A perspective of planning literature

138

A perspective of planning literature

Takehiko MATSUDA and Masaaki HIRANO Department of Systems Science, Tokyo Institute of Technoloa, Yokohama 227, Japan

Received July 1981 Revised January 1982

The wide spread disbelief and frustrations amongst managers and executives about planning theories do not seem to be caused only by the confusions over concepts and terminology, but also by the absence of a perspective of planning literature from the view point of comprehensive planning behaviour of an individual and an organization. In this paper. to explore the relationships between the concepts discussed in the planning literature, we first briefly review an hypothesis of planning behaviour which we have introduced before (Section 2). and then develop, under the framework of the hypothesis, the dimensions and subdimensions employed in an analysis (Section 3.1). Having listed the “sample” planning literature for the analysis (Section 3.2), the results are shown in the form of tables (Section 3.3). Finally, comments and discussions are made on the methodological problems, on the variety and relative mutual independence between planning concepts, on the normative vs descriptive balance of planning research, on the necessary and possibly fertile areas of future planning research, and on the relation of the analysis to the status of our hypothesis (Section 4).

1. Introduction

Despite the ubiquity of planning literature and planning advocates, the notion of planning does not seem to be fully appreciated and understood in practice. Dissatisfaction and frustration of managers and executives with the unfulfilled promises of planning seem to be growing at a speed proportionate to that of planning’s populari- zation. This is evidenced in the occasional outcries of disbelief towards planning, planning literature or even management science in general, or more frequently in the silent shelving of plans. or in the practices of staffing the planning section with those who are thought of as not being particularly right for “more practical” functions (eg, production. sales. etc).

North-Holland Publishing Company European Journal of Operational Research 12 (1983) IX-145

There is no doubt that one of the main causes of this dissatisfaction and frustration is the confu- sion about concepts and terminology of planning, which have been discussed elsewhere ([ 13,171, etc). Nevertheless, absence of a perspective of planning literature from the view point of comprehensive planning behaviour of individuals and organizations is, the authors believe, no less responsible for the present unfortunate situation surrounding planning. Though planning theorists maintain and prescribe variety of imperatives, usually without explicit reasonings, it is not evident in the slightest for those who are not scholars of planning but who are actually to plan for making decisions, whether those imperatives are contradictory or compatible with each other, nor whether the theorists are discussing the same matter, having discussion in its proper meaning at all.

The purpose of this paper is to give a perspective of planning literature, utilizing a framework of planning behaviour which we have introduced in the previous paper [ 141, to investigate the relationships between planning concepts, and to give an answer to the kind of questions as above. The next section briefly discusses the framework describing planning behaviour of individuals and organizations. Section 3 shows a survey of various planning literature, followed by the comments and discussions in Section 4. Section 5 states the conclusions.

2. Hypthesis of planning behaviour

In this section a hypothesis describing the planning behaviour of individuals and organizations with necessary definitions, assumptions and notions of benefit and cost of planning is briefly reviewed.

.? 1. Definitions

Planner. An individual or an organization oi concern. It is an abstract entity, and an organization is treated as the agent of actions when ap- propriate.

Model. A set of causal and/or correlational

0377-2217/83/0000-0000/$03.00 0 1983 North-Holland

T. Marsuda, M. Hiram / A perspeciive of planning literature 139

relations in the world which the planner bears in his (or its) mind.

Decision problem. A problem on which, the planner knows, a decision should be made one way or another. and which should be executed accordingly.

Decision-making. An act of theplanner to choose a set of alternative or alternatives as the solution to the decision problem. The “Don’t know” alternative is not considered as a solution, whereas the “Do nothing” alternative is.

Perceived information. The information which the planner receives from the outside world, and perceives.

System model. A set of causal and/or correlational relations which the planner thinks are pertinent to the decision problem. It is revisable through the process. Though a system model is logically a subset of the model, in practice, the former may consist of the (deduced) relations which are im- plicit in the latter.

