1. Organisational planning

2. Detailed course schedule
The following table provides a list of lecture topics for each day of the course
Day no
Topic
Textbook ch.
1 (24 Nov; 2 hrs)
1. The nature and role of organisational management. Roles and tasks of organisational managers
Chs. 1-2
2 (25 Nov; 2 hrs)
2. Organisation and its environment
Chs. 3-5
3 (26 Nov; 2 hrs)
3. The process of organisational decision making
Chs. 7, 9-10
4 (27 Nov; 2 hrs)
4. Organisational planning
Chs. 7-8
5 (28 Nov; 2 hrs)
5. Organising
Chs
6 (1 Dec; 2 hrs)
6. Leadership
Chs
7 (2 Dec; 2 hrs)
7. Monitoring and control
Chs
8 (3 Dec; 1 hr)
8. Revision
9 (8 Dec; 2 hrs)
Examination

3. Topic 4: Organisational planning Topic Contents
4.1 Organisational strategy and planning 4.2 Strategic planning 4.3 Business planning and budgeting 4.4 Operational planning 4.5 Scenario development 4.6 Management skills in planning 4.7 Limitations of organisational planning 4.8 Further reading

4. 4.1 Organisational strategy and planning
An organisational plan is a statement of intent with stated goals and a description of a dated path to be followed to arrive at the desired destination (the end state)
The end state is normally given specific time frame, say an annual budget, but plans may be developed sequentially as a series of successive plan blue prints or they may evolve continuously (roll) into a rolling plan
Given the time dimension, we distinguish long-, medium-, and short-term plans (e.g., 5 year, one year, quarterly)

5. 4.1 Organisational strategy and planning
Strategy - an overall plan for deploying resources to establish a favourable position
intended (ex ante)
realised (ex post)
emergent (fuzzy)
Tactic - a plan for specific action
Strategic management - an application of strategy in activity management
Strategy making
planned - intended and design-based
behavioural - process-driven (realised through practical interaction between key players)
What business strategy is all about is, in a word, competitive advantage - Kenichi Ohmae, 1983

6. 4.1 Organisational strategy and planning
organisational OPERATING ENVIRONMENT
The Natural Environment
Technology
Input
Markets
Output
(Markets)
Inputs
Input-output
Transformation
Outputs
Socio-economic and Institutional Factors
Market Conditions

7. 4.1 Organisational strategy and planning
The planning process begins with the analysis of the organisational past and present, followed by the project of the desired activity into the future
The analytic stage may involve the use of the SWOT approach, the probing of
Strengths – S internal to the organisation
Weaknesses – W “ “ “
Opportunities – O external to the organisation
Threats – T “ “ “

8. 4.1 Organisational strategy and planning
PRESENT ACTIVITY FUTURE ACTIVITY
BUSINESS STRATEGY SWOT Analysis Future External OT Future Internal SW Business vision and mission WHAT? HOW? WHO? Specific objectives WHERE? WHEN? WHAT IF? Performance measures

9. 4.1 Organisational strategy and planning
Generic planning process
Formulate plans, goals objectives
Corrective Implement changes plans
Feedback from implementation
Goal: specific position which an organisation aims to reach
Objective: defined and measurable outcome to be achieved

10. 4.1 Organisational strategy and planning
Planning processes
Strategic
Business
Operational
Corporate Investment Corporate Strategic Plan Corporate Budget
Plan
Business Unit Strategic Business Unit Business Unit
Investment Plans Plans Budgets
Operational Business Unit Plans
Production Master Plans, etc.

11. Strategy is an organisation’s game plan
4.2 Strategic planning
Strategic or perspective planning:
gives sense of purpose and coherence to collective decision making
reduces uncertainty
provides inter-temporal consistency and coordination of objectives and resource use
links mission with vision
communicates business mission and core values
offers room for stretching into more ambitious target
Strategic planning should produce
company’s vision (future destination)
mission statement (purpose, modus operandi, social responsibilities)
Strategy is an organisation’s game plan

12. 4.2 Strategic planning
SWOT assessment (external and internal assessment of strengths, weaknesses, opportunities and threats
strategic choices (short list of strategic options)
generic strategies (who are we? e.g., volume producer)
grand strategy (strategic plan)
Organisational strategy and strategic plan should determine:
business philosophy and core values
field of activity/operating environment
vision, mission and objectives
capabilities (incl. technologies)
resources (human and non-human)
organisational structures
management and information systems
Location and timing of activities

13. Strategic planning loop involves:
the analysis of broader operating environment as well as own capabilities and values
the setting of transparent, consistent and transitive objectives
the determination of resource requirements and best ways of deploying them
risk management and resolution of trade-offs
implementation of preferred strategies
evaluation of outcomes
corrections and improvements
But, all this may not be fully disclosed in public domain
Disclosure of intentions is part of strategy and business tactics

