CHAPTER 2

CHAPTER 2: PLANNING

Prepared by: Nadia Fatihah binti Mastan

Learning Objectives

After completing this chapter, students should be able to:•Define planning•Explain why planning is critical for effective leadership•Describe strategic planning•Discuss operational plan

Planning

2.1 Definition and importance of planning2.2 Types of planning and goals2.3 Strategic planning2.4 Mission statement2.5 Types of organizational plan/operational

plan

Definition of planning• The process of determining in advance what

should be accomplished and how it should be realized (Mondy).

• Setting goals and defining the actions necessary to achieve those goals

Plan• A blueprint for action: it prescribes the activities

necessary for an organization to realize their goals

Example of a BlueprintTENTATIF PROGRAM KURSUS MOTIVASI PENSYARAH JABATAN PENGURUSAN

PERNIAGAAN UiTM PERLIS

Jumaat (23 Julai 2010)

2.45 pm : Berkumpul di HEA UiTM Perlis untuk menaiki bas ke Jeti

Kuala Perlis.3.30 pm : Menaiki feri ke Pulau Langkawi.4.30 pm : Tiba di Jeti Kuah dan bertolak ke Kondo Istana

(Bas disediakan oleh pihak Kondo Istana).4.45 pm : Daftar masuk penginapan.7.00 pm : Makan malam.8.30 pm : Ceramah Sesi 1.11.00pm : Minum malam.

Purpose & Importance of Planning

Purpose: To ensure that the organization is both effective and efficient in its activitiesImportance:1. Helps to determine what are company’s opportunities2. Planning enables company to identify the course of action3. Without planning much will be left out


Importance:

4. Through plan, resources are efficiently and effectively utilized, resulting in saving resources5. When we plan we know what are we really expected and becoming more meaningful6. It helps to achieve goals and reduces overlapping activities


Importance:7. Planning can provide effective utilization of available facilities8. Planning helps managers to become confident and aggressive leader and can cope with all the problems.9. Planning guides management thinking to future desirable activities and what must be done to attain goals.


Importance:

•Planning provide a foundation for all organizational activities. Through planning, managers coordinate organizational activities so that the goals of the organization can be achieved.


Importance:

•Gives guidance and direction to the members of the organization as to their role in delivering those products and services.•To ensure that the appropriate products and services are offered to its customers.

Benefits of planninga) Better Coordination

• Planning provides a foundation for the coordination of a broad range of organizational activities.

• A plan helps to define the responsibilities of individuals and work groups and helps coordinate their activities.

Benefits of planningb) Focus on Forward Thinking

•The planning function forces managers to think ahead and consider resource needs and potential opportunities or threats that the organization may face in the future.

Benefits of planningc) Participatory Work Environment•Successful planning requires the participation of a wide range of organizational members. The organization benefits by having access to a broad base of experience and knowledge in the planning process.•Organizational members are more likely to “buy in” to a plan that they have helped develop.

Benefits of planningd) Most Effective Control System•An organization’s plan provides a foundation for control of the processes and progress of the company.•The implementation of the plan can be evaluated and progress toward the achievement of performance objectives can be monitored•Controls provide mechanism for ensuring that the organization is moving in the right direction and making progress toward achieve its goals.

Types of planning and goals

Strategic Planning•Long range (3-5 years into the future) planning that focuses on the organization as a whole.•It defines the markets in which the organization competes, what the customers in those markets wants and how the organization will deliver products and services.

Strategic Planning• Set by the Board of Directors and top

management.• The purpose is to move the organization from

where it is to where it wants to be.• Consists of 3 levels: corporate strategy, business

strategy & functional strategyStrategy• A method of shaping a company’s future and

involves determining the long-run direction of the organization

Mission Statement

• “A statement of an organizational fundamental purpose”

• e.g. “Starbuck”- The premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow

Developing Mission Statement• Concise and meaningful

• It must describe the 3 primary aspect of an organization:

1. Product or services2. Targets markets3. Overall strategy for ensuring long-term success

• It must become a natural part of the organization embodied in the minds, habits, attitudes and decisions of everyone in the company every day

Developing Mission Statement

• Defines the organization's purpose and primary objectives. Its prime function is internal – to define the key measure or measures of the organization's success – and its prime audience is the leadership team and stockholders.

• The mission is expressed in writing to ensure that all organization member will have easy access to it and thoroughly understand exactly what organization is trying to accomplish.

Importance of Mission Statement• It sets the strategic direction of an

organization – “ Why we are here” and “ where we are going” .

