The Role of Planning in Enterprise Management

The Role of Planning in Enterprise Management

Planning (also called forethought) is the process of thinking about and organizing the activities required to achieve a desired goal. Planning bridges the gap from where we are and to where we want to go. It is in essence the exercise of foresight.

Reasons why it’s a good idea for managers to plan: Examine critical issues facing the organization Don’t allow uncertainty, high risk and doubt to rule Determine organizational goals Define the means of achieving them Guidelines for decision making Small picture and Big picture More proactive than reactive Look into the future Focus attention on goals and results Create ownership Develop the appropriate team Keep on eye on the competition

Planning all other functions, including organizing, leading, controlling and staffing, stem from the planning function

Planning assessing what an organization wants to accomplish and how it will go about achieving that goal

Create a plan that is aimed at accomplishing some organizational goal Increasing sales Improving customer service

6 questions of planning

Types Strategic planning 1. 2. 3. 4. 5. It decides major goals and policies of allocation of resources to achieve these goals. It is carried at higher level of management It is long term Based on long-term forecasting considering the possible impact of political, economical, technological and competitive factors and is more uncertain It is less detailed Operational planning 1. 2. 3. 4. 5. It decides the detailed use of resources for achieving these goals It is carried at lower level of management It is short term Generally based on past performance of the organization and is less uncertain It is more detailed

By time period involved: Long term planning is strategic in nature and involves more than one year period (usually 3 to 5 years but it can extend even to 50 years). Middle term planning usually covers 1 to 3 years. Short term planning usually covers one year. Short term plans are made with reference to long term plans because short term plans contribute to long term plans.

By approach adopted: • • Proactive planning involves designing suitable courses of action in anticipation of likely changes of environment. Managers adopting proactive changes do not wait for environment to change, but take action in advance of environmental changes. For this, continuous scanning of environment is necessary. In reactive planning response comes after environmental changes take place. By the time organization responds to change in environment there may be further change in environment. Hence this type of planning is suitable in the environment which is fairly stable over a long period of time.

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