Concept-and-Importance-of-a-Business-Plans-&-Ideas-Business-Management---tinoshare.com---blogowebgo.com
Concept-and-Importance-of-a-Business-Plans-&-Ideas-Business-Management---tinoshare.com---blogowebgo.com

Planning (creating) is an administrative function comprising a situation analysis, setting goals, formulating strategies to achieve those objectives, and develop action plans that indicate how to implement those strategies. In other words, planning analyzes where we are, where we want to set, and points out what we will do to get there and how we are going to do.

Planning is the first administrative role since it serves as the basis for other functions (organization, coordination and control). In proposing objectives and identify what is to be done to achieve them, it helps them organize the areas and company resources, better coordination of tasks and activities, and monitoring and evaluating better outputs (allowing to compare the results with planned).

concept and importance of planning

But besides serving as a basis for other administrative functions, planning is important because of the following reasons:

  • It reduces uncertainty and minimizing risk : to anticipate changes in the environment and indicate how it will react to these as they arrive, reduces uncertainty in the future and minimize the risk that these changes adversely affect the company.
  • generates efficiency : to propose specific objectives and indicate what is to be done to achieve them, avoid improvisation and, by contrast, allows for better coordination of tasks and activities, and better use of resources.
  • It generates commitment and motivation : to be a process that involves all members of the company and require the participation of several of these in their development, generates commitment and identification with the goals, and thus their achievement motivation.

They often think that planning is something that only is responsible to large companies;however, the truth is that this is critical to the success of any enterprise regardless of size, especially in this time of change where it is almost an obligation to anticipate the future.

Planning process

Besides being an administrative function comprising the analysis of a situation, setting goals, developing strategies, and develop action plans, it is also possible to define planning as the process through which it is performed each of these activities.


 

Then each of the steps in the planning process:

1. Analysis of the situation

The planning process begins by analyzing a situation.

In case of a general planning for the whole company (strategic planning), an analysis of the situation could involve the analysis of various external forces that affect or could affect the company (economic forces, social forces, government forces, forces technology, consumers, competition, etc.) and analysis of different areas that may exist in the company (management, marketing, finance, human resources, production, etc.).

In case of an applicable planning only to a particular area of ​​the company (tactical planning), an analysis of the situation could involve the analysis of the different elements that may exist in this area; for example, the marketing department, it could involve the analysis of the product, price, distribution, promotion, advertising, customer service, etc.

And if it is an operational level planning (operational planning), an analysis of the situation could involve the analysis of the elements necessary to perform a specific task or activity; for example, could involve the analysis of the resources it has to perform the task or activity that is within the available budget, etc.

The reason for an analysis of the situation is to have a basis for setting targets;for example, to analyze the external forces that affect or could affect the company, it is possible to detect changes in the environment, and establish targets to use them or deal with them;or to analyze the different elements that may exist in the company or in a particular area, you may know the resources and capabilities with which account, and establish targets to use them or take them into account.


 

2. Setting goals

After analyzing the situation the next stage of planning is goal setting.

They should set targets based on analysis of the situation previously performed; for example, aims to harness or cope with the changes detected in the environment, to harness or to take into account the resources and capabilities are there in the company or a particular area, or to consider the resources and conditions you have to perform a task or activity.

The objectives of a company are usually classified according to different aspects, but the time for a planning is usually classified according to their hierarchy in strategic goals, tactical objectives and operational objectives:

  • Strategic objectives : strategic (or organizational) goals are general and long-term objectives that consider the company as a whole and that seek to define the course of this. Examples of strategic objectives are “to be the market leader,” “achieve greater market share,” “being a recognized brand in the market”, etc.
  • Tactical objectives : tactical (or departmental) objectives are medium-term objectives given level areas or departments. Examples of tactical objectives are “to increase sales by 20%,” “increase production efficiency by 10%,” “reduce the level of absenteeism of employees by 15%”, etc.
  • Operational objectives : operational objectives are specific and short-term objectives are given at the operational level and involving the tasks or activities of each area.Examples of operational objectives are “to increase the efficiency with which a task is performed”, “reduce the time in which an activity is performed”, “improving the effectiveness of an advertising campaign”, etc.

 

3. Strategy formulation

After the establishment of the objectives, the next stage of the planning process is the formulation of strategies.

They should establish strategies to achieve the objectives in the best way possible, but also to take into account the analysis of the situation made; for example, strategies that are feasible for the company or for a given area taking into account the resources and capabilities at their disposal.

