TOPIC 2

PLANNING
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Content outline

1 2 3

Planning in Organization The Types of Planning Common Planning Tools

The Stage of Planning Cycle

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PLANNING IN
ORGANIZATION
“Planning is a fundamental function of
management that involves setting objectives
and determining the course of action to
achieve them. It provides direction, reduces
uncertainty, minimizes waste, and sets
standards for controlling.”
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Mission
● The organization's fundamental purpose and reason for existence. It defines what the organization does,
whom it serves, and how it serves them.
● A clear mission statement provides direction and helps align strategies with the organization's core
purpose.

Vision
● A forward-looking statement that describes what the organization aspires to become in the future.
● It serves as a source of inspiration and guides strategic planning by providing a clear picture of the
desired future state.

Values
● The core principles and beliefs that guide behavior and decision-making within the organization.
● Values influence organizational culture and help ensure that actions align with the organization's ethical
standards and long-term objectives.
 Types of Planning
1
Organization
Top Line Mission
Manager Strategic
Organization Planning
Goals

Organizational
Objectives 2
Middle Line Tactical
Manager Divisions Objectives Planning

Functions Objectives
3
Department Objectives
First Line Operational
Manager Planning
Individual Objectives
 1. Strategic Planning

Strategic planning involves setting long-term goals and objectives for an organization and
selecting suitable actions to allocate resources in order to achieve these goals. Strategic
planning is conducted for a period of more than five years.
Important components of a strategic plan are vision, mission, and value.
“Strategic plans are all about why things need to happen”

Also known as long-term planning. Involve setting long-term goals and objectives for an
organization and selecting suitable actions to allocate organizational resources in order to
achieve these goals

Example: The Chief Executive Officer of a company in Malaysia plans to produce a hybrid car
in three years’ time (strategic planning). Based on this strategic goal, managers and their
subordinates must take suitable plans for their own departments.
Directly influences tactical planning and operational planning
 2. Tactical Planning

Tactical planning is performed by middle-line managers or tactical managers to achieve goals set at
the strategic level. This type of planning involves a shorter period of time, i.e. between one and five
years. It is also known as Mid-term planning.
“Tactical plans are about what is going to happen”

Perform by middle line manager or tactical manager.

There are many focused, specific, and short-term plans, where the actual work is being done, that
support the high-level strategic plan.

Example: A marketing manager plans several procedures to increase the sales of the company’s
automobiles during the festive seasons.
 3. Operational Planning

Operational planning involves a small or specific scope such as job units or individuals in the
organization. This type of planning provides specific guidance on the roles and responsibilities of
the relevant parties in the organization in achieving operational goals, based on the
implementation of strategic and tactical planning.
“Operational plans are about how things need to happen”

Operational planning is performed for a time duration of one year or less. This type of planning
is also known as a short‐term planning.

Planning typically describes the day-to-day running of the company.

Involve a small or specific scope such as a job unit or individuals in an organization.
Developed and determined by first-line managers.

Operational planning can be divided into two types of frequency:

❑ Single-use plan
❑ Standing plan
Single-Use Plan Standing Plan (Ongoing Plan)
Address only the current period or a specific Carry forward to future periods and are change as
problem necessary

A one-time plan specifically designed to meet the Plans that are ongoing and provide guidance for
needs of a unique situation activities performed repeatedly

Concentrates on the implementation of activities to Manager do not have to make unique decisions
overcome complex problems already addressed in organizational policies

For instance, when Walmart wanted to expand the Saved time because manager know in advance how to
number of its stores in China, top-level executives tackle common work situations
formulated a single-use plan as a guide.

Implemented once and not be repeated It consists of three types of plans:-

Implement in a short duration of time ❑ Policies
A single-use plan can be divided into three types:- ❑ Procedures and
❑ Program ❑ Rule
❑ Project and
❑ Budget
 Major Types of Single-use and Standing Plans
Single-use Planning Standing Planning
Programme Policy
❑ Plans for attaining a one-time organizational goal. ❑ Broad in scope-general guide to action plan.
❑ Major projects/ programmes that may take several years to complete. ❑ Based on organization’s overall goals/ strategic plans.
❑ Large in scope; may be associated with several projects. ❑ Defines objective plans within which to make decisions.
❑ Examples: National Economic Programme Mass Transit Transportation. ❑ Examples:
▪ Drug-free workplace policies.
▪ Sexual harassment policies.
▪ Continuous improvement ISO.
▪ 5 S policies in the government departments.
Project Rule
❑ A set of plans for attaining a goal. ❑ Narrow in scope.
❑ Smaller in scope and complexity than a programme. ❑ Describe how a specific action is to be performed.
❑ Often a part of a larger programme. ❑ May apply to specific settings.
❑ Examples: ❑ Examples;
▪ Introducing Advance Diploma courses ▪ No smoking rule in certain areas of the plant where hazardous
▪ ‘Hari Bersama Rakyat Sekitar Bandaraya’ materials are stored.
▪ Wear proper work attire when handling machinery.
Budget Procedure
❑ A quantitative/ financial statement prepared prior to the defined time of ❑ Sometimes called a standard operating system.
period. ❑ A precise series a steps to attain certain objectives.
❑ Details how funds will be spent to achieve an objective/goal, as well as how the ❑ Examples:
funds will be obtained. ▪ Procedures for issuing refunds.
❑ Provides a standard of comparison with the result actually achieved during a ▪ Procedures for handling employee or promotion.
given time period.
❑ Examples: Sales budget or Finance Budget.
 Difference Between The Types Of Planning

