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Selecting the best course of action in anticipation of future trends so that the desired result may be
achieved.
It must be stressed that the desired result takes first priority and the course of action chosen is the means
to realize the goal.
The process of determining objectives and selecting a future course of action to accomplish them.
It is considered as the most basic of all managerial functions.
PROVIDES SPECIFIC ANSWER TO SIX BASIC QUESTIONS IN REGARD TO ANY INTENDED
ACTIVITY:
o WHAT identifies the specific goals to be accomplished.
o WHEN answers questions of timing; each long-term goal may have a series of short-term
objectives that must be achieved before the long-term goal can be reached.
o WHERE concerns the place or places where the plan will be executed.
o WHO identifies the specific people who will perform specific tasks essential to plans
implementation.
o HOW involves specific actions to be taken to reach the goals.
o HOW MUCH is concerned with the expenditure of resources needed to reach the goals- both
short and long term.
WHEN PLANNING, MANAGERS SHOULD POSSESS THESE RESPONSIBILITIES:
o Construct, review and rewrite their organizations mission.
o Identify and analyze their opportunities.
o Establish the goals they wish to achieve.
o Identify, analyze and select the course/courses of action required to reach their goals.
o Determine the resources they will need to achieve their goals.
MAJOR ASPECTS OF PLANNING
o Contribution to purpose and objectives.
o Planning as the basic function.
o Planning is a major function of all managers.
WHY MANAGERS RESIST PLANNING?
o Managers have many functions.
o Managers prefer to act on many problems by providing instant feedback.
o Good planning is hardwork.
o Plan can be used to measure results.
o Planning often involves serious thinking and extensive paperwork.
o Planning takes time.
IMPORTANCE OF PLANNING
o It sets the stage for resource acquisition and the focus of energy for the entire organization. It
provides DIRECTION and a common sense of PURPOSE for the organization.
o Generate goals and sets the foundation for organizing of resources and activities to achieve the
goals.
o Organizations ability to adjust. Planning increases the possibility of survival in business by
minimizing the risks inherent in the future.
o Unified framework of plans. The result of the planning process should provide for a unified for
the accomplishment of the organizations purpose. Plans for each level from top to bottom should
fit into each other.
o Planning reduces Overlapping and wasteful activities.
Strategic
Strategic
Strategic as a Strategic
Top
Top Management
Management (Organization
(Organization
as a whole)
whole)
Goals
Plans
Goals
Plans
Tactical
Tactical
Middle
Division
functions)
Middle Management
Management (Major
(MajorTactical
Division and
and Tactical
functions)
Goals
Plans
Goals
Plans
Operationa
Operationa
Operationa
Operationa
Lower
Individuals)
Lower Management
Management (Department,
(Department,
Individuals)
l Goals
l Plans
l Goals
l Plans
Accrd to
NATURE AND SCOPE
I.
Strategic Plans
contain the answers to who, what, when, where how and how much for achieving strategic goals---longterm, companywide goals established by top management.
concerned with the entire organizations direction and purpose---how it intense to grow, compete and
meet its customers needsover the next few years
II.
Tactical Plans
develop by middle managers, this plan are more detailed, have shorter time frames, and narrower scopes
than a strategic plan; are accomplished within 1 year or less.
Concerned with:
1. What each of the major organizational
subsystems must do?
2. How they must do it?
3. When things must be done?
4. Where activities will be performed?
5. What resources are to be utilized?
6. Who will have the authority needed to perform each task?
Tactical Objectives
Short-term goals set by middle managers that must be achieved in order to reach top managements
strategic goals and the short- and long-term goals of middle managers.
Functional Area Plans
1. Marketing Plan
- considered as game plan or master plan of the company.
2. Production Plan
-plans the schedule of production activities with the aim of achieving production efficiency.
3. Financial Plan
- states the acquisition and use of financial resources
4. Human resource management Plan
-indicates human resource needs
III.
Operational Plans
the first-line managers tool for executing daily, weekly, and monthly activities
Operational Objectives
The specific results expected from first-level managers, work groups and individuals.
Key Differences
Strategic Plan
Tactical Plan
Operational Plan
Impact
Have
the
potential
to
dramatically
impact
both
positively and negatively the
fortunes and survival of the
organization
Interdependence
Moderate
interdependence;
must take into account the
resources and capabilities of
several units within a business
Time Horizon
Scope
Narrowest;
usually
centered on departments or
smaller units of the
organization
Complexity
Standing Plan
It is used again and again; specifies how to handle continuing or recurring activities such as hiring,
granting credit and maintaining equipment.
