Cebu Normal University College of Nursing Graduate Studies

PLANNING
LN 4005 Organizational Theory and Leadership

By NEILANI P. ALEJANDRINO, RN

MRS. SARA V. SANCHEZ, RN, MN

PROFESSOR

PLANNING
DEFINITION OF PLANNING A proactive and deliberate process that requires deciding in advance what to do, who is to do it, and how, when, and where it is to be done. Planning is a rational action mixed with a little of forethought. It is seen everywhere. In a business, planning is the primary of all managerial functions as it involves deciding of future course of action. Thus, planning logically precedes the execution of all managerial functions. Planning is the process of deciding in advance what is to be done, where, how and by whom it is to be done. Planning as a process involves anticipation of future course of events and deciding the best course of action. Thus, it is basically a process of thinking before doing. All these elements speak about the futurity of an action. Koontz and ODonnell have defined planning in terms of future course of action. They state that Planning is the selection from among alternatives for future courses of action for the enterprise as a whole and each department within it. Planning encompasses: determining philosophy, goals, objectives, policies, and rules carrying out long-and-short range projections determining a fiscal course of action and managing planned change NATURE OF PLANNING The nature of planning can be highlighted by studying its characteristics. They are as follows: (a) Planning is a mental activity Planning is not a simple process. It is an intellectual exercise and involves thinking and forethought on the part of the manager. (b) Planning is goal-oriented Every plan specifies the goals to be attained in the future and the steps necessary to reach them. A manager cannot do any planning, unless the goals are known. (c) Planning is forward looking Planning is in keeping with the adage, look before you leap. Thus planning means looking ahead. It is futuristic in nature since it is performed to accomplish some objectives in future. (d) Planning pervades all managerial activity Planning is the basic function of managers at all levels, although the nature and scope of planning will vary at each level. (e) Planning is the primary function Planning logically precedes the execution of all other managerial functions, since managerial activities in organizing; staffing, directing and controlling are designed to support the

attainment of organizational goals. Thus, management is a circular process beginning with planning and returning to planning for revision and adjustment. (f) Planning is based on facts Planning is a conscious determination and projection of a course of action for the future. It is based on objectives, facts and considered forecasts. Thus planning is not a guess work. (g) Planning is flexible Planning is a dynamic process capable of adjustments in accordance with the needs and requirements of the situations. Thus planning has to be flexible and cannot be rigid. (h) Planning is essentially decision making Planning is a choice activity as the planning process involves finding the alternatives and the selection of the best. Thus decision making is the cardinal part of planning. IMPORTANCE OF PLANNING 1. Planning leads to the achievement of goals and objectives. 2. Planning gives meaning to work. 3. Planning provides for effective use of available resources and facilities. 4. Planning helps in coping with crises. 5. Planning is cost effective. 6. Planning is based on past and future activities. It prevents or reduces the recurrence of problems and provides better ideas. 7. Planning leads to the realization of the need for change. 8. Planning provides the basis for control. KINDS OF PLANNING Planning is of several kinds depending upon their nature. The various kinds of plans are as follows: (a) Financial and non-financial planning. Financial planning relates to the monetary aspect of the concern. On the other hand, nonfinancial planning relates to the physical resources of the concern. (b) Formal and informal planning. A planning in black and white is known as formal planning. Informal planning is only thinking about it and nothing more. (c) Short-range and long-range planning. Short-term planning relates to a period of less than one year. It is to accomplish objectives in the near future. Medium-term planning covers a period of over one year but less than three years. A planning between three to five years is known as long-term planning. (d) Standing and ad hoc planning. Standing plans are permanent in nature and are meant to be used over and over again. They ensure quick decision and action whenever need arises. On the other hand, ad hoc plans are generally for specific matters and are prepared only when some need arises.

