QUESTION ONE

1. Define planning and the logic of planning.
2. What are the importance and benefits of planning?

ANSWER

a) PLANNING – (Decision making, looking ahead). It is the determining of an organization’s goals and deciding how best to achieve them. Planning could be thought of as the dynamic process of analytically looking at the organization’s present position with a view to determine its future position Managers think through their goals and actions in advance, that their actions are based on some method, plan, or logic, rather than on a hunch. It is the basis by which:-

1. The organization obtains and commits the resources required to reach its objectives
2. Members of the organization carry on activities with the chosen objectives and procedures, and
3. Progress towards the objectives is monitored and measured so that corrective action can be taken if progress is unsatisfactory.

b) What are the importance and benefits of planning?

1. Planning gives the organization direction as it provides expected levels of performance – it gives the organization an idea of where it is heading, what it has to achieve, and how it will be accomplished.
2. If objectives are clearly formulated, planning promotes co-operation among various departments or sub-units of organizations
3. A manager is compelled by planning to look at the future, thus it encourages the proactive approach to management
4. Morden technology advances can best be exploited if a formalized planning process exists i.e. the organization is better prepared for such changes if it plans in the first instance.
5. The increasing complexity of organizations necessitates planning i.e. the interdependence between various managerial functional areas and planning makes c-ordination easier
6. Planning ensures that an organization is better prepared for today’s ever-changing environment.
7. Resources aimed at or to be committed to achieving organizational goals can be set aside if a formalized planning system exists.

QUESTION TWO

1. List the types of plans
2. What are the basic steps in the planning process?

ANSWER

2a) List the types of plans

a) Operational Plans: These are predominantly short-term plans undertaken at the lower managerial levels and tend to concentrate on the firm’s current scale of operations. They are sometimes called routine plans because they relate to the day to day running of the organization
b) Tactical Plans: These, on the other hand, are medium-term plans undertaken by middle management and they focus on the organization’s current scale operations, with particular emphasis on efficiency in resource utilization. Typical examples in this category would be the budgets which tend to concentrate on how the organization is sticking to certain set standards for example relating to expenditure.
c) Strategic / Corporate Plans: These are long-term “survival” plans for the whole organization undertaken by top management. They provide the basic framework for all the other plans already discussed. Their main focus is on the organization’s future scale of operations, with the emphasis being on investments and divestments, mergers and acquisition, and all other issues pertaining to the expansion and contraction of the firm’s scale of operations.

There are also other two types of plans: 
i. Specific plans are plans that are formulated for a specific task
ii. Directional plans provide a skeletal framework while according to the manager some reasonable leeway as to how they are to formulate their plans

2b) What are the basic steps in the planning process?

1. Environmental assessment – where the organization wants to conduct its operations. Is the environment conducive? What does the environment have to offer? What out there needs doing? What are the opportunities and threats? 
2. Establishments of goals and objectives – These are targets of performance. What do we want? What are currently doing?
3. Establishment of action plans – Come up with action plans with clear deadlines and implementation timetables. This is what we will do to get what we want.
4. Allocation of resources – This is the allocation of the organization’s resources to each task which needs to be done. Do we have enough resources to achieve what we want? If not where else can we get other resources to fulfill the organization’s goals? Do we have the capacity of doing what we want to be done?
5. Implementation – Once the action plan has been formulated, it must be implemented or incorporated into the daily operations of the organization
6. Control – as implementation proceeds, managers must check their progress at periodic intervals or critical stages

QUESTION THREE

What are the barriers to effective planning and how the organisation can overcome them?

ANSWER

There are a number of factors that may limit the effectiveness of plans, these are:

1. Lack of Environmental Awareness: manager may not have sufficient knowledge about the organization to embark on the planning process. Such information includes information on profitability, and more importantly, information on which resources to use for achieving organizational goals.
2. Lack of organizational Knowledge: This usually emanates from the managers who have a lack of confidence in their abilities, and have no knowledge about the organization in terms of goals, sub-units, etc.
3. Resistance to Change: Changing the organization’s current situation is one of the consequences of planning and some members may resent change. This tends to reduce the effectiveness of planning.
4. Time and Expense: Planning costs money and time, and sometimes sacrifices have to be made. Some members may be unwilling to make such sacrifices, preferring instead to tackle problems as they arise.
5. Lack of Knowledge of the Benefits from Planning: If organizational members are not enlightened on the benefits from planning they may not be keen to implement plans.
6. Lack of Involvement: If those who are supposed to implement the plans are not involved in the planning, they may not be enough information to enable effective planning.
7.  Lack of Managerial Commitment or Support: it should be borne in mind that top managerial support is instrumental for effective planning since it ensures that all the policy frameworks are set in place and that all the required resources are provided.

There are various ways of making planning more effective, and hereunder we enumerate more important ones.

1. Top Management Support. There is a need for top management to support the planning efforts of those lower down ranks. Planning starts at the top (Strategic Planning) and it is communicated downwards. This makes, therefore, top managerial support a prerequisite.
2. Managers should realize Limitations of Planning: Planning is not a perfect solution to all problems and there is a need for managers to understand the shortcomings of planning e.g. its dependence on assumptions about the future.
3. Efforts must be made to include everybody: For planning to succeed, there is a need for every organizational member’s participation. This is necessary at both the formulation and implementation stages so as to minimize resistance.
4. Plans should be communicated to all concerned: everyone should have information about planning objectives, targets, etc.
5. Plans should be in accordance with Environmental Trends: Plans should be adaptable to environmental changes since; in any case, the organization is a sub-system of the environment.
6. Contingency Plans should be formulated: the organization must have contingency plans i.e. what to do if things do not go according to plan.