The formulators of plans usually are grouped together and consider themselves as the planners, since it is they who translate or convert the opportunities discovered through search into strategies and policies which are directed toward the primary and intermediate goals. Formulators in a firm are generally called planners, program developers or assistants to the line manger.
In the implementation of plans there is the indispensable group of people who influence the carrying out of the plans and thus are in a position subtly to change elements of the plan or to ignore certain parts. The target setters are usually the line or operational managers who translate the broader plans into specific and detailed quantities and times for the many decision makers and workers. This stage of planning involves all levels of management and ultimately has an impact on the workers in planning their own activities.
Unless there is a mechanism in a planning model to check whether the actual performance is related to the estimated activities, planning can result in considerable thought without any direct results. Operating the plan involves continual checks to determine whether the plan actually results in performance consistent with the original previous thinking.
The element of time must be considered in planning. First, it takes time to prepare plans. The complexity of the subject planned and the techniques used affect this time. Broad plans, involving a number of specialists and departments, need extra time for coordination. Second, the length of time between the preparation of plans and the beginning of implementation, often called lead time, may be significant. For example, in the automobile industry, the lead time for designing a new model is determined by other departmentsâ€™ need for completed designs before starting to plan for the raw material supply, purchase of new tools, and so on. Third, the time needed to place the plan into full is important, because the speed of implementation may affect the degree of details covered in the original preparation. Fourth, the length of the time period a manager attempts to plan for is a big question. Long range plans may cover ten to twenty years; short range plans may be for the next month or year.
The cost of planning necessarily affects the degree of specific details to be covered, the completeness of factors of factors to be considered, the formality of necessary approval, and the amount of data to be studied. If there is little information available upon to base plans, it may be economical to postpone planning until immediately before action is necessary. In other words, a master plan sets a pattern by which other plans can be developed quickly at a later date.
Planning is a prerequisite to other functions of management. The concept of control is meaningless without planning. Moreover, each of the other functions depends upon thinking in advance of execution. Adaptation of plans to current actions demands continual re drafting of plans. If a firm makes a long range plan covering ten years in the future, it should reconsider periodically making changes warranted by new developments and extending the plan to cover a new ten year period. This has been called the principle of navigation in which the analogy of tacking a sailing vessel is used. The firm continually â€œtacksâ€ (shifts back and forth) to take advantage of immediate opportunities, yet gradually gets closer to its ultimate destination.
Planning pervades the hierarchy of an organization. Planning at lower tends to be detailed and for short periods in the future; planning at higher levels to be general and for long periods of time.
A manager should relate the degree of commitment of his resources to the need for definite plans. If a firm plans to construct a new building, which will tie up funds for an extended period of time, it should make its plans in some detail and for the time period in which the funds will be tied up. The â€œfirmnessâ€ of a contract might indicate the degree of commitment. Options in a contract, short term leasing and buying rather than making oneâ€™s products are some of the techniques that may be used to decrease to decrease the degree of commitment of resources and thus to decrease the need for detailed plans.
Plans should retain flexibility. Planning tends to preset a rigid course of action unless change is incorporated in plans. Alternative courses of action will help provide flexibility, though often only at extra cost. Because planning is assumed to be a rational process of human beings, it is important to be aware of some of the psychological hazards that might be encountered.