Lesson 1, Topic 1
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2.3. The Four Basic Management Functions Planning

ryanrori December 31, 2020

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Determines the organisation’s mission and goals.

How is the organisation going to achieve its goals and objectives and what resources are required to achieve these objectives?

The second phase of planning involves the formulation of a realistic plan, outlining what resources and activities are going to be utilised to achieve success.  Programmes, budget, standards of production and service delivery, due dates, and rules and regulations are also formulated during the planning process.

The nature of the planning function is such that making decisions works hand-in-hand with planning.  Top management plans the overall objectives and goals and makes a decision to implement these goals and objectives.

Middle management gets the overall organisational plans and formulates goals and objectives that apply to their own departments or divisions.  The goals and objectives for the department are formulated in a plan and it will include the proposed utilisation of resources, timelines, standards of production and service deliveries.  The decision is then made to implement these plans so that the goals and objectives are met.

Why is planning necessary?

If You Are Not Sure Where You Are Going, You Are Liable To End Up Somewhere Else!

Strategic planning

Is sometimes called overall corporate planning. It relates to the general objectives of the organisation, the corporate mission, the present and proposed markets of the organisation, growth plans, divestment, acquisition or diversification.  Strategic plans are formulated by top management and focus on the entire organisation.  These plans are long term and look at how the organisation should use its resources according to the opportunities and threats in the external environment as well as how it can gain a competitive advantage.

Functional planning

Relates to a particular function such as marketing or production. Middle management formulates plans within the function and is concerned with the attainment of short or medium term objectives.

Functional plans are made in the light of short term corporate objectives. The attainment of long term strategic objectives will normally depend upon the attainment of a succession of short term functional objectives.

Functional plans can take many forms, two of which are:

Tactical plans

Focus on specific areas of management such as marketing, financial, human resources.  Tactical plans are specific: resource allocation, timelines, human resource commitments.  These plans are usually drawn up by middle management in consultation with other middle level managers, as the tactical plans for different departments have to complement each other.  Middle management will usually also consult with first level managers.

Operational plans

Are formulated by first level managers in consultation with middle management.  These plans focus on carrying out tactical plans.  They have a narrow focus and a short time span.  These plans govern the day-to-day activities of the department and section. 

Junior managers get the plans, including goals and objectives that have bearing on their sections.  They then draw up their short-term plans that will give them the indication of what has to be done on a day-to-day basis in order to achieve their goals and objectives.  They then make the decision to implement these short-term plans.  Junior managers are very involved in the management of resources, especially machinery and equipment, workers, materials, and methods – how to get the job done on time at the required standards and in the required quantity.

Once the decision has been made, it must be communicated to the relevant parties.  If they don’t know what they are supposed to do, how will they be able to do it?  This applies to all levels of management, all levels of planning and all levels of decision-making. 

Of course, making the decision and communicating it to the people who have to do it also involves delegating the tasks to the people who have to do the work.

So we see that the planning function, the decision-making function, communicating and delegating the work go together.