Answer to Question #247964 in Management for Irosha

Question

What is the meaning of planning

Answer 1

Discussion

Planning is deciding in advance what is to be done in future. It is the process of thinking before doing. It involves determination of goals as well as the activities required to be undertaken to achieve the goals. Planning helps people achieve their goals, and allows for more efficient use of time and other resources. Planning means analyzing and studying the objectives, as well as the way in which to achieve them. It is a method of action to decide what to do and why. 

Below are some of the major types of planning; 

Strategic Plans

Strategic plans are designed with the entire organization in mind and begin with an organization's mission. Top-level managers, such as CEO's or presidents, will design and execute strategic plans to paint a picture of the desired future and long-term goals of the organization. Essentially, strategic plans look ahead to where the organization wants to be in the future years to come. Strategic plans, provided by top-level managers, serve as the framework for lower-level planning.

Tactical Plans

Tactical planning is the step taken after a business or team creates a strategic plan to break that plan into smaller objectives and goals. It is used to define goals and determine how they will be achieved through actions and steps. Most tactical plans outline specific steps or actions that will be taken to meet the goals of the larger strategic plan. These actions or steps are then often delegated to the appropriate team members or employees to ensure they are met in a timely fashion.

Operational Plans

An operation plan is an extremely detail-oriented plan that clearly defines how a team or department contributes to reaching company goals. It outlines the daily tasks required for running a business. When properly created, an operating plan makes sure each manager and each employee know their specific obligations, as well as how they should execute them within a defined timeline. Mapping out the day-to-day tasks that ensure a clear path to the business and operational goals is essential to success.

Steps involved in planning

• Being aware of opportunities

An awareness of opportunities in the external environment of business as well as inside the organisation or its internal environment is the real starting point of any planning exercise. All managers should take a preliminary look at possible future opportunities and see them clearly and completely, know where their company stands now in light of its strengths and weaknesses, understand what problems it faces and has to solve and why, and know what it stands to gain if at all. Planning is preconditioned by a realistic diagnosis of the opportunities and challenges.

• Establishing Objectives

Another step in planning is to establish objectives for the whole enterprise and then for each department or separate work unit. This is to be done for both the long-term and short- range. Objectives specify the expected results, and indicate the end points of what is to be done, where the primary emphasis is to be placed, and what is to be achieved through the network of strategies, policies, procedures, rules, budgets, and programmes.

• Developing Premises

The next step in planning is to establish, circulate and reach agreement to utilize critical planning premises, such as – forecasts, policies, and existing company plan. Premises are assumption about the environment in which the plan is to implement. All the managers involved in planning should agree on the premises.

• Finding out Alternative Courses

The next step in planning is to search out or identify and examine alternative courses of action, particularly those which are not immediately apparent. For every plan reasonable alternatives exist. And at times an alternative which is not obvious appears to be the best.

It is also necessary to reduce the number of alternatives so that the most promising one can be analysed. 

• Evaluating Alternative Courses

This step involves evaluating the alternatives by weighing them keeping in view premises and goals. One course may appear to be the most profitable but may require a large cash outlay and may have a slow payback; another may look less profitable but may involve less risk also; still another may be more suitable for meeting the company’s long- range objectives.

• Selecting a Course

This step is concerned with selecting a course of action since the plan is to be adopted now. This is the true rationale of decision-making. In most situations the manager may decide to follow several courses rather than the one best course.

• Formulating Derivative Plans

Once a decision is made, derivative plans are almost invariably required to support the basic plan. 

• Quantifying Plans by Budgeting

This step in planning lies in giving plans meaning, and to quantify them by converting them into budgets. Each department or programme of a business is likely to have its own budgets, usually of current expenses and long-term capital expenditures, which is to be incorporated into the overall budget. If done well budgets become a means of adding the various plans and set important standards against which the overall progress of planning can be checked or even measured.

Importance of Planning

• It helps managers to improve future performance, by establishing objectives and selecting a course of action, for the benefit of the organisation.
• It minimizes risk and uncertainty, by looking ahead into the future.
• It facilitates the coordination of activities. Thus, reduces overlapping among activities and eliminates unproductive work.
• It states in advance, what should be done in future, so it provides direction for action.
• It uncovers and identifies future opportunities and threats.
• It sets out standards for controlling. It compares actual performance with the standard performance and efforts are made to correct the same.

Planning is present in all types of organisations, households, sectors, economies, etc. People need to plan because the future is highly uncertain and no one can predict the future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success.

Reference

Steiner, G. A. (2010). Strategic planning. Simon and Schuster.