As in the case of the objectives, strategies of a company often also be classified according to different aspects, but when making a planning is usually classify them according to their hierarchy in organizational strategies and functional strategies:

  • Organizational strategies : organizational strategies are strategies that affect the company as a whole and seeking to achieve organizational objectives. Examples of organizational strategies are “purchased one of the suppliers of the company”, “breaking into a new geographic market”, “form a partnership with another company”, etc.
  • Functional strategies : functional strategies are strategies that affect a particular functional area of the company and seek to achieve tactical objectives. Examples of functional strategies are “providing the product with new features,” “use a new training program,” “access to a new source of financing,” etc.

4. Design of action plans

After the formulation of strategies, the next and final stage of planning is designing action plans.

The action plans are documents in which the tasks and other elements necessary to implement or execute the strategies developed are specified.

Some of the elements that usually contain action plans are:

  • the tasks : the tasks, activities or actions that are to be made ​​to implement the strategies.
  • the allocation of resources : the resources that will be used to perform the tasks and implement strategies and how they will be distributed.
  • makers and managers : those responsible and responsible for carrying out tasks and implement the strategies.
  • the program of work : the program or schedule with start dates and deadlines to perform the tasks and implement the strategies.
  • the required budget : the investment required to perform the tasks and implement the strategies.

The action plans provide guidance to implement or execute the strategies, and as a control instrument to enable verification that the tasks are being carried out as specified, and are being met within the agreed deadlines; but also they serve the objectives, strategies planned and everything is known to all members of the company or the area for which the planning has been done.


Types of planning

As in the case of the objectives and strategies, planning of a company often also classified according to the hierarchical level where it is carried out in strategic planning, tactical planning and operational planning.


Strategic Planning

The strategic planning is that which occurs at the organizational level.

Strategic planning in the business environment and internal situation is analyzed, establishing strategic objectives, organizational strategies are formulated, and action plans that seem simple and generic but are designed to affect a variety of activities (strategic plans) .

Other features of strategic planning are:

  • considered a global approach to business.
  • It is elaborated by the leadership of the company (owners or senior managers).
  • is projected long-term (in theory for a period of 5 years over, but today in practice, due to the constantly changing environment, for a period of 3-5 years).
  • is the basis for other plannings of the company (tactical planning and operational planning).

Tactical planning

Tactical planning is one that is given to functional or departmental level.

Tactical planning in the situation of a particular area or department analyzes, tactical objectives are established, functional strategies are formulated, and action plans are designed with a smaller but more detailed than strategic (tactical plans) range.

Other features of the tactical planning are:

  • considers only a specific area or department of the company.
  • It is made by managers or heads of each area.
  • It is projected to medium term (for a period of 1-3 years).
  • It is governed on the basis of strategic planning.

Operational planning

Operational planning is one that is at the level of operations.

Operational planning in the situation of the necessary elements is analyzed to perform a specific task or activity, operational objectives are established, simple strategies or courses of action are made and action plans or programs are designed with a shorter range but more detailed than tactical (operational plans).

Other features of operational planning are:

  • considers only a specific task or activity.
  • It is made by the chiefs or heads of each team.
  • is projected short-term (for a period not exceeding 1 year).
  • It is governed in terms of the tactical planning.

Features planning

Planning is critical to the success of an enterprise; however, not all companies that apply do better than those who do not, it is not enough to do any planning but requires it to have some features.

The following are some features that should have all planning:


It is accurate

Planning should include specific objectives expressed in terms of amount and time such as “increase sales by 20% next quarter,” that yield a benchmark to measure the results (although it may also consider general objectives such as “to be the market leader “to help set a course, but as long as they are accompanied by specific goals) and strategies or concrete actions to know exactly what needs to be done to achieve the objectives.


It is feasible

To propose ambitious and challenging objectives capable of generating enthusiasm, but both are feasible; that is, they are within the capabilities of the company or the area that has been done, considering environmental conditions, and the resources and capabilities that are included; as well as strategies and courses of action equally feasible given the available resources and capacities.


It is consistent

You should consider all the objectives, strategies and plans made in the company and ensure that all these elements are mutually consistent; for example, it must ensure that the objectives of an area or department are aligned with the overall objectives of the company, but also with the objectives of the other areas or departments.


It is constantly evaluated

Not only should evaluate the results of planning, but also from time to time should evaluate their development; for example, to see whether these objectives still remain the goals to be achieved taking into account the new environmental conditions, or to see if the strategies outlined can be improved taking into account the resources and capabilities which now account .


It is flexible

Planning should not be written in perish but be flexible enough to allow changes, adjustments or corrections as you go running; for example, when due to sudden changes in the environment necessary to set new objectives that fit these, when due to a major change in the availability of resources in the area which has been made necessary to change strategies, or when because they are not getting the expected results needed to correct the action plans.


It is permanent

Finally, planning is not something that is done once and ending with the implementation of the action plans, it is a permanent and continuous process where once reached the proposed objectives, should propose new targets, and with it, new strategies and plans of action to achieve them.


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