(e) Administrative and operational planning. Planning is generally done at various levels of management like top level, middle level, and lower level. Administrative planning associates with middle level managers and provides guidelines to operational planning. On the other hand, operational planning associates with lower levels of management and deals with actual execution of operations. Top level planning is concerned with fixing of objectives MAJOR TYPES OF PLANNING 1. Strategic Planning - A long range plan that examines the organizations purpose, mission, philosophy, and goals in the context of its external environment. It forecasts the futures success of an organization by matching and aligning all its capabilities with its external opportunities. 2. Short-term Planning Operational planning that focuses on achieving specific tasks over a period of one hour to three years. PRINCIPLES IN PLANNING Good planning requires a methodical process that clearly defines the steps that lead to optimal solutions. This process should reflect the following principles: Comprehensive all significant options and impacts are considered. Efficient the process should not waste time or money. Inclusive people affected by the plan have opportunities to be involved. Informative results are understood by stakeholders (people affected by a decision). Integrated individual, short-term decisions should support strategic, long-term goals. Logical each step leads to the next. Transparent everybody involved understands how the process operates. A principle of good planning is that individual, short-term decisions should support strategic, longterm goals. This requires comprehensive evaluation and negotiation to help people accept solutions that may seem difficult and costly in the short-term. PLANNING MODES
1. Reactive Planning Occurs after a problem exists. Planning efforts are

directed towards returning the organization to a previous, more comfortable state. Done in response to a crisis. Can lead to hasty decisions and mistakes. 2. Inactivism Status quo is the stable environment. Planning is focused on preventing change and maintaining conformity. Changes are slow and occur incrementally. 3. Preactivism Future oriented; experience is not valued and the future is always preferable. Technology is used to accelerate change. 4. Proactive/Interactive Planning Past, present and future are considered. There is an attempt to plan the future of the organization rather than react to it. STEPS IN PLANNING

Your unit needs to develop a plan. As you develop the plan, questions arise. Is it a strategic plan? Do you have goals or objectives? Are you identifying tactics or specifying actions? This Innovation Insight provides some background to help you answer those questions. One way to look at planning is as a hierarchy of the components of a plan. Vision Mission Values Goals Strategies Processes and Actions Measures of Performance Vision: Where the unit wants to be or how it wants to be viewed at some point in the future. Mission: Why the organization exists, what services or products it provides. Values: What is important to the organization at its core. Goals: Specific accomplishments that will indicate the unit is moving toward its vision. Strategies: Specific approaches to achieve each accomplishment or goal. Processes and Actions: What must actually be done on a day to day basis to implement a strategy. Measures of Performance: Quantitative or qualitative data that will indicate how close a unit has come to accomplishing a goal. The key concept here is the hierarchy, not the specific language or terminology that is used for each component. Language and terminology can be determined or set by the organizational culture, language used in past plans, or the level within the organization at which the unit doing the planning exists. Some organizations talk about objectives rather than goals. For others, an objective is a measure, or a target. Focus on the purpose of the plan, not the language. But ensure that all the people developing, implementing, or reviewing the plan use the same language and have the same definitions for the terms. Dixon (1993) presents a different hierarchy of plans: three levels based on length of the planning time frame, level of detail in the plan, and where within the organization the plan is developed.
1. Strategic plans address a time frame of five to ten years, may be vague,

and are developed at the organizational, board, or executive level.

2. Managerial/tactical plans address a 12 month time frame, have a high

level of detail, and are developed at the unit or department head level. 3. Operational plans may address only a one to four week time frame, are very detailed, and may be developed at the supervisory level. Additionally, to accomplish a specific task project plans may be developed. The longer the time frame addressed by the plan, the less detail it includes, the more uncertainty and risk it involves, and the more senior the people who develop it. Strategic, managerial, and operational plans can be thought of as a set or a waterfall of plans. Alignment is the key word for all plans in the set. It should be clear how activities in a plan at one level support, or are aligned with, the goals or strategies of the plan at the next level up.

Conversely, goals and strategies at one level should drive the activities in a plan at the next level down. COMMON MISCONCEPTIONS ABOUT PLANNING 1) Planning is an Annual Process Think you can plan once a year? Think again! Continuous improvement requires constant evaluation and planning. In fact, operational efficiency relies on it! We recommend that after each significant seasonal operation, that you perform a lessons-learned review, with the information retained for next seasons operational planning. 2) Planning is a late December/January Process The time to plan for next year is now! Many companies wind down slowly and need a break, planning starts in late December or January. We believe that some of the best time to implement new systems and ideas is during the slow time around the holidays. Therefore if you have laid out your plans in advance you can be working on implementation during that time. 3) Senior Managers and Owners Should Develop Company Plans While senior managers and owners should provide overall direction, I believe that each department should take a hard look at itself and what is needed to achieve continual improvement. Your whole team needs to be engaged in the plan. Departments should be looked at in a company with all key people being able to weigh in on all departments. Departments tend to gloss over internal problems and need the eyes of others to objectively look at their performance. The team needs to be successful together and all departments need each other. 4) Our operations have always been strong so we should focus on growth During periods of rapid growth, things can get out of control especially if planning has been inadequate. Operations are vulnerable to deterioration for many reasons, not the least of which is a gradual decline in competence. For example, when promoted employees are replaced with others who may be less competent or experienced, it can gradually erode your competency base. To overcome this problem it is necessary to instill best practice programs throughout your operation. These become the foundation for your companys way of doing things. If you dont these practices currently in place, be sure to develop and integrate them as part of your planning process and establish ground rules to optimize efficiency and quality. 5) In this industry, it is next to impossible to plan due to weather, and you never know what contracts you have until the last minute. Wrong. Weather plays a role in every landscape companys daily drill and both Mother Nature and the economy can throw you a monstrous curve ball if youre not prepared. Some are seasonal business and you cant survive for very long without contingency planning in place for the unexpected. Web-based information programs are available today that make weather forecasting simple. Research the likelihood of various weather patterns that might affect seasonal operations. OTHER MISCONCEPTIONS ABOUT PLANNING:

