Chapter 10
The nature and the importance of planning
Planning can be defined as the managerial function that determines the organisation vision, mission
and goals, identifies ways of attaining the goals and finds the resources needed for the task within a
complex environment.
Planning done properly enables an organisation to create need-satisfying products and / or services
to its customers, to create jobs and to contribute to the wealth and living standards of the
community.
Determine the organisational vision, mission and
goals
Vision: A statement of what the organisation wants to become and where it wants to be in
future
Mission: Aligns the organisation with its vision in terms of its products and / or services,
market and technology. It can also set out the philosophy of the organisation in terms of its
values, ethics and beliefs.
A well written mission statement does the following:
o Defines the organisation for key stakeholders in terms of its product and / or
services, market and technology.
o It outlines how the vision is to be accomplished.
o Establishes key priorities for the organisation.
o States a common goal and fosters a sense of togetherness.
o It creates a philosophical anchor for all organisational activities
o It generates enthusiasm, buy-in and a ‘can do’ attitude amongst all stakeholders.
o Empowers present and future members of the organisation to believe that every
individual is the key to success.
Goal / objective: commitment to achieve a measureable result within a given time frame
Goals are the targets that organisation drives towards.
Good objectives – criteria:
o Should be expressed in quantitative terms so that it is measureable
o Should be expressed in specific terms
o Should state desired results
o Should be attainable
o Should be acceptable
o Should state results to be achieved within a given time period
o Should be congruent with one another
o Should be flexible
, Prioritising goals and objectives
This means that managers rank goals, objectives and activities in order of priority.
The most widely used techniques are the ABC priority system and the 80/20 rule:
A-B-C Priority System:
o Objectives can be grouped into 3 categories, A, B & C.
o A: Must Do
o B: Should Do
o C: Nice To Do
Pareto Principle
o The 80/20 Principle
o A minority of causes, inputs or effort tend to produce the majority of results, outputs
or rewards.
Identifying ways to achieve goals
Management also needs to identify ways of reaching an organisation’s goals.
This is referred to as ‘the ends-means chain of objectives’.
The setting of objectives is a top-to-bottom process – top management sets broader organisational
objectives with longer time horizons than lower levels of management.
This downward flow of objectives creates a means-ends chain.
The accomplishment of goals, is a bottom-up approach.
Working from bottom to top, lower management objectives provide the means for achieving middle-
level objectives (ends) that, in turn, provide the means for achieving top-level objectives.
Planning in a complex environment
Because of the changing environments, managers can benefit from a contingency planning approach.
Multiple plans are developed based on different environmental conditions.
Contingency planning can be approached in 2 ways:
1. Having an alternative plan, a Plan B
a. Each alternative plan would be based on different conditions that could occur.
2. The Prepared minds approach
a. Rests on the skill and ability of people in the organisation to think strategically and
flexibly
The nature and the importance of planning
Planning can be defined as the managerial function that determines the organisation vision, mission
and goals, identifies ways of attaining the goals and finds the resources needed for the task within a
complex environment.
Planning done properly enables an organisation to create need-satisfying products and / or services
to its customers, to create jobs and to contribute to the wealth and living standards of the
community.
Determine the organisational vision, mission and
goals
Vision: A statement of what the organisation wants to become and where it wants to be in
future
Mission: Aligns the organisation with its vision in terms of its products and / or services,
market and technology. It can also set out the philosophy of the organisation in terms of its
values, ethics and beliefs.
A well written mission statement does the following:
o Defines the organisation for key stakeholders in terms of its product and / or
services, market and technology.
o It outlines how the vision is to be accomplished.
o Establishes key priorities for the organisation.
o States a common goal and fosters a sense of togetherness.
o It creates a philosophical anchor for all organisational activities
o It generates enthusiasm, buy-in and a ‘can do’ attitude amongst all stakeholders.
o Empowers present and future members of the organisation to believe that every
individual is the key to success.
Goal / objective: commitment to achieve a measureable result within a given time frame
Goals are the targets that organisation drives towards.
Good objectives – criteria:
o Should be expressed in quantitative terms so that it is measureable
o Should be expressed in specific terms
o Should state desired results
o Should be attainable
o Should be acceptable
o Should state results to be achieved within a given time period
o Should be congruent with one another
o Should be flexible
, Prioritising goals and objectives
This means that managers rank goals, objectives and activities in order of priority.
The most widely used techniques are the ABC priority system and the 80/20 rule:
A-B-C Priority System:
o Objectives can be grouped into 3 categories, A, B & C.
o A: Must Do
o B: Should Do
o C: Nice To Do
Pareto Principle
o The 80/20 Principle
o A minority of causes, inputs or effort tend to produce the majority of results, outputs
or rewards.
Identifying ways to achieve goals
Management also needs to identify ways of reaching an organisation’s goals.
This is referred to as ‘the ends-means chain of objectives’.
The setting of objectives is a top-to-bottom process – top management sets broader organisational
objectives with longer time horizons than lower levels of management.
This downward flow of objectives creates a means-ends chain.
The accomplishment of goals, is a bottom-up approach.
Working from bottom to top, lower management objectives provide the means for achieving middle-
level objectives (ends) that, in turn, provide the means for achieving top-level objectives.
Planning in a complex environment
Because of the changing environments, managers can benefit from a contingency planning approach.
Multiple plans are developed based on different environmental conditions.
Contingency planning can be approached in 2 ways:
1. Having an alternative plan, a Plan B
a. Each alternative plan would be based on different conditions that could occur.
2. The Prepared minds approach
a. Rests on the skill and ability of people in the organisation to think strategically and
flexibly
