The Planning Managerial Function and Organizational Objectives

Meaning and Significance of Managerial Planning

• Planning is the process of deciding several key factors before taking action:

  • The way to do a certain activity.

  • What to do.

  • When to do it.

  • How to do it.

  • By what resource to do a certain activity.

• Planning constitutes the act of making decisions today about future actions.

• It involves the selection of missions and objectives and the actions required to achieve them.

• The planning function requires decision-making, which is defined as choosing future courses of action from among various alternatives.

• No real plan exists until a decision—specifically a commitment of human or material resources—has been made.

• Before a decision is produced, all activities are categorized as a planning study, an analysis, or a proposal, rather than a real plan.

Functional Roles and Impact of Planning

• Planning bridges the gap between current circumstances ($where we are$) and a desired future state ($where we want to be$).

• The process identifies goals and alternatives to reach them.

• Planning maps out courses of action that commit individuals, departments, and the entirety of the organization for durations extending through days, months, and years to come.

• Planning is the first managerial function that all managers engage in because it establishes the groundwork for all other following managerial functions.

Types of Plans Based on Repetitiveness

• Plans are classified based on the dimension of repetitiveness into the following categories:

  • Single-use plans: These are used for one-time or specific purposes. Examples include:

    • Budget.

    • Program.

    • Project.

  • Standing plans: These are used for ongoing or recurring activities. Examples include:

    • Policy.

    • Procedure.

    • Standards.

    • Rules.

Types of Plans Based on Time Dimensions

• Plans are categorized by the duration of their time horizon:

  • Long-range plans: These cover a period of $\\ge 5$ years.

  • Intermediate-range plans: These cover a period of $1-5$ years.

  • Short-range plans: These cover a period of $1 \\le \text{less years}$.

Types of Plans Based on Scope and Breadth

• This dimension focuses on the extent of the organizational activities the plan covers:

  • Strategic plans: These are long-term plans that focus on the overall direction of the firm.

  • Tactical plans: These focus specifically on the implementation of the strategic plan.

  • Operational plans: These focus on the performance of day-to-day activities.

Types of Plans Based on Flexibility

• Plans are categorized by their ability to adapt to changing circumstances:

  • Variable plans: These allow for specific adjustments. For instance, the time estimated for a phase of a project might be stated as "$3 \text{ months} \pm 1 \text{ week}$."

  • Alternative plans: Similar to variable plans in that they recognize environmental uncertainties, but the planner sets up $2$ or more entirely separate plans instead of one adjustable plan.

  • Supplementary plans: These are used to reduce the constraining effects of the original plan by providing a prearranged appeal channel.

Organizational Objectives and Their Nature

• The management process begins with the setting of organizational objectives.

• Objectives serve to give meaning and purpose to the organization.

• Objectives determine the scope of future events.

• Objectives determine what action must be taken today in order to obtain specific results tomorrow.

• The Nature and Characteristics of Objectives include:

  • Objectives state end results.

  • Overall objectives need to be supported by specific sub-objectives.