Planning. The effort through which the planner tries to have a different system model from the previous one. It may decrease uncertainties in the system model. It inevitably incurs a cost.

Planning model. A subset of the model which, the planner thinks, is pertinent to a system mode1 and plannings. It is the planner’s judgement about how a planning affects a system model.

Estimation(g). The planner’s estimation of the performance of plannings.

g : {system model) X {planning} ---t R

where R represents the real number. Aspiration level( 7). A level (of the real number)

which the planner has in his (or its) mind about the performance of possible plannings.

2.2 Assumptions

(i) A planner always tries to improve his (or its) system model whenever he (or it) believes the effort pays off.

(ii) The meaning of better sxstenl model ia as- sumed to have been understood.

(iii) Compared with the cost of planning. the cOSt of other activities. ie. making a planning model Or an estimation etc. is negligible.

2.3. Structure of planning behaviour

The structure of planning is described here using the above defined notions and the assumptions, in a sequential form.

1. A planner realizes the existence of a decision problem upon receiving certain perceived information.

2. 3.

4

The planner designs a system model. The planner evaluates the performances of some number of possible planning alternatives with the planning model. The planner makes an estimate for the performance of each of the planning alternatives above.

5.

6.

If there exists planning alternative(s) such that g(system model, planning) a r for the present ‘;wtem model, then the planner proceeds to 6. Otherwise he (or it) proceeds to 8. The planner carries out a planning whose estimation equals to or exceeds the value 7, yielding a revised system model.

t 7. The planner proceeds to 3. 8. The planner proceeds to decision-making.

2.4. Benefit and cost of planning

In making the estimation of each planning alternative’s performance, the planner naturally takes a number of factors into consideration. Here two kinds of benefit gained through planning, and four kinds of cost incurred by it are listed. They are not exclusive of each other.

(i) Benefit of planning. (a) Compensation of the “bounded rationality”

[ 181. The most noticeable and discussed point about planning.

(b) Facilitating the implementation of decisions reached. Utilising the socio-psychological characteristics of organizational members.

(ii) Cost of planning. (c) Direct cosr. The marginal cost of each plan-

trm,g. (d) Committed cost. The fixed cost of planning

activities. Sunk cost in financial terms. (2) Opportunit>, wst uttriburable to the plunning

c;c’ticitie.s. What the planner could do with the

140 T. Matsuda, M. Hiram / A perspective of planning literature

resource necessary for each planning if the planner did not plan.

(f> Opportunity cost attributable to the decision taken as a result of the planning activities. Planning may produce wrong information.

Note. For more complete discussion of the hypothesis, refer to [14]. In that paper, it has also been shown that the hypothesis was generally sup- ported by the planning practitioners interviewed.

3. Analysis of planning theories

In this section, first the dimensions through which planning literature is to be analysed shall be derived from the framework of the hypothesis discussed above, and after the brief discussion on the “sample” literature, the result of analysis shall be shown.

3.1. Dimensions

The most eminent features of the hypothesis would be, the authors believe, the explicit considerations about planning alternatives, about their possible performances, and about the “choice” over the planning alternatives. The hypothesis as- serts that in practice, faced with a problem which should be solved one way or another and executed accordingly, an individual or an organization would not leap into a decision without any thought nor into a “strategic planning procedure” in- stantly; rather he, or it, would first look, implicitly or explicitly, for the right kind of planning effort for the problem (sometimes from his, or its, “plunning repertoire”), taking experience, ability, availa- ble resource, etc. into account. The choice would certainly not be dependent only on the above factors, but also on the factors like “taste” or “hatred” for planning as well. The result of the planning effort and subsequent decision would be stored in the memory for the purpose of future references.

To make the distinction of our hypothesis clear. it has been decided that the four dimensions listed below shall be identified for the analysis: - set of planning alternatives. - evaluation of the planning alternatives. -- choice over the planning alternatives, and - evaluation of the choice process (i.e.. planning model) itself.

