MANAGEMENT FUNCTION - PLANNING

PLANNING

Planning is the process of thinking about and organizing the activities required to achieve a desired goal. Planning involves the creation and maintenance of a given organizational operation. This thought process is essential to the refinement of objectives and their integration with other plans. Planning combines forecasting of developments with preparing scenarios for how to react to those developments. An important, albeit often ignored, aspect of planning is the relationship it holds with forecasting. Forecasting can be described as predicting what the future will look like, whereas planning predicts what the future should look like.

Planning is also a management process, concerned with defining goals for a company’s future direction and determining the missions and resources to achieve those targets. To meet objectives, managers may develop plans, such as a business plan or a marketing plan. The purpose may be achievement of certain goals or targets. Planning revolves largely around identifying the resources available for a given project and utilizing optimally to achieve best scenario outcomes.

Planning is not just a type but it comes in many types. Some of them are:

1.Strategic planning is an organization’s process of defining its strategy or direction and making decisions about allocating its resources to pursue this strategy. To determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action. Generally, strategic planning deals with at least one of three key questions:

• What do we do?
• For whom do we do it?
• How do we excel?

The key components of strategic planning include an understanding of the firm’s vision, mission, values, and strategies.

2.Tactical planning is short range planning emphasizing the current operations of various parts of the organization. Short Range is generally defined as a period of time extending about one year or less in the future. Managers use tactical planning to outline what the various parts of the organization must do for the organization to be successful at some point one year or less into the future. Tactical plans are usually developed in the areas of production, marketing, personnel, finance and plant facilities. Because of the time horizon and the nature of the questions dealt, mishaps potentially occurring during the execution of a tactical plan should be covered by moderate uncertainties and may lie closer to the control of management than strategic ones. Those mishaps, in conjunction to their potential consequences are called “tactical risks”.

3.Operational planning is the process of linking strategic goals and objectives to tactical goals and objectives. It describes milestones, conditions for success and explains how, or what portion of, a strategic plan will be put into operation during a given operational period.

An operational plan addresses four questions:

• Where are we now?
• Where do we want to be?
• How do we get there?
• How do we measure our progress?