planning organizations

University Degree Business and Administrative studies

process. Support your answer with examples drawn from real organisations, using

textbooks, journals, newspapers, business magazines, and periodicals.

Managing companies in the 21st century has changed in many ways compared to the

managing system used in the olden days. Starting from the structure of the organization

itself, how they plan, how they make decision, up until how they doing things; but one

thing that has not changed is that organizations which perform with an outstanding result

never neglect their planning. Each organization competes with each other to perform

better in accordance to others. These changes are made in order to form a better

organization each day as well as better results at the end of all progress. This essay will

examine why organizations that fail to plan are in essence planning to fail, as well the

types of organizational plans; hence the link between planning and strategic

management process.

“Organizations that fail to plan are in essence planning to fail”. From this statement it is

clearly understood that organizations which do not plan their future organizational goals

are more likely to fail. Not only is this applicable in the context of management. Anything

that is done without planning is very unlikely to succeed.

A well defined plan in academic term means “a drawing or diagram showing the

arrangement in horizontal section of a structure, piece of ground” (Webster’s New World

College Dictionary 2001). In planning, the very first step is to set a goal which is defined

as “statements of intended results that are general in nature and are measureable on a

naming or ranking scale of measurement” (Kaufman 1988).

It is crucial to plan every single step and thing that is needed to be done to avoid failure.

Hence, the importance to understand the purposes to plan; which is providing a direction

about what the organization does, and what and why it needs to be achieved so that the

organisation, as a whole, knows exactly what they are required to do. Therefore when

they know what to do, they can work together with other staff to accomplish the goals

that been set. For instance when the plan is set, the staff can easily refer to the master

plan and remind themselves what each of them are required to do.

Planning reduces uncertainty and makes sure everybody is committed to the achieving

the goal. It also forces the staff to anticipate any changes so they can construct an

appropriate response. In simpler terms, planning makes it easier to deal with

uncertainty. For example, where there is uncertainty or any problem in an organization,

they know what to do and are faster to react.

To minimize waste or redundancy is another one of the vital reasons to plan. This mean

that the organisation makes sure that nothing is left out or wasted in order to reach an

efficient result at the end of the day. These include time and financial resources. For

example when dealing with the food industry where the stocks are bound to the expiry

date, companies have to make sure of the amount needed in a certain period of time so

it does not result in waste of stock, expired food stock.

The last reason is to set a standard. This keeps things on track, or in the terms of a

managerial role it is known as controlling, as well as being a reference in competing with

other companies. This ensures us of what we are trying to achieve, and whether or not

we achieved it yet. For example, companies keep track of the progress of their plan by

determining their position in accordance to the plan daily, weekly, monthly or annually.

Even though many cases show that performance organizations that plan are mostly do

well, cannot be said that organizations that did not plan always fail. One of the real life

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examples for the organization that did well planning where lead to outstanding outcome

is Sunrise Confectioners. In 1987 when Ken Klooger took over the confectionary after

his father in law retired, the company had annual revenues of approximately $4 million

which did not increase or decrease much in the last ten years. He then realized that he

needed some planning in order to increase the revenues. After the changes that he

made through new products and methods in producing the products themselves as well

some ongoing research about the consumers’ preference and awareness, he did some

appropriate response to it such as spending $300,000 on television advertising for two

months due to consumers’ unawareness that their product contains no artificial colouring

and flavouring which one of the way to attract most health conscious consumers. This

resulted in the increase of revenues from $1.5 million to $15 million in 2000-2001

periods, as well as the market share that ...

This is a preview of the whole essay

needed some planning in order to increase the revenues. After the changes that he

made through new products and methods in producing the products themselves as well

some ongoing research about the consumers’ preference and awareness, he did some

appropriate response to it such as spending $300,000 on television advertising for two

months due to consumers’ unawareness that their product contains no artificial colouring

and flavouring which one of the way to attract most health conscious consumers. This

resulted in the increase of revenues from $1.5 million to $15 million in 2000-2001

periods, as well as the market share that had risen from 2 per cent to 25 per cent. In this

context, Sunrise Confectionary uses their organizational planning to give them direction

as well as set standards in accordance to its competitors (Robbins et al 2003).