(i) Set of planning alternatives. When viewed from the framework of our hypothesis, for any decision problem, there always exists a set of planning alternatives which is not empty, since “do no planning” is an element of the set [14, Proposition 3, Section 41. To find out which aspects of planning are considered by each planning theorist, the following subdimensions shall be distinguished:

(a) Planning or non-planning. Discussion on whether planning is worthwhile at all. Differently put, whether the “do no planning” alternative is considered.

(b) Orientation, priorities. Whether a number of orientations or priorities of planning (e.g., exter- nal-vs-internal orientation, sales-vs-production orientation, etc.) are distinguished and discussed.

(c) Principles. Whether a number of principles for decision or planning (e.g., optimization- satisficing, comprehensive-piecemeal, etc.) are distinguished and discussed.

(d) Series of planning activities. Whether several kinds of planning activities (e.g., strategic planning, middle-ranged planning, and budgeting) are treated as parts in an integrated planning activity, rather than as alternatives.

(e) Top managers’ effort. Whether the amount and/or nature of effort the top managers make on planning is discussed.

(f) Extent, precision. Whether extent and/or precision of plannings is discussed.

(g) Independent organization. Whether the advantages and disadvantages of having independent planning section (or department, or anything) are discussed.

(h) Techniques. Whether the specific techniques used in planning activities are discussed.

(ii) Evaluation of the planning alternatives. Hav- ing conceived a few of possible plannings for the problem, an individual or an organization evaluates them sequentially (using a planning model and estimation in our hypothesis). Obviously many factors are incorporated in this evaluation phase, and we have identified several subdimensions concern- ing benefit and cost of planning in Section 2.4. Here we shall simply list them again.

(a) compensation of the “bounded rationality”. (b) facilitating the implementation of decisions

reached, (c) direct cost, (d) committed cost,

T. Matsuda, M. Hiram / A perspective of planning literature

(e) opportunity cost attributable to the planning activities themselves,

(f) opportunity cost attributable to the decision taken as a result of the planning activities.

In the analysis it shall be checked whether subdimensions are discussed by each planning theorist.

(iii) Choice over the planning alternatives. This dimension deals with whether planning theorists, if they have dealt with several planning alternatives at all, prescribe an alternative as a best choice, maintain that the choice is contingent with the situation, identifying a set of different kinds of situations, or leave the choice to the planner’s (or reader’s) discretion. Although the subdimensions used here are the same as those in the planning alternatives, if a subdimension is not discussed by a theorist, asking about the choice would be meaningless, and when he discusses one of subdimensions but without giving plural alternatives, it could be naturally considered as imperative (pre- scription of an alternative).

(iv) Evaluation of the choice process itself. Al- though not discussed very much explicitly, it is implied by the hypothesis that the whole choice process over the planning alternatives itself is subject to evaluation, and to revision if necessary. In the terms of the hypothesis, planning model, estimation, and aspiration level are subject to evaluation and subsequent revision if necessary. This dimension is about whether the evaluation is considered by each theorist.

3.2. Literature to be analysed

The books and papers on planning listed below have been selected for analysis. Some of them have been chosen because of their important implications on the thought of planning, and others because they bear the terms “strategy”, “strategic planning”, or “corporate planning” in their title. - Ackoff, “A Concept of Corporate Planning” [ 11. - Ansoff. “Corporate Strategy” [2]. - Drucker, “Management” [ 31, - Ewing, “The Human Side of Planning” [5], - Godiwalla. Meinhart and Warde, “Corporate

planning- a functional approach’ [6], - Holloway and King, “Evaluating alternative ap-

proaches to strategic planning” [7],

### #

NNNrn

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142

Table 2

T Matsuda, M. Hiram / A perspective of planning literature

Evaluation of each alternatives

a. b. Bounded Implemen- rationality tation

c. Direct cost

d. Committed cost

e. Opportunity cost (planning activities)

f. Opportunity cost (wrong information)

March and Simon # I Godiwalla et al. Holloway and King # Lorange and Vancil Ewing # # # Drucker # # Steiner # # Ansoff # Lindblom # Lawrence # t Ackoff # # # Menke 8

- Lawrence, “Planning business strategies in diverse companies” [ 81,

~ Lindblom, “The science of muddling through” [91,

- Lorange and Vancil, “How to design a strategic planning system” [ lo],

- March and Simon, “Organizations” [ 111, - Menke, “Strategic planning in an age of uncer-

tainty” [ 151, - Steiner, “Strategic Managerial Planning” [ 191.