• It provides a foundation for the development of business strategy

• It determines how well it serves the organizational stakeholders- individuals and group directly affected by an organizational and its accomplishment

Importance of Mission Statement• Helps management increase the probability

that the organization will be successful.• Helps management focus human effort in a

common direction.• Serves as a sound rationale for allocating

resources.• Helps management define broad but important

job areas within an organization & therefore critical jobs that must be accomplished.

Examples of Mission Statements

• Google's mission is to organize the world's information and make it universally accessible and useful.

• Facebook’s mission is to give people the power to share and make the world more open and connected.

• Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

Operational Planning• Focuses on determining the day-to-day activities

that are necessary to achieve the long-term goals of the organization.

• Operational plans are more specific, address shorter-term issues & are formulated by the middle and lower-level managers who are responsible for the work groups in the organization.

• Can be categorized as i)standing plans ii)single-use plans

Standing Plans

• Are used over and over again because they focus on organizational situations that occur repeatedly.

• Ensure that recurring situations are handled consistently over time.

• Consists of policies, procedures and rules & regulations.

Policies• Guidelines that govern how certain organizational

situations will be addressed.• Provide guidance to managers who must make

decisions about circumstances that occur frequently within the organization.

• Eg.: policies concerning sick leave, vacation leave and benefit options, policies about admittance to certain academic programs, an organization may require an employee to be confirmed first

• McD’s policy – will not grant a franchise to an individual who already owns another fast food restaurant.

Procedures

• More specific and designed to give explicit instructions on how to complete a recurring task.

• Eg: the admissions clerk might be told that, when an application is received, he @ she should i)set up an electronic file for the applicant, ii) merge test-score records, transcripts & letters of reference to the electronic file as they are received iii) forward the electronic file to the appropriate admissions director when it is complete.

Rules and regulations

• Strictest types of standing plan.• Provide detailed and specific regulations for

action.• Indicates what an organization member

should or should not do and allows no room for interpretation.

• Eg: No Smoking, rules on the number of sick days an employee may take with pay, wearing formal uniforms every Monday.

Single Use Plans

• Typically use only once because the specific situation to which they apply doesn’t recur.

• Consist of programs, projects and budgets.

Programs

• Single-use plans that govern a relatively comprehensive set of activities designed to accomplish a particular set of goals.

• Outline the major steps and specific actions necessary to implement the activities.

• The timing and sequencing of the efforts of individuals

• Members responsible for each step• Eg:Program Pembangunan Pelajar

Projects

• Less comprehensive and narrower in focus than programs and usually have predetermined target dates for completion.

• Many projects are designed to collect and analyze information for decision-making purposes or to support more comprehensive planning efforts such as programs.

• Short time in nature• Eg: PLUS project, KLCC project

Budgets

• Statements of financial resources set aside for specific activities in a given period of time.

• It details how funds will be spent on labor, raw materials, capital goods, information systems, marketing etc. As well as how the funds will be obtained.

Barriers to Effective Planning

1) Lack of commitment to planning• Top and lower level managers are not committed to the plans

that they have structured

2) Lack of meaningful objectives of goals• Goals that are being established are unclear and unattainable

3) Rely too much on experience• Experience as indicated is likely to be a dangerous teacher

simply because what happened in the past is not likely to fit a future situation.

Barriers to Effective Planning4) Demands on the manager’s time•Some managers may simply be too busy ‘putting out fires’ to take the time to plan properly

5) Ambiguous and Uncertain Operating Environments•Managers who are uncomfortable with ambiguity may find it difficult and frustrating to plan under conditions of uncertainty.

6) Resistance to Change•Organizational members may associate planning with a need to change the way they do their jobs.

Overcoming The Barriers to Effective Planning

1)Learn to apply the managerial functions better•Learn to identify what is really important as opposed to what is urgent but not important•Use well-thought goals, policies, procedures and rules•Delegate authority well•Communicate expectations early

2) Involve employees in decision making•Seek info from employees and keep them informed about expectations•Encourage employees to communicate about the planning efforts of the organization

Overcoming The Barriers to Effective Planning

3) Take advantage of a diversity of views•Diverse views can lead to a broader assessment and evaluation of organizational problems and opportunities , plans that are comprehensive and fully developed.

4) Encourage strategic thinking•Develop an organizational culture that encourages strategic and results-oriented thinking.•Provide training to develop strategic thinking skills and give opportunity to practice the skills in their work environment.•Give reward to employees for thinking strategically when developing their plans.

Documents

CHAPTER 2