In general terms, planning can be referred to in two ways: formal and informal. Formal

planning means concentrating on the achievement of the goals. Simple thing such as

setting a period of time to achieve that goal and writing down a list can be shared by

throughout the organizational structure so everyone knows what they have to do, where

they have to go also have something to refer back to while they are at it.

Informal planning is the reverse of the formal planning which is usually present in a

small business or organization. Informal planning is not as well organized because it is

not written and there is limited sharing among individuals due to an abstract form of it.

This shows that formal planning is addressed for a bigger organizational structure that

want to achieve their future organizational purpose positively because it assists them in

formalizing and systemizing all the processes being made.

There are various types of organizational plans. However, this essay will only discuss

the three major types of planning in an organization: budget planning, project planning,

and strategic planning. The best way to categorise each of the organisational plans is

via its breadth, time-frame, specificity and frequency of use.

In specific terms, a budget is a plan of action matched by resources required to

implement the plan (Hussey 1998). In other words, a budget is a plan. Budgets generally

divide between two broad categories: the operating budget, sometimes known as the

“expense” budget and the capital budget. Budget in simpler terms mean a sum of money

allocated for a particular purpose (Webster’s New World College Dictionary 2001).

Budget is in everyone’s life, be it a small or a big one. Budget is a tool which helps in

controlling and planning the functions of an organization. It is a formalized statement of

the goals of an organization stated in financial terms and accomplishes several

important functions for managers. It states future projections of revenues, expenses and

expected profits. Planning, evaluating performance, co-ordinating activities,

implementing plans, communicating, motivating and authorising actions are the main

functions of a budget. The budget period depends upon the action plan; it might be for a

short or long duration. A budget compels the managers to think ahead by formalizing

their responsibilities for planning, and is best framework for judging subsequent

performance and aids managers in coordinating their efforts, so that the plans of an

organization meets the objectives of the organization as a whole (Hussey 1998).

To plan a project a team should have a goal and should work as one unit to achieve

certain objectives. In project planning, team members should implement inventive ideas

that would serve their goal in a resourceful way. Each individual on a team should take

part in the planning process, because the diversity of team members and their different

perspectives can create more than one approach to initiate a project. Project planning

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can be explained as determining the goals and objectives of a project through a

coordination of procedures and determination of courses of action before initiating a

project. Project planning is a rational determination of how to initiate, sustain, and

finalize a project. There are many steps to be taken when planning a project within a

team. To have a successful plan when working with a team, set a role of conduct for the

team members (Free Management Library 2007). Define what each individual’s

responsibility is and what to be expected from them. Each project should be broken

down into specific tasks; it is important to find ways to divide the work into manageable

parts. All projects encounter problems and conflicts. In order to have an early resolution

to those problems, team members should discuss each potential problem that they

might face (Free Management Library 2007). Team members should have a logical

approach to problem solving. All problems must be predefined. Also, a deadline for the

project is essential. If time to get done with the project is not controlled then the project

itself can not be controlled (Free Management Library). Team members have to

prioritize and work on a certain pace. They might also have a set schedule on when

each task within the project should be done. Another important point in project planning

is communication. Team members should always give each other a feedback on the

progress of their tasks or roles and what have they accomplished. The process of

communication and its result helps diminish the conflict of change (Free Management

Library 2007). Discussing ideas within team members is a process where each

individual should contribute in. Having different ideas will make the project unique and

will create more than one method to reach the project’s goal.

