Planning

Planning
Planning can be defined as the determination of organizational goals and the means to reach them.

Planning is considered as a basic managerial function because it sets the framework and direction for the organizing, leading and controlling functions.

Why plan?
1)
2) 3) 4)

Discover new opportunities. Anticipate and avoid future problems. Develop effective courses of action. Comprehend the uncertainties and risks with various options.

Types of Planning

Two types of planning

1)

Strategic Planning

2)

Tactical Planning

Strategic planning
Strategic planning is the process of:
1) 2) 3) 4) 5)

diagnosing the organizations external and internal environments. Deciding on a vision and mission. Developing overall goals. Creating and selecting general strategies to be pursued. Allocating resources to achieve the organizations goals.

Tactical planning:
Tactical planning involves making concrete decisions regarding:

What to do, Who will do it, How to do it - with a normal time horizon of a year or less.

Degree of Diversification and Planning

Diversification refers to the variety of goods and / or services produced by an organization and the number of different markets it serves.
The degree of diversification directly affects the complexity of an organizations strategic planning.

Types of Business Firms

A single

business firm business firm

A dominant A related

business firm

An

unrelated business firm

Levels of Strategy
1)

Corporate level strategy Business unit strategy Functional level strategy

2)

3)

Corporate level strategy

Corporate level strategy is formulated by the top management to oversee the interests and operations of organizations made up of more than one line of business.

The major questions at this level are: 1) What kinds of businesses should the company be engaged in? II) What are the goals and expectations of each business? How should resources be allocated to reach these goals?

Business level strategy

Business unit strategy is concerned with managing the interests and operations of a particular line of business.

Top managers of a firm or SBU focus on planning and formulating strategies for: How will the business compete within its market? What products/ services should it offer?

Which

customers does it seek to serve? How will resources be distributed within the business.

Functional level strategy

Functional level strategy refers to the actions and resource commitments established for operations, marketing, human resources, finance, legal services, accounting, etc. Functional level plans and strategies should support business level strategies and plans.

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