Planning is an administrative function that includes analyzing a situation, setting objectives, formulating strategies to achieve those objectives, and developing action plans that indicate how to implement those strategies. In other words, planning looks at where we are, establishes where we want to go, and points out what we are going to do to get there and how we are going to do it.

Planning is the first administrative function as it serves as the basis for other functions (organization, coordination and control). By proposing objectives and pointing out what is going to be done to achieve them, it allows better organization of company areas and resources, better coordination of tasks and activities, and better control and evaluation of results (by comparing the results obtained with The planned ones).

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

Reduces uncertainty and minimizes risk: by anticipating changes in the environment and pointing out how they will react to them as soon as they arrive, it reduces uncertainty in the future and minimizes the risk that such changes will adversely affect the business.
Generates efficiency: by proposing concrete objectives and pointing out what is going to be done to achieve them, avoid improvisation and, on the contrary, allows a better coordination of tasks and activities, and a better use of resources.
Generates commitment and motivation: being a process that involves all the members of the company and require the participation of several of these in its elaboration, generates commitment and identification with the objectives, and with it, motivation in its achievement.
It is often thought that planning is something that is only the responsibility of large companies; However, the truth is that this is fundamental to the success of any company regardless of its size, especially in this era of changes where it is practically an obligation to anticipate the future.

Planning process

In addition to being an administrative function that includes the analysis of a situation, the establishment of objectives, the formulation of strategies, and the development of action plans, it is also possible to define planning as the process through which each one is carried out Of these activities.

Next, each of the stages that make up the planning process:

1. Analysis of the situation

The planning process begins with the analysis of a situation.

In the case of general enterprise-wide planning (strategic planning), an analysis of the situation could involve the analysis of the different external forces that affect or could affect the company (economic forces, social forces, government forces, forces Technological, consumer, competition, etc.), as well as the analysis of the different areas that may exist in the company (administration, marketing, finance, human resources, production, etc.).

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

And in the case of operational level planning (operational planning), an analysis of the situation could involve the analysis of the elements needed to perform a specific task or activity; For example, could involve analyzing the resources available to carry out the task or activity, the time frame, the available budget, etc.

The reason for an analysis of the situation is to have a basis for setting goals; For example, when analyzing the external forces that affect or could affect the company, it is possible to detect changes in the environment, and thus to establish objectives that allow them to take advantage of or to cope with them; Or when analyzing the different elements that may exist in the company or in a certain area, it is possible to know the resources and capacities with which they are counted, and thus to establish objectives that allow them to take advantage of them or to considering.

2. Setting Goals

After the situation analysis, the next stage of the planning process is the setting of objectives.

Objectives should be established based on the analysis of the situation previously performed; For example, objectives that allow to take advantage or to face the changes detected in the environment, that allow to take advantage or that take into account the resources and capacities with which the company or a certain area counts, or that consider the resources and the conditions that You have to perform a specific task or activity.

The objectives of a company are usually classified according to different aspects, but at the moment of planning, it is common to classify them according to their hierarchy in strategic objectives, tactical objectives and operational objectives:

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

3. Strategy formulation

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

Strategies should be put in place to achieve the proposed objectives in the best possible way, but also to take into account the analysis of the situation; For example, strategies that are feasible for the company or for a certain area considering the resources and capacities that they count on.

As in the case of the objectives, the strategies of a company are also usually classified according to different aspects, but at the moment of making a planning the common thing is to 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 that seek to achieve organizational objectives. Examples of organizational strategies are “acquiring one of the suppliers of the company”, “entering a new geographic market”, “forming a partnership with another company”, etc.
Functional strategies: functional strategies are strategies that affect a certain functional area of ​​the company and that seek to achieve tactical objectives. Examples of functional strategies are “endowing the product with new features”, “using a new training program”, “accessing a new source of funding”, etc.

4. Design of action plans

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

The action plans are documents that specify the tasks and other elements necessary to implement or execute the strategies formulated.

Some of the elements that usually contain the action plans are:

The tasks to be performed: the tasks, activities or actions that will be carried out to implement the strategies.
The allocation of resources: the resources that will be used to carry out the tasks and implement the strategies, and the way in which they are to be distributed.
Responsible and responsible: those responsible and responsible for carrying out the tasks and implement the strategies.
The program of tasks: the program or schedule with start dates and deadlines to carry out the tasks and implement the strategies.
The budget required: the investment required to perform the tasks and implement the strategies.
The action plans serve as a guide for implementing or executing the strategies, and as a control tool by verifying that the tasks are being carried out as specified, and that they are being met within the agreed time frames; But also serve to make the objectives, strategies and everything planned is the knowledge of all members of the company or the area for which the planning has been done.

 

 

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