Principles Of Management
HNDPM 1102
Planning
Process of Management
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Decision Making
Controlling Organizing
Problem Solving
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Planning as the Primary Management Function
Organizing
Planning Leading
Controlling
The Two Major Activities involved in
Planning
▪ Setting the Goals and Objectives
Where do we want to be?
▪ Formulating Strategies
How do we reach it?
Planning
Definition 01
Planning is the process of establishing
appropriate goals and formulating suitable
strategies for achieving those goals.
(Stoner and Freeman, 1995)
Planning
Definition 02
Planning is determining the organization's
goals and defining the means for achieving
them.
(Daft,2012)
Hierarchy of Planning
In almost every organisation (whether they are large
or small) the process of planning starts at the very top
level (Corporate level) and trickles down to middle
and lower levels in a very sequential manner.
Hence, the first step of planning is to prepare the
Corporate Plan by the top management for the entire
organisation.
Hierarchy of Planning
• Corporate Level Planning
• Tactical/Functional Level Planning
• Operational Level Planning
Types of Plans in an Organisation
Corporate Level
Board of
Corporate Plan Directors
Tactical Level
Marketing Operations Finance
Department Department Department
Tactical/Functional Plans
P M D L L L F C M
M R M 1 2 3 A A A
Operational Level
Operational Plans
A comparison of types of plans Type of Focus Main Main Major
Plan Responsibility Contents Considerations
Corporate Prepared for Top Corporate Critical SWOT
Plan the entire Managers Vision, factors; Growth
organization Mission potentials of
usually for Corporate Business, markets
long term and products.
Strategies,
periods. Assumptions
Corporate
3-5 years. regarding the
Policies micro and macro
environment
variables.
A comparison of types of plans Type of Focus Main Main Major
Plan Responsibility Contents Considerations
Tactical/ Prepared for Middle level Functional Contents of the
Functional each Functional objectives, Corporate
Plan Functional Managers Functional Plans.
level strategies,
Department Functional Departmental
usually for 6 policies issues
months to 1
year
Operational Prepared for Lower Level Programmes, Contents of the
Plan each Operational procedures, Functional
Operational Managers activities, plans.
level Units schedules,
usually for budgets, Operational
1 month to rules, issues
3 months regulations,
work
instructions
Types Tactical/Functional Plans
• Marketing Plan
• Production/Operational Plan
• Human Resource Plan
• Information Systems Plan
• Financial Plan
Operational Plans
Plans that provide the details needed to implement
the strategies into day to day operations. The
contents include:
▪ Programmes ▪ Schedules
▪ Procedures ▪ Budgets
▪ Activities
▪ Rules, regulations and
work instructions
Sequential Steps in preparing an effective
Corporate Plan
▪ Set the future in terms of Vision and Mission.
▪ Analyze and understand the Business Environment – The SWOT
analysis.
▪ Establish Goals and Objectives
▪ Develop and Select the best Strategies.
▪ Decide how the selected strategies could be successfully
implemented.
▪ Decide how to evaluate the effectiveness of the implemented
strategies (Monitoring and Reviewing).
The Process of Corporate Planning
Set the future in terms of Vision & Mission
Environmental Analysis
Internal External
Favourable Strengths Opportunities
Unfavourable Weaknesses Threats
Determine the Corporate Goals and Objectives
Formulate Corporate Strategies and Policies
Prepare Tactical/Functional Plans
Prepare Operational Plans
Hierarchy of Aims
Vision
Mission
Goals
Corporate Objectives
Tactical Objectives
Operational Objectives
Decide where the organization should be in “x” number of years
What is a Vision?
Vision is the ultimate aim and the
desired organizational dream the
founder/leaders/top executives wish
to realize in the very long run.
Vision
A Colourful
dream
of the future of
the business,
deeply embedded
in the founder’s
mind.
Vision
Vision is similar to a lighthouse
that gives direction
rather than
a destination.
Vision – Sri Lanka Telecom
All Sri Lankans seamlessly
connected with world-class
information,
communication and
entertainment services.
(http://www.slt.lk/data/aboutslt/aboutslt.htm)
Vision – Sony
To create exciting new digital
entertainment experiences for
consumers by bringing together
cutting-edge products with latest
generation content and services.
