas others
stretch decades into the future.
• An important component of any plan is the planning
horizon: i.e., the length of time the plan specifies for
activities to be implemented / the time that elapses between
the formulation and the execution of a planned activity.
• Hence, there are three planning horizons that can be
identified for classifying plans.
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Cont...
I) Short range plans:- a plan for a year or less one
year. e.g. Annual plan of sales, revenue, production
material requirement, operating expenses budget.
ii) Intermediate range plans:- plan between a year
and five years. 1-5 years
• E.g. Development of new products, modernization
of facilities.
iii) Long range plans: - Plan for five or more years.
• e.g. Long term leases on production or ware house
facilities
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 B. Scope dimension
Strategic Plans:
• Is a process in which an organization's leaders define their
vision for the future and identify their organization's goals
and objectives.
• The process includes establishing the sequence in which those
goals should be realized so that the organization can reach its
stated vision.
• These plans are comprehensive (full, broad) in scope & reflect
long-term needs & direction of the organization.
• Strategic plans/top management plans include the development
of overall company objectives.
• They are primarily concerned with solving long-term problems
associated with external environmental influences.
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 Strategic Planning Process

1
Develop
7 A Vision 2
Develop Write Mission
Action Plans Statement

6 3
Set Goals Perform
And Objectives SWOT Analysis

5 4
Analyze Develop
Competition Forecasts
Vision versus Mission
Vision statement gives the company direction. It is the future of
the company, which then provides the purpose.
– What are our hopes and dreams?
– What problem are we solving for the greater good?
– Who and what are we inspiring to change?
Mission: - Every kind of organized operation has or at least
should have, if it is to be meaningful purposes or missions. what
it takes to reach those objectives.
e.g. The purpose of a business generally is the production &
distribution of goods and services.
Objectives/Goals:- The ends toward which activity is
Objectives are a desired future results and They represent not
only the end of planning but the end toward which organizing,15
Cont...

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Cont...

Toyota Motor Sales U.S.A. Inc.

• Vision Statement. “To be the most successful and
respected car company in America.”
• Mission Statement. “To attract and attain customers
with high-valued products and services and the most
satisfying ownership experience in America.”

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 Company Goals and Objectives

Boosts Motivation

Goals Objectives
Objectives
Guides Activity

Sets Standards
Broad,
Broad,Long-Range
Long-Range Specific,
Specific,Short-Range
Short-Range
Target
Targetor
orAim
Aim Target
Targetor
orAim
Aim

Clarifies Expectations
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Cont...
Tactical planning:
-Refers to the process of developing action plans through which
strategies are accomplished.
-managers in organizations are often involved in tactical planning.
-For example: Developing annual budget for each department,
division, Choosing specific means of implementing strategic plans
and Deciding on course of action for improving current operations.
Operational planning:
-is most specific and detail. It is made at the operational level and
is concerned with the day-to-day and week-to-week activities of
the organization.
-It is mainly short-range and more specific and detail.
-For example: Production schedule, sales plans, and lesson plans.19
Cont...
One-Three Tactical Plans Middle
Years Managers

Management
Time Frame

Less Than First-Line

a Year Operational Plans Managers
 3. Repetitiveness
(i) Single use plans:
Are plans that are used once, and then discarded.
This type of plans is designed to meet the needs of a unique or
single situation; such as for special project or task. They are
also called one-time plans.
1- Program (project)- Programs are a complex of goals, 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; they are ordinarily supported by budgets.
2- Budget- is statements of expected results or resources set aside
for specific activities expressed in numerical or quantitative
terms.
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Cont...
(ii) Standing plans: -
are used to guide activities that occur over a period of
time. These are plans that are designed to be used
again and again. Standing plans exist in the form of
a) Policies- are general statements or understandings
which guide or channel thinking in decision making.
b) Procedures/ Standard operating procedures- are
plans that describe a series of action to be taken in a
given situation.
c) Rules & Regulations- are plans that describe exactly
how one particular situation is to be handled. 22
 Planning Process
1. Identifying and defining the real problem
2. Establish clear-cut objectives
3. Establishing the planning Premise
4. Identify Alternative Courses of Action
5. Evaluating Alternative Courses
6. Selecting a course of action /best Alternative
7. Formulating Derivative Plans
8. Numberzing Plans by Budgeting
9. Implementing the plan
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SWOT ANALYSIS

Strengths Weaknesses

SWOT
SWOT
Analysis
Analysis

Opportunities Threats
 SWOT ANALYSIS
 SWOT (strengths, weaknesses, opportunities, and threats)
analysis is a method for identifying and analyzing internal
strengths and weaknesses and external opportunities and
threats that shape current and future operations and help
develop strategic goals.
 SWOT analyses are not limited to companies.
 Individuals can also use SWOT analysis to engage in
constructive introspection and form personal improvement
goals.
 A weakness can be converted into strength by
recognizing it and by making an effort in that direction.
 Opportunities and threats also need to be recognized.
 Importance of SWOT analysis

It analyses whether the business is healthy or sick.

