Organizational Planning, Types, Criticism & Related Issues

 

Planning

Planning involves defining the organization’s goals, establishing an overall strategy for achieving these goals, and developing a comprehensive set of plans to integrate and coordinate organizational work. The term planning as used in this chapter refers to formal planning. The quality of the planning process and appropriate implementation probably contribute more too high performance than does the extent of planning.

S.P. Robbins:

   “A process that involves defining the organization’s goals, establishing an overall strategy for achieves those goals and developing a comprehensive set of plans to integrate and coordinate organizational work”.

Levels of Planning:

The most popular ways to describe organizational plans or levels by their breadth, time frame, specificity, and frequency of use.

Following are the levels of planning and management who make such plans are as under.

Strategic Plans:

“Plans that apply to the entire organization, establish the organization’s overall goals, and seek to position the organization in terms of its investment.”

These plans are usually made by top management in consolation with board of directors and middle management. They typically cover a relatively long time horizon and usually 3 to 5 years or more in future.

Tactical plans:

“Target of future results usually set by middle management for specific department or units”.

Tactical plans are the means the charted to support implementation of the strategic plan and achievement of tactical goals. Tactical plan outline the major steps that particular departments will take to reach their tactical goals.

LONG TERM PLANS:

It’s study in tactical plan.              “Plans with a time frame beyond three years”.

SHORT TERM PLANS:

                                                      “Plans covering one year or less”.

Intuitively, it would seem that specific plans would preferable to directional, or loosely guided plans.

(a)               SPECIFIC PLANS:

Plans that are clearly defined and that are leave no room for interpretation.

(b)               DIRECTIONAL PLANS:

Plans that are flexible and that set out general guideline.

Operational plans:

Plans that are specify the details of how the overall goals are to be achieved. Target or future results usually set by lower management that address specific measureable outcomes required from the lower level. Such plans specifically what must be accomplished over short time period in order to achieve operational goals.

Single use plans:

A onetime plan specifically designed to meet the needs of a unique situation.

Standing plans:

Ongoing plans that provide guidance for activities performed repeatedly.

FORMAL AND INFORMAL PLANNING:

FORMAL PLANNING:

Formal planning is a part of planning. Everything is in written, formed and regarded objectives all members are informed and clear the path on which they have to act upon and it is usually in large business and also in medium size business.

INFORMAL PLANNING:

In this planning there is nothing in written form and there is little or no sharing of objectives with other members. It is usually exist in small business.

WHY DO MANAGERS PLAN?

Purposes of Planning.

Planning is important and serves many significant purposes.

1. Planning gives direction to the organization.

2. Planning reduces the impact of change.

3. Planning establishes a coordinated effort.

4. Planning reduces uncertainty.

5. Planning reduces overlapping and wasteful activities.

6. Planning establishes objectives or standards that are used in controlling.

Criticism on Planning:

Formalized organizational planning became popular in 1960’s, and it still is today, for the most part. It makes sense for an organization to establish targets and some direction. But critics have challenged some of the basic assumptions of planning:

 1: Planning may create rigidity:

Formal plans can lock an organization into specific goals to be achieved within specific time frames. When these goals were set, the assumption may have been that environment wouldn’t change. If that assumption is faulty, managers who follow a plan may face trouble. Rather than remain flexible—maybe even discard the plan—managers who continue to pursue the original goals may not be able to cope with the change environment. Staying on course, when the environment is changing can be recipe for disaster.

2: Plans can’t be developed for a dynamic environment:

If a basic assumption of planning—that the environment won’t change—is faulty, then how can you plan? Today’s business environment is often random and unpredictable. Managing under those conditions requires flexibility, and that may mean not being tied to formal plans.

3: Formal plans can’t replace intuition and creativity:

Organizations often succeed because of someone’s innovative vision, and routine planning efforts may impede such a vision.

4: Planning focuses manager’s attention on today’s competition, not on tomorrow’s survival

Formal planning has a tendency to focus on how to capitalize on existing business opportunities within an industry but may not allow managers to consider creating or reinventing an industry. Consequently, formal plans may result in costly blunders when other competitors take the lead. On the other hand, companies such as Intel, General Electric, Nokia and Sony have found success forging into new industries.

5: Formal planning reinforces success, which may lead to failure:

Success breeds success. That’s an American tradition. If something’s not broken, don’t fix it. Success may, in fact, breed failure in an uncertain environment. It’s difficult to change or discard previously successful plans—to leave the comfort of what work for the anxiety to the unknown. Successful plans 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.

6: Just planning isn’t enough:

It’s not enough for managers just to plan. They’ve to start doing! When executives at the wall street journal needed to respond to a prolonged slump in advertising, they develop a plan for how best to accomplish that goal. And then they set about doing it.

Although rigid and inflexible planning may lead to such problems, today’s managers can effectively plan if they understand planning in dynamic uncertain environment.

The Role of Goals and Plans in Planning

1. Goals—desired outcomes for individuals, groups, or entire organizations.

2. Goals are objectives—the two terms are used interchangeably.

3. Types of goals.

a. Financial performance versus strategic goals

b. Stated versus Real.

·   Stated goals are official statements of what an organization says, and what it wants its various stakeholders to believe, its goals are.

·         Real goals are those that an organization actually purses.