This article addresses the need to know the essential theoretical elements about planning, its principles, its purpose and its importance, as well as the mistakes that are most frequently made when planning. A test is also included so that the interested reader can diagnose their knowledge about business planning and test their skills in this regard.
If you are a practicing manager, you will surely have drawn up various plans many times, but… do you really know what planning is and what are its secrets? Here is the opportunity to test your knowledge:
- What is planning?
- Establish the order of resources and the functions that the members of the company must perform in order to achieve the purposes.It consists of setting the specific course of action to be followed, establishing the principles that will guide it, the sequence of operations to carry it out and the determination of time and numbers necessary for its realization. It consists of making the staff work so that the purposes of the company are achieved.
- Objectives, Alternative courses of action, Choice, Future… Objectives, Strategies, Time, Choice… Choice, Objectives, Future, Time…
- Need, Inspection, Commitment, etc. Commitment, Unity, Strategies, etc. Accuracy, Flexibility, Feasibility, Unity, etc.
- Flexibility Universality Rationality
- Decision.Planning Decision-making
- Scheduled decisions Unscheduled decisions Qualitative decisions
- Planning techniques and tools Planning Types of plans
- Flowchart Pert Analysis Gantt Chart
- The operative ones and the business ones. Productive, control and operational. Stability or survival and competitive generic ones.
- It is a tool par excellence of Strategic Management, it consists of the search for one or more competitive advantages of the organization and the formulation and implementation of strategies allowing to create or preserve its advantages, all this based on the Mission and its objectives, the environment and its pressures and available resources The pattern of response of the organization to its environment It is a process that begins with the establishment of organizational goals, defines strategies and policies to achieve those goals, and develops plans detailed to ensure the implementation of the strategies and thus obtain the desired ends.
Once your questions are answered, check the answers at the end of the article, analyze what your mistakes have been, and then move on to delve into those areas where you did not get a satisfactory rating.
Planning Concept
Every manager is interested in his company being effective and efficient, that is to say that it fulfills its mission, its social order and does it in such a way that its product or service is profitable, in addition to satisfying the expectations of its clients, maintaining a harmonious relationship and mutually advantageous with the environment. That is why they tend to spend a lot of their personal time and effort to personally attend and take care of all the details that intervene in the achievement of these purposes, through the exercise of the general functions that make up the administrative cycle.
This cycle, as a system, must necessarily have a guiding element, and this role is performed by the Planning function. The success of the management of any organization depends to a great extent on the skill with which this important function is exercised; it is for them that in this chapter we want to explore, together with the reader, the most intimate secrets of planning, for the sake of that knowing it deeply we can make an efficient exercise of it.
In other words, within the system integrated by the general functions of the management, the Planning is the one that marks the course that the managerial actions will take; In other words, the goals that are proposed through the planning process will determine the form and orientation of the exercise of the remaining functions that make up the Administrative Cycle, as Fernández Arenas confirms when he assures: “Planning is the first step of the administrative process by means of which a problem is defined, past experiences are analyzed and plans and programs are obscured »
Planning is about choosing a course of action and deciding in advance what should be done, in what sequence, when, and how. Good internal planning considers the nature of the future in which planning decisions and actions are intended to operate, as well as the ongoing period in which plans are made.
Prior to any management cycle, or administrative or business action, it is essential to specify what the expected results will be, that is, to set the purposes of the action, as well as the future conditions and the resources necessary for them to be achieved. This is the essence of the planning function, since it is through it that it is possible to set goals and foresee all the necessary resources as well as future scenarios where the organization's management will take place. Disregarding these preliminary analyzes involves serious risks, and can lead to wasted effort and resources, as a consequence of fortuitous and improvised administration.
That is why planning initiates the stages of the administrative process, and conditions them even more; since planning implies selecting and implementing the most convenient decisions about what will be done in the future, to achieve the organization's objectives, either in the medium or short term. Only the effective exercise of planning allows the risk risks to be determined in advance and to have the strategies and actions to minimize it. From this consideration, it is easy to conclude that the success of management depends largely on adequate planning, and that good results are not achieved by themselves: it is necessary to plan them in advance.
Various authors and researchers in the economic sciences have established their own definitions of this important managerial function. For Reyes Ponce "Planning consists of setting the specific course of action to be followed, establishing the principles that will guide it, the sequence of operations to carry it out, and the determination of times and numbers necessary for its completion."