Only big businesses need strategic planning. Reality: Every business needs a strategic plan. A lack of proper planning is one reason why many companies fail. Every business, from the smallest to the largest, needs to know three things: What they do, who they do it for, and how they succeed at it. Sounds easy, right? It is not. The market changes, the economy changes, the rules change, and a business must have a plan to change with them all. My business doesnt need a formal, written plan its all in my head. Reality: Even the best pro golfer has a caddie providing guidance and helping him to read the course. If your business is a one-person operation, you may simply need to brainstorm with your trusted advisors and put your plan down on paper. Documenting it will help you stay on track when there are several projects competing for your attention. If you have more than one person in your business you need to remember that your employees cant read your mind and if thats where the plans are stored well then. Your team likely has valuable insights to share if you provide them with the opportunity. By including your staff in the planning process and sharing the final plan with them, you ensure that everyone has the opportunity to provide input and that everyone knows what theyre working toward. Planning doesnt involve too much I can wing it. Reality: Planning to plan sounds redundant, but theres a definite need for it. Its not enough to have strategic planning as a line-item on your staff meeting agenda. You and your key personnel need to come to the dedicated strategic planning session free from major distractions and ready to focus on guiding your business. You need two things to keep you from winging it: Professional facilitation and good data. If you lead your own strategic planning sessions, then you wont be able to effectively participate. A professional facilitator wont easily get sidetracked with minutiae and wont fail to ask the hard questions. The second thing is good data. Too many times a business will decide to engage in planning, but they end up pulling key stakeholders together only to talk about what employees and customers feel and think. Conjecture is no basis for business planning. We often recommend conducting research before entering the planning session so your decisions are based on facts not guesses. CRITICISMS OF PLANNING Formalized organizational planning became popular in the 1960s and, for the most part, it still is today. It makes sense for an organization to establish some direction. But critics have challenged some of the basic assumptions underlying planning. What are the primary arguments directed at formal planning? 1. Planning may create rigidity. Formal planning efforts can lock an organization into specific goals to be achieved within specific timetables. When these goals were set, the assumption may have been that the environment wouldn't change during the time period the goals covered. If that assumption is faulty, managers who follow a plan may face trouble. Rather than remaining flexibleand possibly throwing out the planmanagers who continue to do the things required to achieve the original goals may not be able to cope with

