Planning in Organizations (Good Planning Provides: (Sense of direction and…
Planning in Organizations
What is Planning?
Planning is a mechanism to analyze the strength,weakness, opportunities and threats.
Planning is the process used by managers to identify and select appropriate goals and courses of action for an organization.
Why Planning is Important?
Planning determines where the organization is now and where it will be in the future.
Good Planning Provides:
Sense of direction and purpose: Planning sets goals and strategies for all managers.
Coordination: Plans provide all parts of the firm with understanding about how their systems fit with the whole.
Participation: All managers are involved in setting future goals.
Control: Plans specify who is in charge of accomplishing a goal.
Characteristics of Planning
Time horizon (Refers to how far in the future the plan applies)
Long-term plans are usually 5 years or more.
Intermediate-term plans are 1 to 5 years. (Corporate and business level plans specify long and intermediate term)
Short-term plans are less than 1 year. (Functional plans focus on short to intermediate term)
Three Stages of the Planning Process
Determining the organization's mission and goals
The mission statement identifies product, customers and how the firm differs from competitors.
Managers analyze current situation and develop strategies needed to achieve the mission.
Managers must decide how to allocate resources between groups to ensure the strategy is achieved.
Types of Planning
Single-use plans (Developed for one-time, non programmed issue)
Programs: Integrated plans achieving specific goals.
Project: Specific action plans to complete programs.
Standing plans (For programmed decisions)
Managers develop policies,rules and standard operating procedures.
Weakness of Planning
Restricting change and adaptation
Organizations that are too committed to achieve what is planned before fail to make change when their is a change in the environment
Planning is based on assumption only and it is not easy to predict the future
Separation between planners and implementers
The planning does not work when it does not match with the ability of the operating level
Influence of Environmental Factors On Planning
Economic changes directly affect the supply and demand of resources and products
Changes in technology
Organizations need to plan resources effectively to suit the technological changes that occur to ensure the planning work well
Organizations faced difficulty in fulfilling the needs and requirements of the customers due to the demographic changes
Laws and government regulations
Planning of the organization is affected by government tax laws, labor laws, safety laws and others.
SWOT analysis: A planning to identify
Organization Weakness (high labor turnover, weak financial)
Environmental Threats ( economic recession, competitors)
Environmental Opportunities (new markets)
Organization Strength (manufacturing ability, marketing skills)
Planning Strategy Formulation
Managers analyze the current situation to develop strategies achieving the mission