Types:
a. Policy - A broad guide for organizational members to follow them dealing with important and
recurring areas of decision making. They set limits and boundaries for decision makers.
b. Procedure-
c. Rule An ongoing, specific guide for human behavior and conduct at work. Rules are usually
do or do not statements established to promote employee safety, ensure the uniform treatment of
employees, and regulate civil behavior.
II. Single Plans
It is developed to achieve specific purposes and to be dissolved when these have been accomplished.
Types:
a. Budget
a. formal quantitative statements of the resources allocated to specific programs or projects for a given
period.
b. use for predicting sources and amounts of income and how it is to be used.
c. aims to control the use of financial resources
b. Program
a. major undertaking that may take several years to complete
b. refer to larger activity units
c. typically involve several different departments or units of the organization
d. are composed of several different projects
c. Projects
a. smaller in scope and complexity than a program with a shorter time horizon.
b. often part of a larger program
Summary of Standing and Single Plans
Type
Definition
Standing Plans
1.
Policy
2.
Procedure
3. Rule
Single-use Plans
1.
Budget
2.
Programs
3. Projects
A plan that deals with the future allocations and utilizations of various
resources to different activities over a given time.
A plan typically intended to accomplish a specific objective within a fixed
time.
A subset or component part of a specific program.
Short range- plans covering the span of less than one year.
Long range- plans covering a span of more than one year.
Strategic Management
- Art and science of formulating, implementing, and evaluating, cross-functional decisions that enable an
organization to achieve its objectives
Stages of Strategic Management
- The strategic management process attempts to organize quantitative and qualitative information under conditions
of uncertainty
1. Formulating
Developing a vision and mission statement, Identifying an organizations external opportunities and
threats
Determining internal strengths and weaknesses,
Establishing long-term objectives,
Generating alternative strategies
Choosing strategies to pursue.
2. Implementation
Establish annual objectives, devise policies, motivate employees, and allocate resources so formulated
strategies can be executed.
3. Evaluation
Final stage, includes 3 fundamental activities
i. Reviewing external and internal factors as bases for current strategies
ii. Measuring performance
iii. Taking corrective actions
A Comprehensive Strategic Management Model
Strategic Planning
- An organizations process of defining its strategy, or direction, and making decisions on allocating its resources to
pursue this strategy.
- The big picture of what your company is doing and where it is going
- Helps determine where your organization is going over the next year or more.
- Why is this important?
o Takes you outside the day-to-day activities of your organization or project and helps give you clarity
about what you actually want to achieve and how to go about achieving it rather than a plan of action for
day-to-day operations.
Strategic Planning Models
Goals-Based
Works with the agency vision, mission, and the agency goals to work toward achieving the mission
Issues-Based
Starts with examining issues that the organization is facing
Organic
Focus is primarily on vision and values
Scenario
- What could possibly happen in the future
Components of a Strategic Plan
Vision Developing a clear understanding of what is your preferred future
Mission Developing a sound statement about why you exist
Core Values and Beliefs Describes behaviors and ideas that are important to your organization
Strategic Issues
The issues that create a gap between the ideal and reality
Operational Plans
How are you going to achieve your vision?
Step 1 In the here and now List all strengths that exist now. Then in turn, list all weaknesses
that exist now. Be realistic but avoid modesty!
Step 2 What might be List all opportunities that exist in the future. Opportunities are
potential future strengths. Then in turn, list all threats that exist in the future. Threats are
potential future weaknesses.
Step 3 Plan of action Review your SWOT matrix with a view to creating an action plan to
address each of the four areas.
Step 4 Develop Operational Plans, Monitor Actions, Evaluate Progress, and Revise the Plan!
Other Steps in Strategic Plan
Create a Vision
Define core beliefs and values of your agency
Identify your agencys mission
Identify critical strategic issues
Sometimes referred to as barriers
Develop goals and detailed action plans for each strategic issue
How can you maximize the forces in favor and minimize forces against?
