Objectives:

1. Discuss the nature of planning;

2. Compare and contrast the different types of
plan;
3. Describe planning at different levels of the firm
4. Apply appropriate planning techniques and
tools;and
5. Formulate a decision from several alternatives.
 Lesson-1
Definition and Nature of Planning
The Importance of Planning;
Planning is the first management function and very Essential
component of Management.
● Planning provides direction to all of the organization’s human
resources both managers as well as employees.
● Planning is important because it reduces uncertainty;it compels
managers to consider future events that may affect their
company.
● Minimizing of wastes will result if there is proper
coordination of activities due to planning; negative
practices, ineffectiveness, and inefficiencies could be
easily detected and can be corrected or eliminated.
● Establishing, goals and standards during planning may
be used for controlling, another necessary managerial
function.
● Without planning, goals and standards will be absent
and controlling will not be possible.
 Definition of Terms
Planning-is a process that involves the setting of the organization’s
goals, establishing strategies for accomplishing those goals,and
developing plans of action or means that managers intend to use to
achieve organization goals.
Goal-setting-the identification of targets or desired ends that management
want to reach.
Vision-a mental image of what the organization will be in the future, as
desired by the company management and employees.
Mission-basic purpose of an organization and range of their operations.
 Relationship of Planning to Individual
and Organizational Performance

IS there a clear relationship between planning and

performance? Although numerous researchers
have shown a generally positive relationship
between planning and performances, it would not
be advisable, however, to judge that organization
or individuals who formally plan have better
performance compared to those who do not plan.
 Lesson-2
Types of Plans
Organizational plans-can be generally described in terms of
comprehensiveness, length of time frame, specificity, and frequency
of use.
Comprehensiveness- refers to the completeness of planning
coverage; for example:it may start from plans that cover the entire
organization, called strategic plans, up to operational area only.the
more comprehensive plan is, the better, as this could completely
guide both the employer and employee toward the fast achievement
of company goals.
Specificity-refers to very detailed, clearly defined
plans wherein objectives are clearly stated and could
easily be understood. Simple language must be used
in order to facilitate understanding of the plan.

Frequency-of use refers to the number of times or

instances a plan may be used. For example, strategic
plans have single use, while operational plans are
usually standing or are used frequency or for several
times.
Strategic plans-plans that establish the
organization’s overall goals and apply to the entire
firm; they are broad in scope and are the
responsibility of the CEO, president, and general
manager of the company.
Operational plans-plans that apply to a particular
unit area only; their scope is narrow; achievement
of company goals may not be achieved if
operational plans are not clear.
Long-term plans- plans that go beyond three
years; everyone must understand the organization’s
long-term plans to avoid confusion that may divert
the organization member’s attention.
Short-term plans- plans that cover one year or
less; such plans must lead toward the attainment of
long-term goals and are the responsibility of the
unit/department heads.
Directional plans- plans that are flexible or
give general guidelines only; although flexible
and general, these plans must still be related to
the strategic plans.
Specific plans- plans that are clearly stated and
which have no room for interpretation;
language used must be every understandable.
Single-use plans- plans used or stated once
only as this applies to the entire organization;
refer to the operational plans of the film.
Standing plans- plans that are ongoing;
provide guidance for different activities done
repeatedly; refers to the identified activities
of operational plans.
 Lesson-3
Planning at Different Levels in the Firm

Different levels in the firm are all engaged in

planning however, all the resulting plans must
be related to one another and directed
toward the same goals.Planning at the
different levels of management include
strategic planning, and operational planning.
 Top-level Management Planning
(Strategic Planning)
As earlier mentioned, top-level managers are
responsible for the organization’s strategic
planning which involves making decision about
the organization’s long-term goals and
strategies.CEOs, company president or the
organization’s senior executives develop and
execute the said strategic plan.
 Middle-level Management Planning
(Tactical Planning)
Tactical planning refers to a set of procedures for
changing or transforming broad strategic goals
and plans into specific goals and plans that are
applicable and needed in one unit/portion of the
organization. It is focused on major actions that
must be done by a unit in order to contribute its
share for the achievement of the strategic plan.
 Frontline/Lower-level Management Planning
(Operational Planning)
Operational planning involves identifying the
specific procedures and processes required at
the lower-levels of the organization.
This also involves routine tasks or tasks
repeatedly done by the organization’s lower
level units.
 Integrating Strategic,Tactical,
And Operational Planning
The present organizational planning is not as rigid
as the hierarchical planning earlier discussed in this
chapter.Managers in different hierarchical levels of
the organization may contribute their ideas or
suggestions in developing the strategic plan, a task
originally assigned to the senior executives.
 Lesson-4
Planning Technical and Tools
And their Applications
For effective planning in today’s dynamic
environment, different techniques and tools must be
used such as forecasting, contingency Planning,
scenario planning, benchmarking, and participatory
planning. According to Schermerhorn (2008),
forecasting, is an attempt to predict what may happen
in the future.
All planning types,without exception, make
use of forecasting.business periodicals
publish forecasts such as employment and
unemployment rates, increase or decrease
of interest rates, stock market data,
GNP/GDP data, and others. Forecasts used
may either be quantitative or qualitative.
 Definition of Terms
Trigger point- Change in an attribute, condition, factor,
parameter, or value that represents crossing a threshold and
actuates or initiates a mechanism or reaction that may lead to a
radically different state of affairs.
Forecasting- an attempt to predict what may happen in the
future.

Benchmarking- planning technique that involves comparison of

company’s practices/technologies with those of other
companies.
 Lesson-5
Decision-Making
All managers and workers/employees in
organizations make decisions or make choices
that affect their jobs and the organization they
work for. Lesson focus in how they make
decisions by going through the eight steps of the
decision-making process suggest by Robbins and
Coulter (2009).
 Types of Decisions
Structured or programmed decision- a decision
that is repetitive and can be handled using a
routine approach. Such repetitive decision applies
to resolving structured problems which are
straight forward, familiar, and easily defined. For
example, a restaurant customer complains about
the dirty utensils the waiter has given him.
Unstructured or nonprogrammed decisions-
applied to the resolution of problems that are new or
unusual, and for which information is incomplete. Such
nonprogrammed decisions are described to be
unique,nonrecurring and need custom-made decisions .
For example, a hotel manager is asked to make a
decision regarding the building of a mew hotel branch in
another city to meet the demands of businessmen
there.
 Types of Decision-making Conditions

Certainty conditions- ideal conditions in deciding problems;

these are situations in which a manager can make precise decisions
because the results of all alternatives are known. For example,
bank interests are made known to clients so it is easier for business
managers to decide on the problem of where to deposit their
company’s funds.
Risk or uncertainty conditions- a more common
condition in deciding problems. Risk or
uncertainty conditions compel the decision
maker to do estimates regarding the possible
occurrence of certain outcomes that may affect
his or her chosen solution to a problem.
Historical data from his or her own experiences
and other secondary information may be used as
basis for decisions.
 Definition of Terms
Decision-making- is a process which begins with
problem identification and ends with the evaluation of
implemented solutions.

We have 8 steps according to

Robbins and Coulter :
Step 1. Identify the Problem
Step 2. Identify the Decision Criteria
Step 3. Allocate Weights to the Criteria
Step 4. Develop Alternatives
Step 5. Analyze the Alternatives
Step 6. Select an Alternatives
Step 7. Implement the Chosen Alternatives
Step 8. Evaluate Decision Effectiveness