An organization comes to know about the internal
and external factors that affect its success or failure.
It helps in the formation of a strategy so as to make
preparations for the possible threats from the
competitors.
It helps to evaluate a business environment in a
detailed manner so as to take strategic decisions for
the future course of action.
 Objectives
• The setting of organizational objectives begins with the
definition of mission.
• A mission is the organization's reason for existence.
• It describes the organization's values, aspirations and
reason for being.
• A well-defined mission is the basis for development of all
subsequent objectives and plans.
• Once the organization's mission is articulated managers
can begin developing specific mission related objectives
at every managerial level to reflect the responsibilities
applicable to each.
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 What is an Objective?
• An objective is an end result upon which the
existence of an organization depends.
• It is the desired outcome organizations hope to
attain eventually.
• An objective provides a standard for the
measurement of success.
• An objective helps determine technologies required
and set the basis for specialization of effort,
authority pattern, communication and decision net-
works and other structural relationships. 28
 Classification of Objectives

A. Hierarchy of Objectives
Strategic Objectives;
• Strategic objectives are broad statements describing
where the organization wants to be in the future.
• They pertain to the organization as a whole rather than a
specific department or division.
• They focus on such issues as profitability, market
positioning and managerial performance and attitude and
public responsibility.
• Example: to achieve a 10% net profit, To improve market
share 15-20% over next three years and 29
Cont....

Tactical Objectives;
• Tactical objectives are set by the middle
management level.
• These objectives define the outcomes that major
departments and divisions must achieve in order
for the organization to reach overall objectives.
• Example, a company may have a tactical objective
of "communicating in writing with clients and
customers via, newsletter once a month."

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Cont....

Operational Objectives
• Operational objectives are specified and
measurable results expected from departments,
first-level managers, work groups and individuals
within an organization.
• Examples: Setting daily, weekly and monthly sales
targets for each product category, Process 200
sales applications each week, Reduce overtime by
10% next month.

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 B. Time Frame Objectives

 Long-term Objectives These objectives extend up

to 5 years. They must be accomplished to ensure the
long-term survival of the organization.
 Intermediate Objectives These objectives cover a
time period between the short-term objectives and
long-term objectives- probably 1-3 years.
 Short-term Objectives These objectives can be
accomplished in less than a year.

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 Characteristics of Objectives

Specific and Measurable; Not all objectives can be expressed in

numeric terms, but they should be quantified when possible.
Challenging but Realistic; Objectives should be challenging but
not unreasonably difficult, i, e, objectives should be challenging but
attainable, given the resources and skills available.
Cover Key Result Areas; Objectives cannot be set for every aspect
of employee behavior or organizational performance; if they were,
their sheer number would render them meaningless.
Defined Time Period; Objectives should specify the time period
over which they will be achieved. A time period is a deadline
specifying the date on which objective attainment will be measured.
Linked to Reward; The ultimate impact of objectives depends on
the extent to which salary increases, promotions and awards are on
objective achievement.. 33
 Conflicts among Objectives

The process of setting objectives must incorporate and integrate

the interest of the forces in the internal and external
environment Some of the most common objective setting trade-
offs faced by managers in business organizations are:
• Short - term profits versus long - term growth.
• Profit margin versus competitive position.
• Direct sales effort versus development effort.
• Achieving long-term growth through related businesses
versus achieving it through unrelated businesses.
• Profit objectives versus nonprofit objectives (that is, social
responsibilities).
• Growth versus stability.
• Low-risk environment versus high-risk environment. 34
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 Priority of Objectives

• The phrase priority of objectives implies that at a given

time, accomplishing one objective is more important
than accomplishing others.
• Managers always face alternative objectives that must
be evaluated and ranked and they must establish
priorities if they want to allocate resources in a rational
way.
• For example, a university president must determine the
relative importance of teaching, research and service.
• Because determining objective and priorities is a
judgmental decision, it is difficult process.
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Priority of Objectives

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 Measurement of Objectives

•Objectives must be understandable and acceptable

to those who will help to achieve them.
•In fact, many people believe that specific,
measurable objectives, increase the performance of
both employees and organizations and that difficult
objectives, if accepted by employees, result in better
performance than do easier objectives.

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Cont....

Management expert Peter Drucker has stated that objectives

should be established in at least eight areas of organizational
performance:
1. Market Standing,
2. Innovations,
3. Productivity,
4. Physical and Financial Resources,
5. Profitability,
6. Manager Performance and Responsibility,
7. Worker Performance and Attitude, And
8. Social Responsibility 39
 Planning Skills and Techniques

Skills required in planning are

(I) Forecasting
(ii) Decision Making

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 Forecasting
• Is the attempt to predict outcomes and future
trends that can serve as basis for planning, by
inferences from known facts.
• By relating the past and the present information or
data, management should be able to anticipate the
future environment.
• In developing premises, the kind of markets, volume
of sales, prices, products, technical developments,
costs, tax rates, policies, policies related to dividends,
the social and political environment, long-term
trends, etc of the future should be predicted with the
help of forecasting. 41
 Forecasting Techniques

Qualitative Quantitative
Forecasting Forecasting

Intuitive Consumer Historical Statistical

Judgments Research Data Computations

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 Forecasting Techniques

Qualitative Forecasting:
it is a judgment-based forecasting technique used
when hard data are scarce or difficult to use.
It is appropriate when hard data are scarce or
difficult to use.
It thus involves the use of subjective judgments
and rating schemes to transform qualitative
information into quantitative estimates.
Example includes the jury of executive opinion,
market research and the survey of expert opinion.
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Cont....

Quantitative Forecasting:
It is a technique used when enough hard data exist to
specify relationships between variables.
It is used when there is sufficient "hard" or
statistical data to specify relationships between key
variables.
Extrapolation forecasting, such as time-series
analysis, uses past or current trends to project future
events.

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 Try it by your self
• Define planning
• What is importance of planning
• List and summarize types of planning
• Discuss SWOT analysis
• What are techniques of forecasting
• What is an Objective
• What are skill required in planning

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THE END