Planning — Notes

Planning: deciding beforehand what to do, how, when and by whom, so that goals are reached. It is the first function of management; organising, staffing, directing and controlling follow it.

Features

1. Focuses on objectives — plans are made for goals, never for their own sake.
2. Primary function — the base for all other functions.
3. Pervasive — at top, middle and lower levels, in every department.
4. Continuous — when one plan's period ends, another plan begins.
5. Futuristic — looks ahead, using forecasts.
6. Involves decision making — only arises where alternatives exist.
7. Mental exercise — needs foresight, imagination and judgement.

1. Direction: goals stated beforehand tell staff what to aim at.
2. Reduces risks of uncertainty: forecasting lets managers prepare for change.
3. Reduces overlapping and wasteful activities: departments act in harmony; duplication is avoided.
4. Promotes innovative ideas: the hunt for options brings fresh thinking.
5. Facilitates decision making: goals and forecasts give criteria for choosing.
6. Establishes standards for controlling: planned targets are the yardsticks for judging results.

Link to controlling: planning sets targets; controlling compares actual results with them. Planning without controlling is pointless; controlling without planning is blind.

1. Rigidity: managers feel bound to a fixed plan and cannot seize new chances.
2. May not work in a dynamic environment: policy, technology, competition or demand may change after the plan is made.
3. Reduces creativity: plans come from the top; lower levels mostly carry them out.
4. Huge costs: information, experts and forecasts cost money.
5. Time-consuming: long preparation may leave no time for action.
6. Does not guarantee success: past success can breed false confidence.

Reducing them: flexible plans, review points, participation of staff, follow-up.

1. Setting objectives for the firm and each department.
2. Developing premises: forecasts and assumptions; every planner should use the same ones.
3. Identifying alternative courses of action.
4. Evaluating alternative courses: positives, negatives, cost, risk, returns.
5. Selecting an alternative (or a combination).
6. Implementing the plan: resources, people and deadlines assigned; action begins.
7. Follow-up action: monitoring and correcting.

Tip: steps 3, 4 and 5 are list, weigh, choose.

Single-use plans serve one non-recurring event or project: programmes, budgets for one occasion. They lapse when the event is over.

Standing plans guide recurring situations again and again: policies, procedures, methods, rules.

Objectives: end results the organisation seeks; best when measurable and time-bound. All other plans serve them.

Strategy: a comprehensive plan that fixes long-term direction, the course of action and the allocation of resources, with the business environment in view.

• Policy: a general guide to thinking and decisions; leaves room for judgement (e.g. "promote from within where suitable").
• Procedure: a fixed order of steps for a routine activity.
• Method: the prescribed way of doing one task or step; the best method saves time and effort.
• Rule: a specific do or do not; no discretion; a penalty usually follows a breach.
• Programme: a detailed plan of a project: tasks, people, resources and timing.
• Budget: expected results in numbers for a future period; also a control device.