14. 4.2 Strategic planning Strategic planning should pave the way to:
action plans and functional tactics to operationalise grand strategies
company policies to facilitate strategy implementation (e.g., HRM policies, operating guidelines)
organisational design (business process re-engineering)
Key Performance Indicators (KPI) to monitor plan implementation and assess organisational performance
strategic control mechanisms (tracking a strategy, evaluation, feedback, improvement)
Strategic planning may also involve succession planning (e.g., private companies, CEO arrangements)
Scenario projections are often the first step in the strategic planning sequence

15. 4.3 Business planning
Business planning translates strategic planning into specific medium term objectives by focusing on:
removal of barriers to continuation and growth
pathway for achieving set targets
proposals for achieving target growth and profitability
sources of finance for operations and investment
risk management
flexibility in dealing with contingencies
organisational resilience
key stakeholders, partners and collaborators

16. 4.3 Business planning Conventional Business Plan structure
Executive Summary of the whole concept
Business profile – description of the focal organisation’s activity (business)
Product/market analysis – chosen product lines, markets/areas of activity and position in these markets
Marketing plan – strategies to attract/retain customers
Legal and risk management plan
Operating plan – description of intended production
Management and personnel plan – HR issues
Finance plan – forward estimates and budgets
The action plan – what to do, how and when

17. 4.3 Business planning
Key aspect of business planning (medium and short term planning) is contingency planning dealing with the disruptive, uncertain events – what to do if …
Business plans have also to be specific as to the allocation of functions, roles, the division of labour within the organisation and the engagement with external input/service providers
Plans have to be credible otherwise they add to uncertainty by projecting the image of randomness

18. 4.4 Operational planning
Strategies tend to be medium- and/or long-term and need to be translated into tangible, short term objectives and operational action plans
Operational action plans provide dated and measurable operational framework for specific functional/ operational decision making (e.g., a production master plan)
what to do
when to do it
how to do it
who should do it

19. Organisational structures to be aligned with strategies
4.4 Operational planning
Action plans to provide the framework for the assignment of functional/operational tasks to operational units (operational tasking or functional tactics)
Policies and standard operating procedures to provide framework for devolved decision- making
Organisational structures to be aligned with strategies
The distribution of decision-making authority and responsibility to be aligned with strategy and reinforced by appropriate incentive/reward systems

20. Action plans facilitate
4.4 Operational planning
Action plans facilitate
allocation of functional/ operational tasks and responsibilities (functional tactics in the textbook);
prioritisation of operational tasks; and
resolution of trade-offs and conflicts
Action plans provide the basis for strategic control and evaluation of short-term performance
They are also a learning mechanism revealing the firm’s short-term capability, bottlenecks, and so on

21. 4.4 Operational planning
Functional/operational tasks are assigned to each functional area of the business (e.g., marketing, production, distribution) to direct various short-term activities
Functional tasks
tell functional managers what needs to be done at the functional level to implement the overall business strategy
tell higher level management how the firm’s business strategy has been funnelled into specific operational tasks
help to coordinate functional activities by identifying areas of interdependence and trade-offs
Functional tasks have inherently short-term focus

22. 4.4 Operational planning
Policies/standard operating procedures provide a combination of directives, to guide employees and other stakeholders into achieving particular outcomes, and constraints (e.g., prohibitions, restrictions) to stop them from undertaking some undesirable activities
Efficient policies reduce organisational transaction costs (less organisational uncertainty and stress) and enhance outcomes (more organisational synergy)

23. 4.4 Operational planning
Policies, like plans, may be formal or informal, internally generated or imposed from outside but they should be
transparent
consistent
non-ambiguous
traceable
Modifiable
Complex/diversified business entities may be treated as separate, self-contained divisions or subsidiaries but there are risks in aggregating component data when assessing the whole business
Technical evaluation is often complex and detailed but its final outcome may be presented in concise form, e.g., score matrices, graphs

24. 4.5 Scenario development
This provides a way of specifying a particular configuration of future events (scenario) to test a particular plan or strategy on the what-if basis
Often a small number of long term scenarios (20-50 years ahead) are considered by national or large corporation planners to consider technological developments, political changes or population demographics
But, scenario development and strategic or business planning cannot deal with rare unanticipated events, the so-called black swans (e.g., global financial crisis)

25. 4.5 Scenario development
Action A Opportunity frontier at time t (combinations of A & B) Scenario X Scenario Y Scenario Z Action B

26. 4.6 Management skills in planning
Management skills needed in organisational planning
Organisational
Technical
Analytic
Conceptual
Political
Communications

27. 4.7 Limitations of organisational planning
Overreliance on plans and overconfidence of planners, in particular forcing reality to confirm with the plan regardless (re: Soviet style planning)
Biases and errors – lack of foreknowledge makes plans inaccurate
Excessive detail – spurious accuracy
Inadequate detail – vagueness
Planning is costly as it is knowledge-intensive
Moral hazards of planning – opportunistic or perverse behaviour of those affected by it

28. 4.8 Further reading
Griffin (2013): chs. 7-8
Combe (2014): ch. 3