The Planning Process and Types of Plans UNIT 2: Planning The Planning Process and Types of Plans

Planning The process of setting objectives and determining how to accomplish them. Helps anticipate problems before they happen Bridges the gap between where the business is now and where it wants to be. A plan is like a map. When following a plan, you can always see how much you progressed towards your project goal and how far you are from your destination. Knowing where you are is essential for making good decisions on where to go or what to do next. The only constant is change, continuing change, and inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be. Isaac Asimov Planning is a proactive process of setting performance objectives and deciding how to meet those objectives. If you plan effectively, you can reduce the time and effort needed to achieve performance objectives. With careful planning, you are more likely to see and to anticipate problems before they happen.

Why and how do managers plan? Steps in the planning process: Define your objectives. Determine where you stand vis-à-vis objectives. Develop premises regarding future conditions. Analyze and choose among action alternatives. Create plan, policies, and procedures Implement the plan and evaluate results. 1. Define your objectives––Identify desired outcomes or results in very specific ways. Be specific.   2. Determine where you stand vis-à-vis objectives––Evaluate current accomplishments relative to the desired results. 3. Develop premises regarding future conditions––Anticipate future events. Generate alternative “scenarios” for what may happen; identify things that may help or hinder progress toward your objectives. 4. Analyze and choose among action alternatives––Evaluate possible actions. Choose alternative(s) most likely to accomplish your objectives and decide what must be done to follow the chosen course of action. 5. Implement the plan and evaluate results––Carefully measure progress toward objectives. Do what the plan requires; evaluate results; take corrective actions and revise plans as needed.

Benefits of planning: Improves - Focus and Flexibility Action Orientation Coordination Time Management Time Management Link Control (1) Flexibility  A well-designed plan allows for flexibility and enables an organization to adapt to changing circumstances. By anticipating and planning for challenges and opportunities, a business can hopefully avoid or minimize crises. The focus is on the future rather than the past. (2) Coordination  A plan will ensure that all individuals in the organization are working toward unified goals or objectives. It ties all parts of the organization’s work together. (3) Time Management  Planning allows employees to prioritize their work. There is rarely enough time in a day to complete each and every task. Plans help people within a business to know which tasks are top priorities and which tasks are low priorities

leading planning controlling organizing The management function that involves setting performance objectives and deciding how to meet those objectives is referred to as _____________. leading planning controlling organizing

Which one of the following is not one of the benefits of planning? flexibility coordination time management disorder

Think – Pair - Share What kind of a planner are you? What importance does planning play in your life? When you are assigned a major project in school, do you map out a plan for completing it? Do you manage your time well? Do you prioritize important tasks to make sure they are completed first?  What is the biggest “time waster” that prevents you from completing essential tasks on time? Have you created a plan for what you will do after completing high school?

What types of plans do managers use? Short-range and long-range plans Short-range plans = 1 year or less Intermediate-range plans = 1 – 2 years Long-range plans = more than 3 years Top or Higher management levels focus on setting long-range plans and directions for the organization. Lower management levels focus on short-range plans

What types of plans do managers use? Strategic and operational plans Strategic plans — set broad, comprehensive, and longer-term action directions for the entire organization. Operational plans — define what needs to be done in specific areas to implement strategic plans. Production plans Financial plans Facilities plans Marketing plans Human resource plans

What types of plans do managers use? Policies and procedures Standing plans Policies and procedures that are designed for repeated use. Policy Broad guidelines for making decisions and taking action in specific circumstances. Rules or procedures Plans that describe exactly what actions are to be taken in specific situations. Policy– employee hiring, termination, pay increases, performance appraisals, discipline Rules – Standard Operating procedures – in employee handbooks – precise actions to be taken Policy – sexual harrassment policy Procedure – how to handle a complaint

What types of plans do managers use? Budgets and project schedules Single-use plans Only used once to meet the needs and objectives of a well-defined situation in a timely manner. Budgets Single-use plans that commit resources to activities, projects, or programs. Projects One-time activities that have clear beginning and end points. Project management makes sure project activities are completed according to project schedules. Budgets – Fixed (fixed amountof resources for a particular project) , flexible (allocation of resources to vary I proportion with various levels of activity, and zero-based budgets (approach each new budget period as if it was brand new).

