Estimated time of reading: 30 minutes
1.3 Planning of the company
We understand by planning the process of defining the objectives of the organization, establishing a general strategy to achieve them and designing a series of plans to coordinate the activities. We will see how the strategy is formalized through the planning process in a series of practical application plans. The planning precedes the rest of the managerial functions (organization, direction and control). Once you have clarified what objectives and how (plan) you want to achieve, you are in a position to organize and direct available resources, and control is made possible.
To achieve a corporate objective, it will be implemented:
Through the establishment of objectives, the lower levels know what is expected of them from the higher levels and, through the control facilitated by the planning, the managers can know how the lower levels are developing their activity. «There is no favorable wind for those who do not know where they are going».
Advantages of planning
Let´s check the next group of slides to know more about de advantages of planning in business administration:
Types of plans
There are several criteria when classifying plans:
- Long term: temporality of 3-5 years.
- Medium term: approximate duration of 1 to 3 years.
- Short term: less than one year.
- Strategic: that define the main lines of the organization as a whole.
- Tactics: at the level of the business unit.
- Operational: at department or individual level.
- Single use: applicable to a particular situation or to a specific period of time.
- Permanent: used to face recurrent situations.
A small planning, with its own objectives, deadlines, resources and plans.
Numerical translation of the expected results.
A guideline that must be disclosed, understood and followed by all the members of the organization, in which the rules and responsibilities of each area of the organization are contemplated.
Set of actions or operations that have to be performed in the same way, to always obtain the same result under the same circumstances.
Read the following case study:
The TTI company is ready to start using a new CRM, however, it must define a plan that allows to find the right one, make a budget and schedule the necessary implementation time. Today, Charles, the head of the computer systems department, has assembled his team so they can define the best type of plan to use …
Stages of the planning process
The planning process must be carried out sequentially following a series of stages, being in this case the problem to be solved by achieving the objective or objectives established.
Establishment of the objectives
The effort of all the members of the organization will be oriented towards the achievement of these goals.
Determination of the premises
Circumstances in which the plans will have to be developed.
Determination of alternative courses of action
Alternatives on how the marked objectives could be achieved taking into account the constraints found.
Evaluation of alternative courses of action
Express them in quantitative terms in order to evaluate them.
Choice of a course of action
The best alternative is chosen.
Formulation of the derived plans
Complementary plans that support the main plan.
Budgeting
Quantify plans by preparing budgets.
A continuous process of feedback is required to evaluate the development of the plans, detect possible deviations and, where appropriate, take the appropriate measures, which may include redoing any of the planning stages. All this constitutes the process of control.