Planning

Planning
See also
Tactical management Structure of enterprise planning system Plan Business plan CMM model Strategic controlling Strategic intent Managerial controlling Operational control Legacy Planning

Planning is a process of setting aims and adequate actions in order to reach the aim. It means that the managers think about their aims and actions in advance and that the actions are supported by corresponding methods, plans or logic, not based on feelings or intuition.

Planning is the primary stage of the management process, involves the determination of the purpose and direction of the organization. Defines what to do, when and how this should be done and who should do it. Planning is the process: the plan must be realized, and during its implementation it may be necessary to modify it.

Plans designate main goal of the organization and define the best realization procedures. Moreover, the plans are the guidelines by which:

• Organization obtains and assigns resources needed to reach the goals.
• Members of organization work according to chosen goals and procedures.
• The progress is verified and measured, so that the corrective actions are taken if needed.

Types of planning

• Strategic (more than 5 years) – future plan, which helps setting the right actions and way of accomplishment
• Long term (2–5 years) – specific ventures aimed to reach the fundamental goal
• Midterm (few months – one year) – a statement, what needs to be done to accomplish the long term plan
• Short term (max 3 months) – short, urgent tasks
• Current – plans that need to be done daily or weekly, concerning everyday plans

Steps of planning

• The first step is always choosing a goal (define objectives) for the organization. Firstly, there is always done an analysis of the reality where the company exists. The environment, its strengths and weaknesses, executive's ambition and the potential ready to be engaged in the process of implementation of the new strategy have a great impact on every further step of planning.
• Next, the aims for each unit, its branches or departments, are defined.
• Before proceeding to final step in planning, detailed SWOT analysis should be performed, to determine strengths and weaknesses of the organization,
• After setting a goal the company sets the program and the plan for its systematic realization. While choosing a certain aim and elaborating its program the head of the venture need to consider if it is possible to reach the goal with the chosen program, and if it is acceptable for other managers and employees.

Fig. 1. Relationships between planning and control

Relationships between planning and control

Control is the process for ensuring that the activities are consistent with the plans, control is impossible without a plan (fig. 1.). Control is based on a comparison of the facts on the events and processes, with their pre-planned levels. Control may lead to adaptation of plan.

See also:

• Management functions
• Departmental planning
• Implementation and control of marketing plan
• Types of planning

Examples of Planning

• Strategic Planning: Strategic planning is the process of setting goals and objectives for an organization to achieve in the future. This type of planning involves creating a long-term vision for the organization and then developing the strategies, tactics, and action plans to reach that vision.
• Financial Planning: Financial planning is the process of creating a budget and a financial plan to manage and maximize an organization's resources. This includes creating a plan to manage expenses, set and monitor financial goals, and create a strategy to achieve those goals.
• Operational Planning: Operational planning is the process of developing plans to manage and optimize the operational processes of an organization. This includes creating plans to manage resources such as personnel, materials, and equipment, as well as designing and implementing operational procedures to ensure efficiency and effectiveness.
• Project Planning: Project planning is the process of creating a plan to manage a project and its related tasks. This involves creating a timeline for the project, setting goals and objectives, and developing strategies and tactics to reach those goals.

Advantages of Planning

Planning is an essential tool for any organization. It helps managers to set and reach their goals, while managing and allocating resources effectively. Here are some of the advantages of planning:

• Planning helps to increase efficiency and reduce costs by enabling managers to allocate resources in a more effective way. It also allows them to anticipate and plan for potential problems, thus avoiding costly mistakes.
• Planning helps to provide focus and direction to the business, through the setting of clear goals and objectives. It also helps to create a sense of unity and purpose, as all employees understand the organization’s direction and are working towards a common goal.
• Planning helps to reduce risk, as it provides an opportunity to analyze potential threats and develop strategies to mitigate these risks.
• Planning helps to identify opportunities, as it enables managers to look at the current environment and identify potential opportunities for growth and development.
• Planning helps to increase motivation and morale, as it provides a sense of direction and purpose for employees. It also encourages employees to take responsibility for their own actions, as they understand the objectives and have a clear plan of how to achieve them.

Limitations of Planning

Planning is an important process for any organization and is essential for successful operations. However, there are several limitations to the planning process, including:

• Time and resources: Planning requires a significant investment of time and resources, and the availability of these resources may limit the effectiveness of the planning process.
• Unpredictability: Planning assumes that the future will be the same as the present, but in reality events can change rapidly, making it difficult to predict the future.
• Overconfidence: Planning can lead to overconfidence in the ability of managers to predict the future, causing them to overlook potential risks.
• Rigidity: Planning can lead to a rigid approach to problem-solving, making it difficult to adjust to changing conditions.
• Groupthink: Planning can lead to groupthink, which can lead to a lack of creativity and innovation.
• Bias: Planning can be subject to the biases of the planners, which may lead to flawed decision-making.

Other approaches related to Planning

In addition to setting aims and actions, Planning is also related to other approaches. These include:

• Forecasting: forecasting is the process of estimating the future. It involves making predictions about future events, behaviours and trends, and using them to help make decisions.
• Goal setting: goal setting is the process of defining what an individual or organisation wants to achieve and then working to reach that goal.
• Decision making: decision making is the process of selecting a course of action from a number of available alternatives. It involves gathering and analysing information, evaluating options and making choices.
• Problem solving: problem solving is the process of identifying, analysing and solving problems. It involves understanding the problem, thinking of possible solutions, and implementing the best one.

In summary, Planning is related to a number of approaches that involve making predictions, setting goals, making decisions, and solving problems. These approaches help individuals and organisations to achieve their aims and reach their goals.

References

• Ansoff, H. I., & McDonnell, E. J. (1990). Implanting strategic management (Vol. 2). New York: Prentice Hall.
• Pearce, J. A., Robinson, R. B., & Subramanian, R. (2000). Strategic management: Formulation, implementation, and control. Columbus, OH: Irwin/McGraw-Hill.
• Thompson, J. L. (2001). Strategic management. Thompson Learning.

Author: Agnieszka Paszek