Planning

During this session we focused on one of the most important mangerial functions-the ability to plan for both the short and long term.



So what is planning?  Planning can be defined as  'a statement of action to be undertaken by the organisation aimed at helping it achieve its objectives.  There are three main types of planning:

• Strategic planning is for the long term.  This is where the manager has to be able to plan ahead for at least five years.
• Tactical-this planning normally takes place at middle management level.  Tactical plans are plans for the operation of the company between one and five years.  Tactical plans are based on strategic plans.
• Operational-these are plans for the day to day operations of the company.  These plans are normally developed by supervisors or team leaders in the organisation.  

TYPES OF PLANS



These are seven different types of plans.  These are:

• Mission Statement-this identifies the purpose or scope of the organisation.  Have a look at this youtube clip on mission statements http://www.youtube.com/watch?v=CZFv82VsLxE
• Objectives-these are specific aims which usually involve specific time frames.
• Strategies-the aims of strategies is to answer the question 'how are we going to get where we want to go'.  In order to do this the company has to be able to identify its own weaknesses and strengths.
• Policies-are general guidelines.  Guidelines provide direction but managers/employees do not have to follow them. 
• Procedures-these are plans that outline how to handle certain situations.  Procedures often include a list of steps that have to be followed in sequence.  For example, a grievance or disciplinary procedure.
• Rules-these are statements that identify what exmployees can or cannot do when they are working in or as part of the organisation.
• Budgets-a budget is a numerial plan that identify where future allocation and utilisation of resources over a particular time period (i.e. six or twelve months).  A budget enable the manager to control the financial resources of the firm.

MBO
What is MBO?  MBO is management by objectives.  For MBO to work management set performance standards which employees have to meet.  The employee can set their own goals.  Once this is done, employees can sit down with management to discuss their proposed goals.  Over a period of time goals are reviewed and if they are set too high or too low the goals may be modified by management.  There are a number of advantages and disadvantages to MBO which were discussed in the notes.



Corporate planning process
There are a number of stages involved in the corporate planning process.

1. Define corporate objectives
2. External and internal analysis
3. Revision of corporate objectives
4. The formulation of strategic plans
5. Developing tactical plans
6. Implementation
7. Feedback

Next week we will look at the control function.