Chapter 2 PLANNING By Nasser A Kadasah Chapter

Chapter 2 PLANNING By : Nasser A. Kadasah

Chapter 2 will cover: 2. 1 Characteristics of planning 2. 4 Types of Plans 2. 8 Corporate Planning

Planning Process What kind of organization structure to have Which helps us know Plans Objectives and how to achieve them What kind of people we need and when Which affect the kind of leadership we have and direction How most effectively to lead people In order to ensure success of plans By furnishing standards of control

2. 1 characteristics of Planning S Closely associated with goals: ¥ Implicit ¥ Explicit S Concerned with forecasting of future. S Involves the selection of the best among several alternatives. S Comprehensive & required in every aspect of the organization.

2. 4 Types of Plans 2. 4. 1 Objectives 2. 4. 3 Strategies 2. 4. 5 Rules 2. 4. 7 Projects 2. 4. 2 Policies 2. 4. 4 Procedures 2. 4. 6 Methods 2. 4. 8 Budgets

2. 4 Types of Plans S Consist of several individuals plans or components: ¥ Standing plans: Objectives, Policies, Strategies and Procedures. ¥ Single-use plans: Budgets, Targets and Quotas. Difference: standing plans used over along period of time while single-use used for specific time.

2. 4. 1 Objectives S Broad objectives: States the purpose of the entire organization. S Objectives: Set by the Management and the first step in planning. ¥ Serve as reference point for the efforts of the organization.

2. 4. 2 Policies S General statements or understanding. S Provides guidelines in decision- making by subordinates. S Might be in: ¥ Explicit declaration in writing. ¥ To be interpreted from the behavior of the organization members.

2. 4. 3 Strategies S Plans that take organization from a given position to another position. S The purpose of competitive strategy is to encounter the forces of competitors.

2. 4. 4 Procedures S Include how each of its tasks take place, when and by whom. S Once procedure is established it can be used over again.

2. 4. 4. 2 Characteristics of Good Procedures…(1) S Based on facts: should be based on adequate facts of the particular situation. NOT: Guesses or Wishes. S Procedure as a system: must be organized as a system of interrelated activities in a network.

2. 4. 4. 2 Characteristics of Good Procedures…(2) S Well-Balanced: Between STABILITY & FLEXABILITY. S Updating Procedures: continuous review of the procedures & may be ELEMINATE unnecessary ones.

2. 4. 4. 2 Characteristics of good procedures…(3) S Minimize procedures: should be kept at the minimum possible, WHY: ¥ Costs money. ¥ Takes time. ¥ Paper handling. ¥ Delay.

2. 4. 5 Rules S Definition: A specific guide for action, established authoritatively and utilized in order to: ¥ Inform employees of conditions under which designated actions are to be taken or activities are to be performed.

2. 4. 6 Methods S Is a step of a procedure. S Definition: prescribed manner for performing a given task with adequate consideration to: ¥ Objective ¥ Facility ¥ Total ¥ Effort expenditure of time & money

2. 4. 7 Projects S It’s a program. S Definition: a type of plan which can be thought of in terms of planned actions integrated into a unit and designed to bring about a stated objective.

2. 4. 8 Budgets S Express organization & departmental objectives in: Financial ¥ Non financial quantities. ¥ S Examples: ¥ ¥ ¥ Production Budget Purchasing Budget Materials Budget Sale Budget Advertising Budget Personnel Budget

2. 8 Corporate Planning 2. 8. 1 Characteristics of Corporate Planning 2. 8. 2 Corporate Objectives 2. 8. 3 Importance of Corporate Planning 2. 8. 4 Process of Corporate Planning

2. 8 Corporate Planning S The process of determining the major objectives of an organization & policies & strategies that will govern the acquisition & use of resources to achieve those objectives. S Concern with the overall shape of the organization and changes may take many years.

2. 8. 1 Characteristics of Corporate Planning S Deals with formulation of Objectives, Plans, Policies and Strategies. S Deals with future impact of current decisions. S Involves identification of Opportunities and Threats and matching them with strengths and weaknesses of the organization.

2. 8. 2 Corporate Objectives S Allocation of scarce resources. S Adopts to environmental opportunities and threats. S Coordinates activities to reflect strengths and weaknesses. S To learn from the outcome of past strategic decisions so as to make better decisions in future.

2. 8. 3 Importance of Corporate Planning S Encourages the habit of forward thinking by manager. S Helps in attaining overall coordinate of levels of the organization. S Creates great awareness of environment. S Enables the organization to anticipate technological changes. S Leads to improvement in overall performance of the organization.

2. 8. 4 Process of Corporate Planning…(1) S Scanning the environment: ¥ Economical, Social, Cultural, Political etc. S Making corporate appraisals: ¥ To identify: strengths and weaknesses. S Determining of mission and objectives. S Making strategies: ¥ Choosing an appropriate strategy after evaluating alternatives.

Process of Corporate Planning…(2) S Developing of action plans: ¥ Corporate planning should be broken into policies, programs, budgets etc. S Implementing the strategy.