For his part, Dale, E.; Terry, G; Kazmier, LJ and Scalan, BK focus their definitions on the determination of a set of objectives and the determination of the pathways, methods and techniques to be used to achieve them. While Massie, JL and Anthony, RN define it with emphasis on its future projection, as an intellectual exercise that allows to envision future scenarios and weigh the risks of the organization's performance in them. All of which is evidenced in the summary presented in the following table.
| Author | Planning Concept |
| Ernest dale | Determination of the set of objectives to be obtained in the future and the steps necessary to achieve them through defined techniques and procedures. |
| George R. Terry | Planning is the selection and relation of facts, as well as the formulation and use of assumptions regarding the future in the visualization and formulation of the proposed activities that are believed to be necessary to achieve the
expected results. |
| LJ Kasmier | Planning consists of determining objectives and formulating policies, procedures, and methods to achieve them. |
| Burt K. Scalan | System that begins with the objectives, develops policies, plans, procedures, and has an information feedback method to adapt to any change in circumstances. |
| Joseph massie | Method by which the administrator looks to the future and discovers the alternative courses of action, from which he establishes the objectives. |
| Robert N. Anthony | Planning is the process of deciding the actions that should be carried out in the future, generally the planning process consists of considering the different alternatives in the course of the actions and deciding which of them is the best. |
| Jorge L. Oria | Continuous and dynamic administrative function of selecting between various alternatives, the objectives, policies, procedures and programs of an organization. |
| Robert Murdick - Joel Ross | It is the thought that precedes action, includes the development of alternatives and the relationship between them, as a necessary measure of action to achieve a goal. |
| Henry Sisk - Mario Sverdlik | Analysis of relevant information from the present and the past and a weighting of probable future developments, in such a way that a course of action can be determined that enables the organization to achieve its objectives. |
*Source: self made
Planning can be characterized according to the following distinctive features:
- It is a permanent and continuous process It is always oriented towards the future It pursues rationality in decision-making It involves the selection of a course of action among several alternatives It is systemic It is recurrent It is a cyclical technique It maintains a synergistic relationship with the remaining functions of the Administrative Cycle. It is a technique of coordination, integration, change and innovation.
Despite all the exposed aspects, which show the unquestionable advantages of planning to develop a successful management, the quality, efficiency and effectiveness of planning can be compromised by some factors such as:
- Planning is limited by the accuracy of information and future events Planning costs a lot: Some argue that the cost of planning exceeds its actual contribution Planning has psychological barriers: A common barrier is that people take more into account the present rather than the future.Planning stifles initiative: Some believe that planning forces managers to a rigid way of executing their work.Planning delays actions: Emergencies and sudden appearances of unusual situations demand decisions on the spot. Planning has limited practical value: Some claim that planning is not only too theoretical, but other means are more practical.
Planning Principles
In specialized literature, it is possible to find some differences in nuances when stating the principles of planning, but it is also possible to generalize the common essences, mostly accepted, of them, which are summarized below:
- Principle of universality. It involves the inclusion of the entire universe of factors that promote the development of the plan effectively, namely: time, personnel, materials, budget, etc. Principle of rationality. The support of the plans must be supported by the use of logic, so they must include achievable goals, which have the necessary resources to bring them to fruition. Precision principle. To achieve the fulfillment of the goals with the desired effectiveness and efficiency, it is essential to carry out the planning process with a high degree of precision, which closes the way to the eventual and improvisations. Plans must constitute a solid structure from which adaptations to specific conditions of the immediate future can be calculated. Principle of flexibility. Compliance with the above principle, however, must leave a margin for changes that may be necessary to introduce, due to unforeseeable variations in the surrounding circumstances, which take place after the conception of the plan, even though this approach may be considered as contradictory, any plan must be simultaneously, precise enough to minimize changes due to foreseeable variations, and flexible enough, to assimilate the changes that need to be introduced due to unforeseeable variations. Note that rigidity is not the same as accuracy. The principle of unity. All plans drawn up in the organization must respond to a single general plan, for which it is necessary to guarantee their coordination and integration. The plans of the different functional areas of the entity must be coordinated in such a way that all the applicable rules of action can be found in the same plan. that all the purposes and interests are combined, in a single document that collects the goals of the organization in a comprehensive manner.
In Cuban state companies, it is also necessary to achieve the active participation of all members of the organization, since in a socialist society, the workers are the legitimate owners of the means of production. On the other hand, it is a way of guaranteeing the involvement and emotional commitment of all employees with the goals of the organization. Principle of feasibility. What is planned must be achievable; there is no point in making plans that are too ambitious or optimistic that are impossible to achieve. Planning must adapt to reality and to the objective conditions that act in the environment. The principle of compromise. This principle indicates that medium-term planning is the most convenient because it ensures that the company's commitments fit in the future, preserving time to better adapt its objectives and policies to discovered trends, to unforeseen changes. On the other hand, planning must include the commitment of all members of the organization to carry out the decisions adopted in its exercise. Limiting factor principle. The planning exercise assumes that the administrators have the necessary competencies to detect the factors that may limit or stop the achievement of the organization's goals and purposes. This principle emphasizes the importance of objectivity when selecting a course of action among different alternatives to achieve the proposed ends. Inherence principle. This principle sustains that planning is inherent in any human organization and is a necessary condition of administration. Only through effective planning can the organization be successful, guarantee management efficiency and offer timely responses to changes in the environment where it is inserted.
Purposes of Planning: what do we plan for?