Strategic plans are plans that apply to the entire organisation, establish the

organisation’s overall goals, and seek to position the organisation in terms of its

environment. Strategic plans tend to cover a longer time frame. Long-term plans can be

defined as those with a time frame of more than three years (Robbins et al 2003). They

also cover a broader view of the organisation. Strategic plans also include the

formulation of goals (McNamara 2007). There are a variety of perspectives, models and

approaches used in strategic planning. The way that a strategic plan is developed

depends on the nature of the organization's leadership, culture of the organization,

complexity of the organization's environment, size of the organization, expertise of

planners and et cetera. For example, there are a variety of strategic planning models,

including goals-based, issues-based, organic, scenario and so on. Goals-based

planning is probably the most common and starts with focus on the organization's

mission, goals to work toward the mission, strategies to achieve the goals, and action

planning. Issues-based strategic planning often starts by examining issues facing the

organization, strategies to address those issues, and action plans. Organic strategic

planning might start by articulating the organization's vision and values and then action

plans to achieve the vision while adhering to those values. Some planners prefer a

particular approach to planning (McNamara 2007).

There is a link between planning and strategic management process. Planning is one

part, though small, of the strategic management process. This can be shown using the

roles of corporate managers. One of the four major roles of a manager is to plan. This

planning plays a crucial part in determining the success of an organisation as mentioned

earlier. But first, we have to ask: What is “strategic management process?” and “What

are the steps in the process”.

There is not just one definition of the phrase “strategic management process”. The

definition, though similar, differs in accordance with people’s personal opinions. For

example, Johnson views it as a six-step process. On the other hand, Viljoen & Dann see

it as a five-step process. However, in my opinion, I agree most with Robbins’s view on

the process. Robbins et al analyses strategic management process as an eight-step

process that consists of strategic planning, implementation and evaluation. Although the

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first six steps describe the planning that must take place, implementation and evaluation

are just as important. Even the finest strategies can fall short if management does not

put into practice or assess them properly.

The first step in strategic management process is identifying the organisation’s current

mission, objective and strategies (Robbins et al 2003). Every organisation requires a

statement of the purpose of the organisation, also called a mission. The mission verifies

the reason for which the company is in the business. To do this, managers must

vigilantly recognize the range of its products and services. It is also vital for managers to

identify the goals and strategies currently being pursued in the company. Goals are a

foundation of planning which provide the measurable performance targets that the

organisation as a whole strives to reach. By being aware of current goals allows

managers to decide whether or not these current goals need to be changed. This can

also be applied to strategies currently in place.

The second step is analysing the environment (Robbins et al 2003). Analysing the

environment is a critical step in the strategy process. Robbins describes the external

environment as a significant basis on a manager’s actions. To outline a successful

strategy, it must be supported well by the environment. In this step, managers need to

know what is going on outside the organisation. Information such as what the

competitors are doing, what on-going laws might affect the organisation and what

degree of labour supply is available around the area where the company is located.

Aside from analysing the external environment, managers must also examine specific

and general environments to observe and be conscious of the trends and changes

which are occurring. This step of the process can be considered complete when the

manager has an accurate understanding of what is occurring in the external

environment and the developments which could possibly affect the organisation.

Following this, managers need to evaluate the results they have achieved in step 2 and

determine the opportunities which the company can utilize and threats it encounters.

This is all part of the SWOT analysis. Robbins defines opportunities as a positive

development in the external environment and threats as negative trends.

After identifying threats and opportunities, managers must now look inside the

organisation by analysing the organisation’s resources and capabilities (Robbins et al

2003). This includes employees’ skills, the organisation’s resources, success at

innovating products, quality of products, the organisation’s financial status, and the way

customers distinguish the organisation. All of these show that no matter how large or

how small an organisation is, the organisation is bound to the availability of resources

and capabilities. This analysis of the internal environment allows managers to recognize

specific capabilities and resources. When these capabilities and resources are

outstandingly unique, they can be used as competitive weapons. This key valuegenerating

skill is referred to as core competencies (Robbins et al 2003).

From the previous step, the organisation should now have a comprehensible appraisal

of its internal resources as well as its capabilities in executing various practical activities.

