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Management Activity Planning (Types of plans (Strategic Planning…
Management Activity Planning
Benefits of planning
Planning helps avoid future problems
Planning motivates employees and managers
Planning guides the business to success
Planning helps secure capital
Planning eliminates the business's weaknesses
A mission Statement is a short, written statement that sets out the firms overall goal for the lifetime of the business i.e. the direction that the business is going
Who is interested in Planning?
Investors
Employees
Suppliers
SMART Plans
S: Specific - the plan must clearly state its goal. Everybody should understand what the plan will achieve.
M: Measurable - There should be evidence that the goal has been achieved E.G. measured in units, sales or percentages
A: Achievable - The goal must be realistic. It should challenge the business to achieve it, but it should be possible to achieve.
R: Relevant - The goal must be relevant to the overall business goals
T: Timed - This is the target date when the goal should be achieved
Types of plans
Strategic Planning: a long term plan (1-5 years) of action for the entire business. It is written by senior managers. The main goal is profit
Tactical Planning: A short term plan for the business (1-2 years). Plan is written by middle managers.
Operational Planning: This shows the day to day running of a business. Short term planning looking at the weeks and months ahead. (0-1 year)
Contingency Planning: A back up plan which can protect business of unexpected events. Events such as strike or damage may require a plan. (0-1 year). Written by all managers
Human resource/ man power plan: This plan ensures that the business has the correct number of employees with the correct skills and qualifications to fill all roles in the business. (0-1 year). Drawn up by the HR manager
Financial Plan: Businesses prepare cash flow forecasts to predict the amount of income they will receive and spend in a particular period of time. Drawn up by the finance manager. (0-1 year)
SWOT Analysis indicates the business's Strengths, Weaknesses, Opportunities and Threats
Steps in the planning process
Set a goal
Create a plan
Assess the situation
Implement the plan
Review the plan
Planning is where goals/objectives are set for the business to achieve in the future and then come up with business strategies to achieve these objectives
Plans must be: easy to understand, realistic and possible to achieve and flexible to allow for unexpected changes
Benchmarking: Business monitors its progress by comparing its planned targets with actual results