Planning Basics

''He who fails to plan is planning to fail''  Winston Churchill.
Planning is  a very essential aspect of management as illustrated by the  above statement, Planning is the most basic of all management functions, it involves selecting from among alternatives future courses of action, and also it helps to determine how the other four functions of the manager would be implemented. For instance a manager organizes, staffs, leads and controls in order to assure the attainment of goals according to plans.



What then is planning?
They are many definitions of planning, these include:

1.Planning is the process of coping with uncertainty by formulating future courses of action to achieve specified results.

2. planning has been defined as  the design of the desires and of effective ways of bringing it about.


3. Planning is the process of systematic determination of what needs to be achieved and mental arrangement of actions and resources required to achieve it.

Planning is an important function of management, because it helps managers to achieve set  goals and objectives by envisioning a pathway from concept to reality. Planning can be called the primary management function because it affects all other management functions. Infact
it can be described to be the life source of all other management functions.

Coping with uncertainties

From the first definition on planning above, it can be deduced that they are uncertainties businesses are likely to face in the process of planning. The environment of a business is a major source of uncertainty for that business. We would be analysing the three types of environmental uncertainties and organizational responses to them.


Types of Environmental Uncertainty

1.State Uncertainty
2. Effect Uncertainty
3.Response Uncertainty


State Uncertainty: It is a situation where the environment or a portion of the environment is considered unpredictable, it might be due to a state of nature that is uncontrollable by the decision maker, to make decisions in the uncertainty the decision maker has to draft a pay off table and use decision rule criterias such as the maximin, maximax, minimax regret choice and others.


Effect Uncertainty: In this situation, the manager attempts to predict the effects of specific environmental change or event on the performance of his organization.


Response uncertainty: In response uncertainty, consequences of decisions are unpredictable, it is the inability to predict the consequences of a particular decision or organizational response.

Organizational Responses to Uncertainty

Having discussed the types of environmental uncertainty, lets discuss how organizations react the these uncertainties. Some orgaizations do a better job than others in managing uncertainties, they have contigency plans and carefully thought out strategies that would place them ontop no matter the uncertainty that comes knocking.

Organizations cope with uncertainty by adopting one of four positions in the environment they operate in. These are:

1. DEFENDERS : Defenders rely on their primary technology and primary product line remainign competitive.

CHARACTERISTICS OF RESPONSE OF DEFENDERS:
Highly expert at producing and marketing a few products in a narrowly defined market

Opportunities beyond present market not sought

Primary attention devoted to efficiency of current operations

Defenders Few adjustments in technology, organization structure, and methods of operation
because of narrow focus



2. PROSPECTORS: Prospectors do not rest on their laurels, they aggressively seek new innovations and make things happen. They ae the ''movers'' and the ''shakers'. They make things happen.

CHARACTERISTICS OF RESPONSE OF PROSPECTORS:
Primary attention devoted to searching for new market opportunities

Frequent development and testing of new products and services

Source of change and uncertainty for competitors

Loss of efficiency because of continual product and market innovation

3. ANALYZERS: Analysers follow. They watch the leaders and they typically just follow.Analyzers let market leaders take expensive Research & Development  risks and then imitate or build upon what works.

CHARACTERISTICS OF RESPONSE OF PROSPECTORS:
Simultaneous operations in stable and changing product/market domains

In relatively stable product/market domain, emphasis on formalized structures and
processes to achieve routine and efficient operation

In changing product/market domain, emphasis on detecting and copying competitors’
most promising ideas




4. REACTORS:The reactor is the exact opposite of the prospector. Reactors wait for adversity,before taking corrective steps. They are slow to develop new products to supplement their triedand-true ones.

CHARACTERISTICS OF RESPONSE OF PROSPECTORS:
Frequently unable to respond quickly to perceived changes in environment

Make adjustments only when finally forced to do so by environmental pressures