CHAPTER 7
Principles of Planning

CHAPTER SUMMARY

Planning is the process of determining how the organization can get where it wants to go. The fundamental purpose of planning is to help the organization reach its objectives. Advantages of planning include: (1) an emphasis on the future, (2) coordination of decisions, and (3) a clear focus on the objectives. If done incorrectly or excessively, planning can be disadvantageous, but its benefits outweigh its disadvantages. The six steps of the planning process are: (1) stating objectives, (2) listing alternatives, (3) developing premises, (4) choosing alternatives,
(5) developing plans to pursue the chosen objective, and (6) putting the plan into action.

Implementation of the planning process is the key to success. One way of approaching this implementation is to view planning activities as organizational subsystems. Chief executives have the final responsibility for organizational planning. Many chief executives, especially of larger firms, seek planning assistance from organizational planners. These planners should be able to: (1) use their organizational experience, (2) see the organization as a whole, (3) detect and react to trends, and (4) get along with others. Organizational planners have three general duties to perform. These are: (1) overseeing the planning process, (2) evaluating developed plans, and
(3) solving planning problems. The evaluation of planners would be based on both objective and subjective appraisals of their performances. Success in implementing a planning subsystem is not easily attainable. Several safeguards can be employed to ensure the success of the planning process. These include: (1) top management support, (2) an effective and efficient planning organization, (3) an implementation focused planning orientation, and (4) inclusion of the right people.