Strengths are any strong capabilities the organisation possesses or unique resource

materials (Robbins et al 2003). Weaknesses are the activities which the organisation

does not perform well or the lack of resources which they need. Robbins states that

different strengths and drawbacks have different outcomes on the strategy being

pursued. An organisation’s culture is its personality or characteristics. It is a sign of the

organisation’s mutual beliefs and values. When an organisation has a strong culture, it

becomes more straight-forward for managers to convey the organisation’s core

competencies and strengths to new employees. However, strong cultures are difficult to

change. It then becomes a barrier to acknowledging any alterations in the organisation’s

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strategies. “Successful organisations with strong cultures may become prisoners of their

own success” (Robbins et al 2003).

Strategies need to be formulated in all levels of an organisation, be it a corporate,

business or functional level. This follows a decision-making process. Strategic

alternatives must first be assessed. Managers must select strategies which harmonize

with each other and bring out the best of the organisation in terms of its strengths and

environmental opportunities. A successful strategy would be one that puts the

organisation at a relative advantage over its competitors and the most favourable

aggressive edge (Robbins et al 2003). The organisation must try and maintain this

advantage to call the strategy a victory.

As mentioned earlier, the first six steps are the planning of strategies. After an

organisation comes up with strategies, they must apply it. The same efforts put into

planning the strategies must be put into implementing it. No matter how effective the

strategies are, if the organisation fails to apply it properly, these strategies will be

deemed useless (Robbins et al 2003). Implementing strategies efficiently often means

that the organisation has to hire new people with different skills, relocating a portion of

current employees to new positions, or in the worst case, make redundant some

employees. Most organisations nowadays run their management using teams.

Therefore, building and managing effective teams is ability in implementing strategies

efficiently. Top-management leadership is equally as important. So is a motivated group

of middle and lower-managers who perform the organisation’s specific strategy needs.

The final step in the strategic management process is evaluating the results of the

strategies in terms of effectiveness, and adjustments that need to be made to improve

the success of strategies. As a real-life example, Anne Mulcahy who is the president of

Xerox Corporation made strategic modifications to develop her company’s

competitiveness in the information services industry. These strategic actions were made

after assessing the results of previous strategies and coming to a conclusion that

changed were needed (Robbins et al 2003).

In conclusion, the four key factors for success when implementing change within an

organisation are: pressure for change; a clear, shared vision; capacity for change; and

action. The various types of organisational plans as well as the implementation of

strategic management process play a significant role in planning and managing change.

Change management entails thoughtful planning and sensitive implementation, and

above all, consultation with, and involvement of, the people affected by the changes.

The four key factors for success when implementing change within an organisation are:

pressure for change; a clear, shared vision; capacity for change; and action.

REFERENCES

Agnes, M & Guralnik, DB (eds) 2001, Webster’s New World College Dictionary, 4th edn,

IDG Books Worldwide Inc., Foster City, California.

Free Management Library 2007, Planning in Organisations, viewed 2 May 2007, .

Hussey, D 1998, ‘The Making of Strategy’, Strategic Management: from theory to

implementation, 4th edn, Butterworth-Heinemann, Oxford, pp. 161-508.

Kaufman, R 1988, ‘Where to go and why get there: goals, objectives, needs, and roles’,

Planning for Organisational Success: a Practical Guide, 2nd edn, Social Impacts

Publications, Australia, pp. 1-20.

McNamara, C 2007, Strategic Planning: in non-profit or for-profit organisations, Free

Management Library, viewed 3 May 2007, .

Robbins, SP, Bergman, R, Stagg, I, Coulter, M 2003, ‘Planning’, Management, 3rd edn,

Pearson Education Australia, New South Wales, pp. 171-270.

Viljoen, J & Dann, S 2000, ‘Process of Strategic Management’, Strategic Management:

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planning and implementing successful corporate strategies, 3rd edn, Pearson Education

Australia, New South Wales, pp. 45-89.

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