MODULE 4 • Of highest priority in the planning hierarchy – it

MANAGEMENT FUNCTION: PLANNING influences the development of an organization’s

philosophy, goals, objectives, policies,
Planning entails forecasting or setting the broad procedures, and rules.
outline of work to be done. It is the primary process of
selecting and relating facts, making use of The Organization’s Philosophy Statement
assumptions regarding the future, and formulating • Delineates the set of values and beliefs that guide
activities necessary to achieve the desired results. all actions of the organization.
• The basic foundation that directs all further
Effective planning involves answering certain planning toward the mission
questions that constitute the basic elements of this
activity, using the question technique with “why” as Goals
the common denominator: • The desired result toward which effort is directed;
1. What action is necessary? Why? it is the aim of philosophy.
2. Where will it take place? Why? • Change with time and require periodic re-
3. When will it take place? Why? evaluation and prioritization
4. Who will do it? Why? • Somewhat global in nature but should also be
5. How will it be done? Why? measurable; ambitious but realistic
• Should clearly delineate the desired end-product.
The Planning Hierarchy. • Long and short-term goals: services rendered,
economics, use of resources (including people,
The Vision funds and facilities), innovations and social
A mental image or the power of imagination to see responsibilities
something that is not actually visible. • To be measurable, objectives should have a
specific time frame in which the objectives are to
The Purpose or Mission Statement be completed, and the objectives should be
• A brief statement identifying the reason that an stated in behavioral terms.
organization exists and its future aim or function.
• The statement identifies the organization’s
constituency and addresses its position regarding
ethics, principles, and standards of practice
Policies STRATEGIC PLANNING
• Plans reduced to statements and instructions that
direct organizations in their decision making. Leaders are proactive. They make change happen
• Purpose of Policies - instead of reacting to change. The future requires
1. Serve as a basis for future decisions and actions corporate leadership with the skills to integrate many
2. Help coordinate plans unexpected and seemingly diverse events into its
3. Control performance planning. Every organization must plan for change in
4. Increase consistency of action by increasing order to reach its ultimate goal. Effective planning
the probability that different managers will helps an organization adapt to change by identifying
make similar decisions when independently opportunities and avoiding problems. It sets the
facing similar situations direction for the other functions of management and
for teamwork. Planning improves decision-making. All
• Kinds of Policies levels of management engage in planning.
a. Implied - Neither written nor expressed
verbally; usually developed over time and Strategic planning is the process of developing and
follow a precedent analyzing the organization's mission, overall goals,
general strategies, and allocating resources.
b. Expressed
A strategy is a course of action created to
1. ORAL - more flexible and can be easily achieve a long-term goal. The time length for
adjusted to changing circumstances, strategies is arbitrary, but is probably two, three,
however, they are less desirable than written or perhaps as many as five years. It is generally
ones because they may not be known. determined by how far in the future the
organization is committing its resources.
2. WRITTEN - they are readily available to all in
the same form; their meaning cannot be SWOT ANALYSIS
changed by word of mouth. A situation or SWOT (Strengths, Weaknesses,
Opportunities, Threats) analysis is critical to the
creation of any strategic plan. The SWOT analysis
begins with a scan of the external environment.
Organizations must examine their situation in order to
seek opportunities and monitor threats. Sources of Strategic plans also can go wrong if the goals and
information include customers (internal and objectives you set are unrealistic. Every business
external), suppliers, governments (local, state, owner wants to see their business grow and succeed,
federal, international), professional or trade but if you set an overly ambitious growth rate, it could
associations (conventions and exhibitions), journals discourage you and your employees.
and reports (scientific, professional, and trade). This is
often called as situation audit. A successful strategic plan requires commitment.
Your entire team needs to be focused on the business
When Should Strategic Planning Be Done? and carrying out the strategic plan. If the strategic
When it comes to strategic planning, you want plan isn’t being used regularly or as the foundation of
to start it sooner rather than later. It doesn’t the business, you and your employees can lose sight
necessarily have to be done in the first few days or of the company’s direction and goals.
weeks of the company’s life—you may want to be in
business for a few months to give yourself a better Task 4.1
idea of what is and isn’t working. In one sheet of bond paper, using the Business you
But even if you’ve owned your business for a long had under task 3.2, formulate:
time, it’s not too late to get started on strategic a. Vision Statement
planning. It’s never a bad time to sit down and think b. Mission Statement
about the current status of your company and where c. Goals
you want to be in the next five to 10 years. When d. Objectives.
you’re ready, gather your team together and Make Sure to write a heading - indicating the
schedule regular meetings dedicated to strategic Business Name and the Business Owner.
planning.

Where Do Strategic Plans Go Wrong?

Strategic planning is an ongoing commitment. Even
if you go through an initial round of strategic planning
and it leads to the development of your business’s first
strategic plan, it’s still not finished. The plan has to be
implemented. The process is continuous. Changes
may be made as new facts are known.