The type of plan that sets the broad, long-term direction for a business is called a(n) __________ . Budget Operational Plan Strategic Plan Matrix

What are the useful planning tools and techniques? Forecasting Process of predicting what will happen in the future. Qualitative forecasting uses expert opinions. Quantitative forecasting uses mathematical and statistical analysis. All forecasts rely on human judgment. Planning involves deciding on how to deal with the implications of a forecast. Forcasting is a planning aid – be cautious Forecasting is an attempt to predict what will happen in the future. For quantitative forecasting, mathematical models are used that predict the future usually based on past results. Qualitative forecasts about future events are made using the knowledge and opinions of experts. Forecasts are useful planning aids, but they must be used with caution since they can be wrong.

What are the useful planning tools and techniques? Contingency planning Identifying alternative courses of action that can be implemented to meet the needs of changing circumstances. Contingency plans: anticipate changing conditions. contain trigger points. Contingency Planning identifies alternative courses of action that can be followed if circumstances change. You cannot always predict what will go wrong, but you can usually anticipate that something will. Whenever possible, it is best to be prepared with alternate plans.

What are the useful planning tools and techniques? Scenario planning A long-term version of contingency planning. Identifying alternative future scenarios. Plans made for each future scenario. Increases organization’s flexibility and preparation for future shocks. Scenario planning is used largely by businesses that have to make expensive long term decisions in uncertain situations. It is an adaptation of methods used by the military. Scenario Planning is not about predicting the future; rather it is intended to describe what is possible. Ideally, scenarios should be constructed by a diverse group of people for a specific purpose. Here is an example of how Shell, a leader in the business world, used Scenario Planning.

In early 1973, Pierre Wack, head of Corporate Planning for Royal Dutch/Shell, was frustrated. He was frustrated because he felt that Shell (and indeed the entire world) was operating on the basis of two questionable assumptions: that the supply of oil would remain plentiful and that the price of oil would remain low. Wack developed an approach now referred to as Scenario Planning. Wack presented a series of short stories (or scenarios) about possible futures to senior management at Shell. In one scenario, an accident in Saudi Arabia led to the severing of an oil pipeline, which in turn, decreased production and thus supply, creating a market reaction that increased oil prices, allowing OPEC nations to pump less oil but make more money. Senior management, when confronted with the scenario, re-examined its assumptions about oil price and supply. Investigating further, they concluded that OPEC was preparing to increase oil prices. When the oil price shocks of 1973 hit, Shell was the only major western company (or nation for that matter) that was prepared. Within two years, Shell moved from the eighth biggest oil company to the second. Willmore, Joe, “Scenario Planning: Creating Strategy for Uncertain Times”, Information Outlook 9.1.2001 available online

What are the useful planning tools and techniques? Benchmarking Use of external comparisons to better evaluate current performance and identify possible actions for the future. Adopting best practices of other organizations that achieve superior performance. Benchmarking involves comparing the performance and plans of the business against an industry standard or best practice. This comparison allows the business to develop plans on how to make improvements or adopt best practices. Measurement is the central focus of the benchmarking process. Therefore, benchmarking typically focuses on those activities that can easily lend themselves to measurement, such as production volumes and sales. In some cases, organizational attributes are translated into elements that can be meaningfully measured and compared.

What are the useful planning tools and techniques? Participation and involvement Include all the people who will be affected and/or asked to implement the plan in the planning steps. Benefits of participation and involvement: Promotes creativity in planning. Increases available information. Fosters understanding, acceptance, and commitment to the final plan. While managers are ultimately responsible for planning, they often choose to involve their team members in the planning process. Participatory Planning includes the people who will be affected by the plans and/or the people who will be implementing the plan. This planning strategy recognizes diversity and respects differences.

A planning strategy that involves comparing performance and plans against a standard or best practice is called ________________. Participatory Planning Scenario Planning Benchmarking Contingency Planning

A planning strategy that identifies alternative courses of action that can be followed if circumstances change is called ____________________. Participatory Planning Scenario Planning Benchmarking Contingency Planning

The type of plan that sets the broad, long-term direction for a business is called a(n) __________ . Budget Operational Plan Strategic Plan Matrix

Time Management Techniques Funny Link Time Management Techniques Use a time management matrix. This technique will enable you to challenge and question your own habits, routines, and practices.  Decide when to look at your emails and instant messages. turn off the pop-up or noise that tells you when you have received email. Use a diary or activity planner. Create a weekly schedule Effective To Do List

Procrastination Link

Put First Things First Explaination Link