Vision of the World Food Programme
A world in which every man,
woman and child has access at
all times to the food needed for
an active and healthy life.
(http://www.wfp.org/faqs)
Translating your Vision into a
Mission
Mission is the tangible and operational component
of the Vision. In other words it is the clearly
explicit future of the Vision.
What is a Mission?
Mission is the fundamental,
unique purpose that sets a
business apart from other
firms of its type and
identifies the scope of its
operations in terms of
businesses, markets products
and technologies.
Mission – Sri Lanka Telecom
“Your trusted and proven partner for
innovative and exciting communication
experiences delivered with passion, quality
and commitment”.
(http://www.slt.lk/data/aboutslt/aboutslt.htm )
Mission – Sony
Sony is committed to developing a wide range of
innovative products and multimedia services that
challenge the way consumers access and enjoy
digital entertainment. By ensuring synergy
between businesses within the organisation, Sony
is constantly striving to create exciting new worlds
of entertainment that can be experienced on a
variety of different products.
From Mission to Goals
To successfully realize the Mission, the
Mission should to expressed in clear
and specific fairly long term financial
and non-financial goals addressing
each priority areas mentioned in the
mission statement.
Environmental Analysis
In order to establish the goals and
related strategies, an organisation
need to analyze and understand its
current position in term of
Strengths, Weaknesses,
Opportunities and Threats.
Goals
General statements of future aims which
represent the main core areas of
operations in the mission.
Goal – Sri Lanka Telecom
To become a 4 Billion Rupee
company by the year 2015.
Goals
Become a 125 billion company by the year
2000 (Wal-Mart, 1990)
Yamaha wo tsubusu We will destroy
Yamaha (Honda, 1970)
Crush Adidas (Nike, 1960s)
Transform this company from a defense
contractor in to the best diversified high
technology company in the world
(Rockwell, 1995)
From Goals to Objectives
To successfully achieve the set long term
goals, the goals should be further
expressed in clear, specific, measurable,
medium to short term quantifiable
objectives.
Objectives
▪ What is intended to achieve within a defined
medium to short period of time
▪ Expected measurable end results or aims of
action
▪ Act as yardsticks to measure performance
Characteristics of Objectives
▪ Specific
▪ Measurable
▪ Achievable
▪ Realistic
▪ Time Bound
Hierarchy of Objectives
Corporate Objectives
Tactical Objectives
Operational Objectives
Hierarchy of Objectives
Corporate Objectives
-To increase the ROI annually by 12%-
Tactical Objectives
To increase the sale of Product X by 20%
within the next 6 months
Operational Objectives
To increase the awareness of Product X by 50%
within the next 3 months
Areas for which Corporate Objectives can be set
▪ Market Standing
▪ Innovation
Corporate ▪ Productivity
Objectives
Can be
▪ Physical and Financial Resources
established ▪ Profitability
in these Key ▪ Manager Performance and
Results
Development
Areas (KRA’s)
▪ Worker Performance and
Attitudes
▪ Public Responsibility
(Peter Drucker)
Strategy
• The broad programme for achieving an organization’s goals
and it’s mission. (Stoner & Freeman,1995)
• A comprehensive plan for accomplishing an organization’s
goals. (Griffin, 2012)
Decide what is the best way to achieve the aims.
Hierarchy of Strategies
Corporate Level Strategies
Functional Level strategies
Operational Level Strategies
Policies
A Policy is a general guideline
for decision-making.
Benefits of Planning
▪ Provide a sense of direction
▪ Facilitate successful growth
▪ Set up the guidelines for action
▪ Reduces uncertainty by anticipating change in
advance
▪ Helps motivate people
▪ Provide the basis for controlling
▪ Provides the basis for other managerial functions
▪ Provides the basis for coordination
▪ Facilitates efficient and effective use of resources
Barriers for Planning
▪ Uncertainties in the environment
▪ Lack of environmental sensitivity
▪ Lack of knowledge and skills in planning
▪ Lack of experienced personnel
▪ Lack of creativity and imagination
▪ Lack of cooperation
▪ Lack of top management commitment
▪ Lack of leadership
▪ Lack of facilities and resources
▪ Negative attitude towards planning