3.3. Results

Each of the “sample” planning books or papers listed above has been analysed against the dimensions discussed in Section 3.1. The results of analysis are summarized in Tables l-3.

(i) Set ofplanning alternatiues (Table 1). It has been found that the “sample” literature could be roughly grouped into five categories according to the subdimensions they principally deal with; - those which discuss “planning or non-planning”, - those which discuss “orientation, priorities”, .- those which discuss “orientation, priorities” and

“principles”, -- those which discuss “principles”. and - those which discuss “techniques”. Nine “samples” out of twelve present alternatives in some sense. but the areas treated vary tremendously from one theory to another and no uniform pattern has been found. Four “samples” discuss some “series of planning activities”.

# #

# f

d

(ii) Evaluation of the planning alternatives (Ta- ble 2). Nine “samples” out of twelve either discuss, or mention, benefit and cost of planning, though their treatment is not necessarily thorough nor intensive. As for the benefit, all “samples” but one which deal with benefit, mention the “bounded rationality” subdimension, but the “implementation” subdimension is mentioned by only five “samples”. On the other hand the cost of planning is discussed rather rarely, and specifically the “opportunity cost attributable to the planning activities themselves” is mentioned by none.

(iii) Choice over the alternatives (Table 3). Obvi- ously each subdimension under this dimension only matters when a theorist is giving consideration to it. Most issues discussed are either one alternative being recommended by the author(s), contingent wih the specified situation, or no matter of choice at all, and only a few are left for the planner’s discretion.

(iv) Evaluation of the choice process itself: No “samples” mention this dimension.

4. Discussions

It is extremely unfortunate that our analysis is not immune from conceptual nor technical difficulties. The conceptual difficulties lies in the enumeration of subdimensions under the “pluming alternative” dimension (and consequently, the “plunning choice” dimension). Although the iden-

T. Maisuda, M. Hirano / A perspective of planning literature 143

i I- . ,

A#+

x x X

tnt IX# /

tification of the four dimensions within the framework of the proposed hypothesis, and that of subdimensions under the “evaluation” dimensions, have been rather logical, the enumeration of subdimensions under the “planning alternatives” has not. It has been done in a more or less ad hoc fashion with the help of common sense rather than logical reasoning.

On the other hand, the technical difficulties lie in the selection of the “sample” planning theories: not only logically, but also practically no justifica- tion is possible for the selection prior to the analysis. Since there does not exist any widely accepted typology of planning literature, let alone the sam- pling method of planning literature, one never knows which combination of samples is satisfac- tory to represent the population (the whole range of literature which concerns itself with planning) in terms of variety and number. The sample theories selected for the analysis, therefore, are at best tentative, and they might well have been unsatis- factory in variety and number, or heavily re- flecting the authors’ bias or taste.

I Even when we decide to assume that these difficulties are solved, or rather decide not to dwell upon the matter for the moment, another kind of technical difficulty would occur when evaluating a book or paper against each subdimension. There is no guarantee that other students of planning would perfectly agree with the authors about every entry in the tables. As the evaluations are largely subjec- tive in nature, marginal differences in opinion are inescapable.

Despite its difficulties discussed above, how- ever, the analysis has given some insights con- cerning so called planning literature. First of all it has shown that the “sample” planning materials could be categorised into several (five in this analysis) groups according to their treatment of the planning alternatives. It should be noted that eight “samples” out of twelve have either “strategy”, “strategic planning”. or “corporate planning” in their title, and supposedly are dealing with a more or less common area. Further it should be also noted that if the “samples” are heavily biased. it should be in the direction favouring the comprehensive framework of planning behaviour which rhe authors maintain; the number of the “samples” with more comprehensive view point may be disproportionately large to the population of planning theories. but never disproportionately small.