Performed By Which
Type Of Plan Organizational Scope Examples Time Frame Level Of Detail
Management Level

Strategic
> 5 years

Tactical
1 to 5 years

Operational
1 year or less
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COMMON PLANNING TOOLS

01 02 03
ASSESSING THE ENVIRONMENT ALLOCATION RESOURCE CONTEMPORARY PLANNING
TECHNIQUE

● BUDGETING & FINANCIAL PLANNING ● SCENARIO PLANNING

● SWOT Analysis ● CONTINGENCY PLANNING
● PESTEL Analysis ● HUMAN RESOURCE ALLOCATION
● TIME & OPERATIONAL RESOURCES ● ROLLING FORECASTS & ROLLING
BUDGETING
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01 ASSESSING THE ENVIRONMENT

This step involves analyzing external and internal factors that

influence organizational success:

EXTERNAL INTERNAL ENVIRONMENTAL TOOL : SWOT

ENVIRONMENT ENVIRONMENT SCANNING
Assess the organization’s Ongoing scanning helps Internal and external factors
Macro-level: Economic conditions,
strengths and weaknesses managers watch for emerging are combined in a SWOT
government policies,
in areas like core threats (e.g. disruptive matrix to inform strategy.
technological trends, sociocultural
competences, financial technologies) or opportunities
shifts, ecological concerns, and
health, organizational (e.g. new markets).
demographic trends . S- Strengths
culture, leadership, and
operational processes. W - Weaknesses
TOOL : PESTLE O - Opportunities
P - Political T - Threats
E - Economic
S - Social
T - Technological
L - Legal
E - Environmental
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02 ALLOCATION RESOURCE

TIME &
BUDGETING & HUMAN RESOURCE
OPERATIONAL
FINANCIAL PLANNING ALLOCATION
RESOURCES
Translating strategy plans Deciding who works on what
into financial terms projects, based on skills, availability,
and strategic priorities Scheduling workflows, capital
Example, revenue targets,
expenditures, technology
investment budgets.
investments, and facility use.
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03 CONTEMPORARY PLANNING TECHNIQUE

ROLLING FORECASTS
SCENARIO PLANNING CONTINGENCY
& ROLLING
PLANNING
BUDGETING
Managers develop multiple plausible Preparing backup plans (Plan B/Z) to
futures (best case, worst case, deal with crises, supply chain
disruption case) and define flexible failures, regulatory changes, etc. Rather than annual updates,
responses for each. organizations refresh financial
and operational plans monthly
or quarterly to stay aligned with
actual performance and external
changes.
 The Stage of Planning Cycle

Re-evaluating
Identify Developing Goals
Assistance a new Set
Define The
and of Goals
Current
Setting the Resistance and Actions
Situation
goals Step 5
Step 4
Step 3
Step 2
Step 1
 Step 1 :Setting the goals
● Without goals, an organization cannot develop and grow further.
● Goals that are set must be clear, realistic, rational, and logical.
● They must have a specific time frame.
● Managers must identify what the organization needs and the performance
target that has to be achieved by the organization.
● Example: To make a profit of 35% on assets of RM5 million for the 2020
financial year. Or To increase the firm’s productivity and efficiency by 80%
in the next year by reducing absenteeism and turnover.
 2. Defining current situation
● The top, middle and first line managers will examine the current situation
of the organization and compare it with the established goals.
● Managers need to ensure that there are adequate resources to achieve
the set goals.
● Managers must make necessary adjustments to the plan if the set of
goals are challenging and require high expenditure.
● Example: To achieve a sales target market of 5000 TV per month,
managers must conduct a survey of the current market.
 Step 3 : Identifying assistance and resistance

● Managers must examine the internal and external organizational factors.

● In terms of internal organizational factors, the organization can hire
suitably qualified employees.
● In terms of external organizational factors, managers need to be aware of
what competitors are doing, make improvements, and or implement new
strategies for production, sales, marketing and etc.
● Therefore, the management must take stock of the available support and
existing barriers as well as anticipating how these may change in the
future.
 4. Developing a new set of goals and action

● This involves identifying various alternative actions, evaluating each

alternative, and selecting the best alternative.
● If there are many barriers and the planning is not implemented
successfully, the manager must set new goals or design new plans.
● Managers need to find supporting alternatives to help quicken the
achievement of organizational goals.
● Example: a manager in an electrical equipment company can suggest
several marketing strategies and after taking into consideration of market
conditions, price, and customer behavior the manager will select the best
strategy to use.
 Step 5 : Re-evaluating goals

● This stage is important as it involves re-evaluating all the steps

implemented in the planning process and identifying the steps that
had caused the planning to fail.
● Managers can use the information obtained from the re-evaluation
process as an indicator to develop a better plan for the future.