Monitor Action Plans your agency has developed in response to the critical issues
Evaluate progress of
achieving the outcomes
Revise the plan as necessary
Tools and Approaches
SWOT analysis, which addresses internal strengths and weaknesses relative to the external opportunities
and threats;
PEST analysis, which covers the remote external environment elements such as political, economic,
social and technological (PESTLE adds legal/regulatory and ecological/environmental);
Scenario planning, which was originally used in the military and recently used by large corporations to
analyze future scenarios;
Porter five forces analysis, which addresses industry attractiveness and rivalry through the bargaining
power of buyers and suppliers and the threat of substitute products and new market entrants;
Growth-share matrix, which involves portfolio decisions about which businesses to retain or divest; and
Balanced Scorecards and strategy maps, which creates a systematic framework for measuring and
controlling strategy.
The Nine Steps to Success - The Balanced Scorecard Institute's framework for Strategic Planning and
Management.
Planning Process
1. Analyzing the environment
An organizations success is influenced by its external environment, the major forces outside the
organization that have the potential of significantly impacting on the likely success of products or
services.
Type of External Environment:
Legal-political environment
Socio-cultural element
International environment
organization interfaces in the courses of
Suppliers
Labor supply
2. Setting Objectives
This second element in the planning process which is setting objectives or desired outcomes for the
entire organization, a specific unit, or even an individual.
Strategic Goals - broadly defined targets or future end results set by the top management.
Tactical Goals - are targets or future end results usually set by the middles management for specific
departments or units. They are stated in more measurable terms.
3 Operational Goals - are targets or future end results set by lower management that address specific,
measurable outcomes required from lower levels.
Components of Goals
Goal Content/Characteristics
Realistic state what results can realistically be achieved, given available resources.
Attainable- An achievable goal will usually answer the question How? How can the goal be
accomplished? How realistic is the goal based on other constraints?
Goal Commitment
Supervisory authority
Expectation of Success
Public Display
Participation
Work Behavior
Four work behavior factors:
Direction- instructions
Persistence
Effort
Planning
3. Determining Requirements
Usually addresses the question, what will it take to get from here to there? the
there is what you to become while the here requires an assessment or knowledge
of where the organization is today.
4. Assessing Resources
this assessment of the required resources and the resources available to the organization
or manager.
Questions that managers must ask when assessing:
Do we have needed human talent to meet the requirement?
Even if we have the needed talent, are they available? Can we take people of what they
are currently working on in order to put them on this new project?
If we dont have necessary talent, can we develop or acquire it within the needed time
frame?
Do we have the financial resources available? Can we get additional funding from the
debt or equity markets?
Do we have the required technology or can we gain access to it at a cost-effective price?
Action Plan - are essentially the marching orders that everyone uses to accomplish the
established tasks.
6. Implementing Plans
plans often fail in the implementation stage because of inadequate assessment of
resources both those required and available "What happens when we do?"
Implementation is the stage where all the planned activities are put into action.
time adjustment
The participation and cooperation of subordinates is necessary for successful implementation
of plans. Established plans should be reviewed periodically so as to modify and change them
whenever necessary.
7. Monitor Outcomes
Monitoring is important to ensure that the project is implemented as per the schedule.
It is necessary to know:
Have the assumptions on which the plan was based proved to be correct?
Decision making
the study of identifying and choosing alternatives based on the values and preferences of
the decision maker. Decision-making is one of the central activities of management and is
a huge part of any process of implementation.
can be regarded as the cognitive process resulting in the selection of a belief or a course
of action among several alternative possibilities. Every decision-making process produces
a final choice that may or may not prompt action.
Using a step-by-step decision-making process helps us to make more deliberate,
thoughtful decisions by organizing relevant information and defining alternatives. This
approach enables us to better insure the chances of choosing the most satisfied alternative
possible.
small a scope, or missing a key dimension. Decision makers must then step back
and reconsider the information and analysis they have brought to bear so far. We
can regard this activity as problem seeking because decision makers must return
to the starting point and respecify the issue or problem they want to address.
4. Develop options
- Generate several possible options.
- Be creative and positive.
- Ask what if questions.
- How would you like your situation to be?
5. Evaluate alternatives
- Which alternative will best achieve your objectives?
6. Select a preferred alternative
- Explore the provisional preferred alternative for future possible adverse consequences.
- What problems might it create?
7. Act on the decision
- Put a plan in place to implement the decision.
- Have you allocated resources to implement?
-Is the decision accepted and supported by colleagues?
TRUST IN THE LORD WITH ALL YOUR HEART AND LEAN NOT ON YOUR OWN
UNDERSTANDING; IN ALL YOUR WAYS ACKNOWLEDGE HIM AND HE WILL MAKE
YOUR PATHS STRAIGHT
Proverbs 3:5-6