Grade 11 – GAS 2 ORG. MAN.

3.1 The Nature of Planning

Understanding the Concept of Planning

Planning features a broad range of ideas and principles that may be applied to various business
situations. Planning is the initial action needed to achieve business success

Planning has two basic components: goals and action plans.

Goals represent the target and results that the organization hopes to attain.

Action plans are the strategies and steps the company takes to realize its goals.

● An action plan also follows the SMART criteria and are based on the key performance indicators
of the goal.

Definition of Planning from Different Individuals:

1. The notion of planning proposed by Weihrich and Koontz refers to the involvement of the
chosen mission and objectives which serve as the basis of the best alternative set of actions
that can be beneficial in the future.
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2. Newman’s idea of planning considers the importance of preparing for what might happen in
the future.
3. The idea of planning stated by Henri Fayol focuses on the process of creating strategic
procedures to ensure the effectiveness of a certain managerial performance.

Characteristics of Planning:

1. Planning is goal-oriented. It refers to the process of achieving goals and organizational

objectives.

2. Planning is a rational process. The planning process requires creative thinking, analytical
reasoning, Planning is forward-looking. Planning is also an activity in foreseeing possibilities.
Organizations do not only plan for existing goals.

3. Planning is a primary function. Planning is the initial activity performed within the organization.

4. Planning is all-pervasive. The scope and nature of planning permeates all levels of the
management. As observed in the earlier discussion, the execution of different phases of
planning is delegated to a specific level of management.

5. Planning is continuous process. Planning should be never ending. As long as the company exists,
managers continuously decide, brainstorm, and identify the strengths, weaknesses, threats and
opportunities of the business.
 6. Planning is an integrated process. Planning is done in consideration of the internal and external
environment of the organization.

7. Planning involves choice. Perhaps the most important part of planning is decision making.

Significance of Planning

1. Focuses on the organizational objectives - One of the importance of planning is it focuses on

the organizational perspective.

2. Reduces uncertainties and risks -It is one of the benefits that the manager and business
leaders may experience.

3. Provides a sense of direction -A strategic plan provides a pathway from the top level to lower
level of management.

4. Provides guidelines for decision making - Planning gives an opportunity to productively

supervise subordinates, provide the right instruction, and set the direction for specific tasks.

5. Ensures better coordination - The purpose of planning is to ensure the effective and efficient
coordination of the workforce.

6. Facilitates Control - Task divisions and job performance of the employees can be controlled or
properly monitored by having a well–structured plan.

7. Encourages innovation and creativity - Planning exhibits the creative skills of the employees
and top management.

Planning is the process of thinking about the activities required to achieve a goal. It is the foundation
of all managerial functions.

The products of planning are the evaluation of past performance, identification of goals, and the
formulation of action plans. Although related, goals and action plans refer to different things.

● Effective planning is a group and data-driven process. It involves cognitive thinking and logical
reasoning.

● Planning is an essential part of the business process as it focuses on organizational objectives,

reduces uncertainties and risks, and provides a sense of direction and guidelines for decision
making.

● Planning also makes business efficient by ensuring better coordination, thus facilitating
control. Lastly, it encourages innovation and creativity amongst the organization’s members.
Lesson 3.2:

Management Function

● Planning is one of the functions of management that sets the direction for the company. This
includes short-term and long-term plans.

● Types of Planning:
1. Strategic Plans - It is a type of plan which establishes long-term (usually three to five
years depending on the type of industry) strategies based on the company’s vision,
mission, and corporate values.

The top management and key stakeholders of the company are usually included in
developing a strategic plan.

Strategic plans covers the external analysis of the industry and internal analysis of the
company.

Below are the primary inputs needed before strategic planning:

Vision - This refers to what the company foresees its success in the future.
Mission - It is defined as a point of action to reach its vision.

2. Tactical Plan
This is a short-term plan that is usually implemented within a year or less.
A tactical plan includes the objectives and strategies for each business function to meet
the goals stated in the strategic plan.
3. Operational Plan
The operational plan is a short-term plan that describes the objectives and strategies
based on the day-to-day activities in the tactical plan.
It includes key performance indicators (KPIs) and specific courses of action to achieve the
tactical goals.

Single-Use Plans are task-specific plans that are used for unusual or one-time business
situations.

Standing Plans are plans that are used for the regular activities of the organization.

4. Contingency Plan -A contingency plan aims to provide a set of preparations for the
upcoming risks and uncertainties that may be encountered by the company.
 Lesson 3.3 Management and Its Levels of Planning

What is strategic planning?