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the changed environment. Forcing a course of action when the environment is fluid can be a recipe for disaster. Plans can't be developed for a dynamic environment. Most organizations today face dynamic environments. If a basic assumption of making plansthat the environment won't changeis faulty, then how can you make plans at all? Today's business environment is often chaotic, at best. By definition, that means random and unpredictable. Managing under those conditions requires flexibility, and that may mean not being tied to formal plans. Formal plans can't replace intuition and creativity. Successful organizations are typically the result of someone's innovative vision. But visions have a tendency to become formalized as they evolve. Formal planning efforts typically involve a thorough investigation of the organization's capabilities and opportunities and a mechanical analysis that reduces the vision to some type of programmed routine. That approach can spell disaster for an organization. For example, the rapid growth of Apple Computer in the late 1970s and throughout the 1980s was attributed, in part, to the innovative and creative approaches of one of its co-founders, Steven Jobs. As the company grew, Jobs felt there was a need for more formalized management something he was uncomfortable doing. He hired a CEO who ultimately ousted Jobs from his own company. With Jobs's departure came increased organizational formality, including detailed planning the same things that Jobs despised so much because he felt that they hampered creativity. By the mid-1990s, Apple, once an industry leader, was struggling for survival. The situation became so bad that Jobs was brought back as CEO to get Apple back on track, which he eventually did by refocusing on innovation. Planning focuses managers' attention on today's competition not on tomorrow's survival. Formal planning has a tendency to focus on how to best capitalize on existing business opportunities within an industry. It often doesn't allow managers to consider creating or reinventing an industry. Consequently, formal plans may result in costly blunders and high catch-up costs when other competitors take the lead. On the other hand, companies such as Intel, ABB (Asea Brown Boveri), and Sony have found success from forging into uncharted waters, spawning new industries as they go. Formal planning reinforces success, which may lead to failure. Success breeds success. That's an "American tradition." If it's not broken, don't fix it, right? Well, maybe not! Success may, in fact, breed failure in an uncertain environment. It's hard to change or discard previously successful plansto leave the comfort of what works for the anxiety of the unknown. Successful plans, however, may provide a false sense of security, generating more confidence in the formal plans than is warranted. Many managers will not face the

unknown until they're forced to do so by environmental changes. By then, it may be too late! How valid are these criticisms? Should managers forget about planning? No, managers shouldn't forget about planning! Although the criticisms have merit when directed at rigid, inflexible planning, today's managers can be effective planners if they understand planning in dynamic uncertain environments. CONTINGENCY FACTORS IN PLANNING Three Contingency Factors Affect Planning: 1. Level in the organization Shows the general relationship between a manager's level in the organization and the type of planning done. For the most part, operational planning dominates managers' planning efforts at lower levels. At higher organizational levels, the planning becomes more strategy oriented. 2. Degree of environmental uncertainty When environmental uncertainty is high, plans should be specific but flexible. Managers must be prepared to rework and amend plans as they're implemented. At times, managers may even have to abandon their plans.
3. Length of future commitments.

The last contingency factor affecting planning is also related to the time frame of the plans. The more that current plans affect future commitments, the longer the time frame is for which managers should plan. This commitment concept means that plans should extend far enough to meet those commitments made when the plans were developed. Planning for too long or for too short a time period is inefficient and ineffective.

RELATION TO ORGANIZATION Though distinct in meaning, planning and organizing are two concepts that complement each other. Many organizational experts agree that you simply cannot have one without the other. As a manager, it is important to understand the relationship between planning and organizing, then implement both concepts into your regular management routine. Planning Planning for a business is a three-step process. You first perform research on the issue at hand. For instance, if you're trying to establish a promotional plan, research the target market. Then you set S.M.A.R.T. (specific, measurable, achievable, relevant and timed) goals based on that research.

Finally, you establish action steps for achieving each of the goals you've set.

Organizing Organizing for a business is the process of arranging tasks or resources so that you can perform or use them optimally. Proper organizing facilitates an efficient work environment and increases the chance that employees achieve their goals at work. Relationship Between the Two Because of the nature of business planning, the ability to effectively organize is of the utmost importance. Each step of the planning process is simplified when organized properly. For instance, organizing your research tasks helps you come to reasonable conclusions more quickly. When establishing goals, organize them in order of importance and also classify them as either short- or long-term objectives. Your final plan of action must also have a logical order in order to be effective. Different Levels Planning and organizing for a business occurs on three different levels. On the operational level you make plans regarding the day-to-day operations of the business. When starting up a business or starting a new business initiative (such as a new product), create a general business plan to outline the required steps. Upper management is responsible for establishing a strategic plan, which outlines a long-term strategy and direction for the company. In all cases, the responsible party must develop and implement the plan in an organized manner to ensure its success. REFERENCE Website: Bruce K. Wilson Title: Five Strategic Planning Myths Debunked URL: http://www.brucekwilson.com/?p=290 Website: Innovation Insights Title: The Planning Hierarchies URL: http://www.psu.edu/president/pia/innovation/planninghierarchies.pdf Website: Scribd Title: Nature of Planning, Significance of Planning and Types of Planning URL: http://www.scribd.com/doc/25420973/Nature-of-Planning Website: Victory Transport Policy Institute Title: Planning Principles and Practices by Todd Litman URL: http://www.vtpi.org/planning.pdf Website: Chron.com Title: The Relationship between Planning and Organizing

URL: http://smallbusiness.chron.com/relationship-between-planning-organizing-10558.html