Principles of Management: A Christian Perspective

Chapter 6 Planning Planning has been identified by numerous management theorists as one of the key functions of managers. Planning involves many aspects of the organization: the strategy of the firm, the goals of the firm, and the development of a comprehensive set of plans to integrate and coordinate organizational work. Planning requires identifying the overall purpose of a task, the activities necessary to be performed, the sequence of those activities, and the resources required to perform a task. The Dictionary of Business and Management has defined a plan as a statement of how a thing is performed; a written document setting out the activities, time and budgets required to meet a set of goals (Witzel, 1999). To Henri Fayol management planning meant looking ahead. He theorized that managers needed to have foresight, and that planning rested on three fundamentals. The first planning fundamental is an understanding of the firm’s resources (buildings, tools, materials, people and public relations to name a few). The second fundamental is to have an understanding of the nature of the present work processes, an understanding of how things get done in the organization today. The third fundamental addresses future trends in all activities of the firm, whose occurrence could not be predetermined; today this is known as a strategic audit (Wren, 2005). These fundamentals need to be in place for managers to be able to successfully plan anything. Facts about Planning There is an old adage about planning that says, “Failing to plan is planning to fail.” There is much wisdom in this phrase. Without proper planning, “things” just happen in the organization. A lack of planning puts the firm and the people in that firm in a reactive or defensive mode. In an organization with little or no planning, others will have an impact on the path the organization will take. Managers must use effective planning techniques if they are to make a major contribution to the firm. “Plans fail for lack of counsel, but with many advisers they succeed” (Proverbs 15:22). “The plans of the diligent lead to profit as surely as haste leads to poverty” (Proverbs 21:5). Planning is the primary management function that establishes the basis for all other management functions. Types of Plans There are four types of plans that managers in organizations may be called upon to create, implement, evaluate and operate. Long term plans are typically strategic plans that range from about three years and beyond. Long range plans (sometimes called strategic plans) are typically prepared by upper management executives. Historically, long range plans were considered ten years out and further. The reason why the planning cycle has been so dramatically shortened is the speed at which the business environment is changing. The logic of planning ten years out makes little sense (and has little hope of succeeding) when the business environment will be totally different. Some of the reasons for this fast-changing environment can be found in Table 6-1. Short term plans are another type of plan managers must prepare. Short term plans typically run from one to three years. The majority of short term plans are prepared by middle and upper level management. Short term plans are often a mix of strategic and operational plans. Strategic plans deal with the overall direction of the organization, and while the vast majority of strategic plans are long range, there are some that are short term plans. Operational plans deal more with the day-to-day functioning of the business. Operational plans are never in the long term planning cycle. Most operational plans are prepared by mid-level and first-level managers. An example of an operational plan is an employee work schedule. There is a great deal of stress on firms to shorten the planning cycle to make short term planning the primary strategic (and operational) plan. Standing plans are plans that guide managers and employees in their decision making abilities. Standing plans are used over and over to provide an overall sense of stability in the organization. Standing plans are very difficult to develop, but once developed they can be used for years, because they are amendable and adaptable. Standing plans are referred to as policies, procedures, and rules. Standing plans can be developed by committee (and often times are developed that way) or by an individual manager. The need for standing plans is driven by upper management. The development is shared by others including non-management employees. Standing plans sometimes need to be reviewed by legal staff to ensure that the policies are not violating any federal, state or local laws. The fourth type of plan is the Single use plan. As the name indicates, this plan is used only once, because of the unique circumstances of the business situation. Single use plans can be very complex for several reasons. For example one reason for the complex nature single use plan is time constraints. Unlike other types of plans, single use plans often have a well-defined beginning point and a well- defined ending point. Another reason for the complexity of single use plans is the unknown nature of some of the business- environmental issues. There are often many unknown issues affecting the situation that requires the plan. An example of single use plans is a project plan (such as would be used for a new telephone or computer system project).