MANAGING THE PLANNING PROCESS

MANA 3319A Pandey

PLANNINGA management function that:

assesses the management environment to set future objectives; and

maps out activities necessary to achieve those objectives.

Planned actions require careful resource allocation.

Plans must be accompanied by implementation guidelines.

ELEMENTS OF PLANNINGObjectives: what?

Actions: what to do?

Resources: with what?

Implementation: how to?

BENEFITS OF PLANNINGAssessment of external forces

Develop a sense of direction and purposeIdentifying the factors that affect the organization

Encouraging participationCoordination of effortsEstablishment of prioritiesFocusing attention on different time horizons

BENEFITS OF PLANNING (CONTINUED)

Understanding circumstances contributing to past success or failureEnsuring the availability of adequate resourcesEstablishing performance standards

Supporting organizational control systemsDeveloping “what if” scenariosManagement development

THE PITFALLS OF PLANNINGPoor forecasts of future conditions

Plans imposed from abovePlanning as a self-contained activity

Extensive bureaucratizationInflexible adherence to objectives and processes

HOW TO PLAN SUCCESSFULLYDecentralizing the planning powers

Using both numerical and judgmental methods

Viewing planning as continuous and capable of adapting to changeAvoiding paralysis of the analysisConcentrating on a manageable set of issues

GOOD AND BAD PLANNINGGOODDecentralize planning

processUse numerical and

judgmental methodsAssess external forcesDevelop a sense of

direction and purpose Identify factors that

affect the organization Encourage participationCoordinate effortsEstablish priorities

BADPoor forecast of future

conditionsPlans imposed from

poor forecastsPlanning as self-

contained activity

FORMAL PLANNING AND OPPORTUNISTIC PLANNINGFormal planning Identify objectives Structure the major

tasks of the organization to accomplish them.

Opportunistic planning triggered by unforeseen

circumstances. can coexist with formal

planning and help the formal plan function more smoothly.

THE FORMAL PLANNING PROCESS INVOLVES

Setting objectivesCharting a course of action to meet the objectives

Implementation

OBJECTIVES Specific Measurable Achievable Realistic Timely

More general at the top and more specific at the lower level

Reflect its mission Should be prioritized

CHARTING A COURSE OF ACTION

Strategic Action PlansProactive, congruent, synergistic

Tactical Action PlansDivision of labor, budgeting

Operational Action PlansInputprocessoutput cycle

TO BE EFFECTIVE, A STRATEGIC ACTION PLAN SHOULD MEET THE FOLLOWING CRITERIA:

Proactivity – The degree to which the strategic action plan takes a long-term view of the future.

Congruency – The extent to which the strategic action plan fits with organizational characteristics and the external environment.

Synergy – The integration of the efforts of various organizational subunits to better accomplish corporate-wide business objectives

TACTICAL ACTION PLANS MUST INCLUDE: Division of Labor – The formal

assignment of authority and responsibility to job holders.

Helps ensure that tasks of jobholders are appropriate for accomplishing the department’s tactical action plan, which in turn should support the organization’s strategic action plan.

Budgeting – Controlling and allocating funds.

Variable budgeting

Moving budgeting

A TYPICAL OPERATING SYSTEM

Feedback Loop

Control

Inputs Transformation Outcome

OPERATIONAL PLANS MUST INCLUDEOpportunity to use feedback for continued

incremental learning.Ability to visualize alternative types of

operations – that is, alternative ways to use resources to create a product or service.

Ability to predict the effects of modifications in operations on the efficiency of operations.

Ability to evaluate the effectiveness of operations.

IMPLEMENTATIONMeans of implementation:

AuthorityPersuasionPolicyFeedback mechanism

A SIX-STAGE APPROACH TO FACILITATE ORGANIZATIONAL PROBLEM SOLVING1. Identify performance gaps.2. Identify tasks and work processes.3. Check for organizational congruence.4. Align in-congruencies or

inconsistencies to effectively implement the plan.

5. Execute the plan.6. Learn from the consequences.