Planning Function

1703 WordsOct 29, 20087 Pages
Management: Planning Function Planning is a major function of management. Planning may be the most important of all management functions. Planning involves a six-step process that assists an organization in setting goals and determining how to accomplish them best (Allen, 1998). “Effective planning helps an organization adapt to change by identifying opportunities and avoiding problems. It sets the direction for the other functions of management and for teamwork” (Allen, 1988, ¶ 1). In order to operate in an efficient and effective manner and to progress with focus and direction, an organization must set goals and develop plans to achieve those goals (Erven, 1999). All management levels participate in planning; the characteristics of…show more content…
Strategic planning is essentially long-range planning in which an organization develops its mission, overall goals, general strategy and allocates resources (Management, 2006). When managers begin planning, they clearly identify the purpose of the organization with a mission statement. According to Allen (1998), “The mission statement is broad, yet clear and concise, summarizing what the organization does. It directs the organization, as well as all of its major functions and operations, to its best opportunities. Then, it leads to supporting tactical and operational plans, which, in turn leads to supporting objectives” (¶ 6). During strategic planning, managers conduct a situational analysis. The situational analysis is comprised of an internal assessment of the organization and an external assessment of the environment (Allen, 1998). “One method of collecting useful information on both the internal and external situation is to conduct a SWOT analysis” (Management, 2006, ¶ 6). A SWOT (strengths, weaknesses, opportunities and threats) analysis “. . . is the assumptions and facts on which a plan will be based” (Allen, 1998, ¶ 8). An internal assessment of the organization includes examining strengths and weaknesses to determine what make the organization distinctive and where vulnerabilities exist (Erven, 1999). Opportunities and threats are external to the firm;
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