● Focused on the organization’s general objectives
● High-level overview of the entire business
● Guide managers in decision-making
● Directional and forward-looking
● Robust but flexible
● Focuses on the achievement of the organizational goals
Components of Strategic Plan:
1. Vision - Declaration of the company’s short-term or long-term goals. Affirmation of a
company as to what they want to become
2. Mission
Declaration of the company’s purpose
realistic overview of the company together with its aim and ambitions
3. Values
Guide the managers and influence the kind of employees the organization hires
A living document that grows within the organization, and dictates the future of the
organization.
What is tactical planning?
● Translates the strategic plan into tactics
● Breaks down the mission statement into actionable chunks
● This plan describes the tactics to be used by the organization to achieve its outlined goals and
ambitions in the strategic plan.
● Tactical plan responds to the question “How?”.
Components of Tactical Plan
1. Specific Goals with Fixed Deadlines
Formulate goals that have fixed deadlines to stimulate action.
2. Budgets
The tactical plan also includes budgetary requirements.
Examples of this are the organization’s budget for hiring personnel, marketing, sourcing, and
manufacturing.
3.Resources
Resources required to achieve the organizational aims
Examples of this are human resources and financial resources
4.Funding
Company strategies and activities that require funding
Activities aligned with the goals in the strategic plan
 What is an operational plan?
● Serves as the roadmap for day-to-day activities to carry out the strategic plan and to achieve the
tactical goals
● This is highly specific. It can be either single-use or ongoing.

Types of Ongoing Plans:

● Policy - General document that guides the managers

● Rules - Specific regulations in an organization

● Procedures - Processes as to how a particular objective should be accomplished

Lesson 3.4 What are planning techniques?

The methods followed by planners or management to prepare or evaluate their plans,

programs, and policies

Used to assess the environment and allocate resources, and for the changing business
conditions

Techniques in Assessing the Environment:

● Environmental Scanning

Gathering and screening of information

Information can be gathered in internal and external environments.

● Forecasting

Helps managers predict future events

 There are two types of forecasting techniques:, qualitative forecasting and quantitative
forecasting.

● Benchmarking

Helps managers predict future events

There are two types of forecasting techniques:, qualitative forecasting and quantitative
forecasting.

Searching the best practices among competitors and noncompetitors

There are two types of benchmarking: the internal benchmarking and external benchmarking.

Techniques in Allocating Resources:

● Budgeting

Used to create a numerical plan for allocating resources

Resources are allocated for specific activities.

Aside from finances and physical expenditures, person’s hours, working capacity, and units of
production can be budgeted.

● Scheduling

Used to identify the activities to be done in order

Used to identify the individuals responsible for each task and what is the expected time for
the tasks to be completed

● Break-Even Analysis

A resource allocation technique

Used to determine the break-even point

The break-even point is where the total revenue is equal to the total cost.
 Contemporary Planning Techniques:

● Project Management

Used by managers to accomplish the collaborative activities with fixed deadlines.

The activities are called projects.

It is an effective technique to finish the work on time.

● MOB and SMART Goals

Management by Objectives is used by managers to set clear and defined goals where
individual goals are aligned with corporate objectives.

SMART Goals is used to define goals and assess their feasibility. It is often paired with MOB.

● Contingency Planning

Used by managers to identify possible alternative courses of actions

A plan to be used when the initial plan failed due to some unforeseen or changing
circumstances

● Scenario Planning

Long-term version of contingency planning

Identifying future scenarios and planning courses of action with each scenario that may arise

● Participatory Planning

A technique where individuals who will be affected and who will implement the plans are
included in the planning

Enables organization to be more engaged and creative

It increases understanding and acceptance of plans and commitment to implement and

achieve cited goals.

What are planning tools?

● Used in planning to facilitate the effective goal-setting and decision-making

● Used by management to address changes in the organization;

● For projects, these are used to analyze the current situation and narrow down choices
in decision-making.

Planning tools:
● SWOT Analysis

● Gap Analysis

● Single Frequency Count

● Flowchart

● Gantt Chart

● Activity Network Diagram

● Plan-Do-Check-Act Cycle

A SWOT Analysis is used by organizations to organize its strengths and

weaknesses together with its opportunities and threats.
 A Gap Analysis is used to determine the gap between the present situation and a desired
future state.

Single Frequency Count

● Allows managers to determine the problems that need to be prioritized

● Those which will receive the most votes will be the first issue to be resolved.

Flowchart

● Puts key processes in symbolic patterns that individuals in the organization can easily
understand

● Every symbol represents relationship sequences between and among different tasks.

A Gantt Chart visually shows the schedules or when tasks or jobs are supposed to be done.
● For effective goal setting and decision-making, planning tools play a vital role.
Managers use these tools together with the planning techniques to address the need
brought by the change in the business environment, to analyze the current situation of
the organization, and to narrow down choices in decision-making.