144 T. Matsuda, M. Hiram / A perspective of planning literature

The somewhat startling result of Table 1 suggests that some theorists are discussing completely different matters from others, with only the titles and brief and casual remarks connecting them all. This proves to some extent the doubt which has been conceived by the practitioners about planning literature. In a scene in which two planning theorists look like arguing with each other, quite frequently in fact each theorist is arguing by himself, without discussing the same topics. In the cases of this kind, therefore, it is impossible to determine which of the two is right or wrong, or better or worse. Rather, since they are treating different matters, what they maintain could be employed independently of each other to some extent, according to the feature of planning activities. Summarily, though for the materials in the same group it is a matter of choice as they are discussing more or less the same problem, those in different groups are relatively independent of each other.

Secondly, the result of Table 3 suggests that the “samples” are overwhelmingly balanced on the normative type of research against the descriptive type. Of course few practical researches, either engineering, planning, or any so far as they are secular, are purely normative or descriptive; normative theories inevitable include some empirical (i.e., descriptive) evidences as the basis for their imperatives, whereas descriptive theories naturally draw (normative) lessons from their empirical findings. It would, nevertheless, be fair to say, from the results of the analysis, that in most planning literature the majority of factors are pre- scribed either a priori or with, at best, a little evidence; the few things to be determined and the whole burden of implementing the results of planning are conveniently left for an individual’s or an organization’s discretion. Although it is true that, in practical field like engineering, there are cases where we have useful and practical prescriptions without knowing the mechanisms ruling the phe- nomena concerned (i.e., descriptions), generally, the understanding of the mechanism should come before the manipulation of the imperatives. In this sense, a more balanced approach between normative and descriptive researches should be made for the future investigation of planning behaviour.

Thirdly, according to Table 2, but for the compensation of the “bounded rationality”, rather little consideration seems to have been given to what

is able to be attained by planning and what should be devoted or given up for the execution of it. The attitude of planning advocates tending to encour- age planning under any situation, speaking only of its advantages and rarely of the disadvantages. and that they seldom if ever try to dissuade from planning, might, the authors suspect, be giving the practitioners some of the partisan impressions, and as a result contributing significantly to their disbelief in the planning theories other than a few exceptions (e.g., employment of LP model in chemical industry).

If one is to be rational, it goes without much saying that he should identify the advantages and disadvantages (benefit and cost) for each course of action, before he commits himself to any alternative. This applies, obviously, to organizations, and more so if the decision concerned could involve huge amounts of resources and have substantial implications for the decision-marker’s future, as in the case of planning. Perhaps it is the time we initiated efforts to identify the advantages and disadvantages of planning, and to develop the methods to measure the effectiveness and efficiency of planning (one of the few examples of the research in this speculative direction is [4]).

Fourthly, it is rather surprising that no “sample” even mentions, let alone discusses, the evaluation of planning evaluation process itself. The fact seems to suggest that the “sample” materials are assuming the existence of one best evaluation process, if not of one best planning, under any cir- cumstances. Though theoretically, this kind of considerations gives way to the regression, practically it would be quite sensible to re-evaluate the evaluation process itself periodically, when one thinks of the dynamic characteristics of the en- vironment which we are presently in. This lack of relfection on its own activities might also contrib- ute to some extent to the disbelief of the practitioners about planning.

Finally. some words on the relevance of this analysis to the status of our hypothesis about planning behaviour may be due. As we have stated in the closing section of our previous paper, where- we have introduced a hypothesis decribing the planning behaviour of an individual and an organization, generally it is almost impossible to claim the validity of new frameworks in the devel- oping fields (e.g. organization theory or planning theory), by strictly following the conventions of

T. Matsuda, M. Hirano / A perspectiue of planning literature 145

natural science. It is common, therefore, that the supporting evidence is collected either by experi- ments or survey (not necessarily strictly and satis- factorily designed in the sense of natural science), by case study (re-interpretation of the historical facts through the framework), or by showing the theoretical and/or practical applicability of the framework.