Within the system of administrative functions, the planning function has three essential purposes, which are derived from the very reason for the existence of the organizational system:
- Minimize risk: planning protects the organization, significantly reducing uncertainty around the businesses in which it operates, and clarifying the possible consequences of possible administrative actions. It should be noted that this purpose will be fulfilled to a greater extent, the higher the quality of the information on the system itself and the business environment, it is taken as a starting reference for the planning process. In this sense, the organization must have a business intelligence system that provides abundant and reliable information about customers, competitors, suppliers and its own business capacity in the immediate and immediate future. Guarantee the development of the organization: planning not only aims to guarantee the success of the organization in a given period, but one of its essential purposes is to achieve the permanent growth of management. If success is understood as the insertion of the organization in its context with competitive advantages, increasing its impact area in it, it will be clearly understood that the effective exercise of planning must necessarily lead to higher levels of management - both quantitatively and qualitatively - in each new cycle. Achieve effective coordination: the proper exercise of planning lays the foundation for coordinating the efforts of all members of the organization to achieve the desired levels of business efficiency. This planning purpose will be achieved to a greater extent, when workers actively participate in setting organizational goals, since from the very conception of the plan, the coordinated action of all those involved in its implementation will be achieved. When the plan is conceived through the use of collective intelligence and the emotional commitment of the participants, the mutual adjustment mechanism acts as a guarantor of a more effective coordination.
When the theoretical aspects previously exposed are taken into consideration, the importance that it has for the achievement of organizational success becomes evident. However, despite its need and importance, its effectiveness is very often limited by mistakes made during the planning process.
Most frequent mistakes in the Planning Process
According to research carried out in the field of business administration, it has been concluded that the most common errors in the planning process are the following:
- Do not take into consideration the macro-economic environment Do not carry out the analysis of the Strengths, Weaknesses, Opportunities and Threats that are present in the internal and external context of the organization where planning is carried out. (SWOT analysis) Ignore the human factor and its impact on the overall results of the process Minimize the importance of communication to obtain the commitment of all those involved in the process Do not take advantage of the power of alliances Do not adequately clarify the goals, making them diffuse and not very understandable.
Conclusions
Planning is the guiding function of the management process, which is why it is of paramount importance for the achievement of the success of an organization, expressed in terms of the achievement of its goals and purposes. Due to its guiding nature, the planning function sets in motion the management process, giving rise to the exercise of the remaining administrative functions, consequently, the absence of planning significantly limits the growth of an organization. For planning to be effective, it is necessary to take into account the principles that support it, and take into account the opportunities and threats rooted in the organizational environment, as well as the internal strengths and weaknesses of the company, including the analysis of the influence of the factor human in the achievement of organizational objectives.
Bibliography
- Arellano, D. 2004. Strategic Efficiency: How to achieve it? www.gestiopolis.com. 2004. Barthelmes, C. 2005. Strategic Planning in Organizations. www.monografias.com.htm. March 7, 2005. Betancourt Tang, JR 2000. Strategic Management: Navigating towards the $ to. Paradigm. Conceptual Aspects. Caracas: TGRED Editions 2000, 2000.Cardona Labarga, JM 2008. Twenty Strategies to Survive until 2010. www.cardonalabarga.com. May 20, 2008. Giraldo López, JA 2004. Administrative Planning. www.gestiopolis.com. July 7, 2004. Gómez Nodarse, IM 2002. Complementary Material for the Strategic Management Subject.. Bachelor of Accounting and Finance. Matanzas: University of Matanzas., 2002. Gómez Nodarse, IM; Pavon Hernández, A.2012 Planning and Organization as Guiding Functions of Business Administration. Editorial Academia Española. 2012González Solán, O. and De la Vega Yabor, JL 1997. The Strategic Management Control Systems for Organizations. www.monographies.com. 1997. Heredia Chumacero, MA 2008. Introduction to Strategic Planning. June 26, 2008. www.monografias.com.Koontz, H. 1994. Elements of Administration. México: Mc.Graw Hill Hispanoamericana., 1994.Menguzzato, M. 1997. The Strategic Direction of the Company. Madrid: Biblioteca Empresa, 1997. Mintzberg, H. 1997. The Strategic Process. Mexico: Mc. Graw Hill Interamericana, 1997. Olivera Rodríguez, CA 2007. Strategic Exercise: Guide for the Consultant. User information. Matanzas: Department of Management Techniques. Matanzas University «Camilo Cienfuegos»., 2007.Stoner, J. 1995. Administration. 5th. Edition. Havana: ENPES, 1995.
Appendix
Solution to the initial questionnaire
The correct solution to the test that starts the chapter is given below. We hope you are among those fortunate whose knowledge of planning allows them to do without reading.
1 B, 2 A, 3 C, 4 B, 5 B, 6 A, 7 A, 8 B, 9 C, 10 A
Give yourself 10 points for each correct answer. Minimum acceptable score: 80 points.