We have followed the third method here. Through the analysis under the framework of our hypothesis, the relationships between the “sample” planning materials have been clarified to some extent, and the insight about necessary and possibly fertile areas for the future planning research has been obtained, and thus the theoretical applicability of the hypothesis, in spite of the methodological difficulties discussed earlier in this section, has been manifested.

5. Conclusions

If the Parkinson’s law of triviality [16] is, in fact, holding true, it would be sensible to investigate explicitly how individuals or organizations determine the amount of effort they devote to each planning activity with reference to the problem which they are faced with.

In this paper we first briefly reviewed our hypothesis describing the planning behaviour of an individual and an organization (Section 2) followed by discussions of the dimensions and subdimensions used in the analysis (Section 3.1), and the selected “sample” planning literature (Section 3.2). The results of the analysis (Section 3.3) are shown in the Tables l-3. Finally rather extensive discussions are made about the methodological difficulties, the findings about “samples”, the insights obtained about the future planning research, and the relation of this analysis to the status of the hypothesis presented (Section 4). The main points made are: - Planning theorists are not necessarily dealing

with the same aspects, and not rarely they are iktependent of each other to some extent,

- mmning research is overwhelmingly normative in nature and ratio of descriptive research is rather small,

- Advantages and disadvantages, effectiveness and efficiency of planning should be explicitly investigated in future,

-- The planning evaluation process should be reevaluated periodically, and

- Theoretical applicability of the hypothesis has been shown.

References

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R.L. Ackoff, A Concept of Corporate Planning (Wiley, New York, 1970). H.I. Ansoff, Corporate StruteD (McGraw-Hill, New York, 1963). P.F. Drucker, Management (Harper’s College Press, New York, 1977). R.G. Dyson and M.J. Foster, Effectiveness in strategic planning, European J. Operutional Rex 5 (1980) 163- 170. D.W. Ewing, The Human Side o/ Planning (Macmillan, New York, 1965). Y.M. Godiwalla, W.A. Meinhart and W.D. Warde, Corpo- rate planning-a functional approach, Lange Range Plan- ning II (1978) 47-54. C. Holloway and W.R. King, Evaluating alternative ap- proaches to strategic planning, Lange Range Planning I2 (1979) 74-78. J. Lawrence, Planning business strategies in diverse companies, J. Operational Res. Sot. 30 (9) (1979) 777-783. C.E. Lindblom, The science of “muddling through”, in: H.I. Ansoff, Ed, Business Strategy (Penguin, Harmonds- worth, 1969) 4 I-60. P. Lorange and R.F. Vancil, How to design a strategic planning system, Harvard Business Rev. (1976) 75-8 1. J.G. March and H.A. Simon, Organizations (Wiley, New York, 1958). T. Matsuda, Planning and Information (in Japanese) (Nip- pon Hoso Shupan Kyokai, Tokyo, 1969). T. Matsuda and M. Hirano. On the research of corporate strategy and strategic planning (in Japanese), Proc. Opera- tions Res. Sot. Japan (Spring 1978) 75-76. T. Matsuda and M. Hirano. A study on the structure of planning behaviour. European J. Operational Res. 9 (2) (1982) 122-132. M.M. Menke, Strategic planning in an age of uncertainty, Lange Range Planning 12 (1979) 27-34. C.N. Parkinson, Parkinson’s Law (Houghton Mifflin, Bos- ton 1979). R. Rosen, Planning, management, policies and strategies: four fuzzy concepts, Internat. J. General Systems I (1974) 245-252. HA Simon. ~rl~mnr.~rurir C’ R~/uIL,,;I t The Free I’rr~, New York. 1945). G.A. Steiner, Strategic Management Plonnrng (The Plan- ning Executives Institute, Oxford, 1977).

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A perspective of planning literature