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The Planning Function of Management

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Most companies have a vision, mission statement, and a set of core values. These three things are normally made up by a group of senior managers or a leadership team. Once these three things are decided upon, the upper management or leadership team should deliver the information to the management below them, so the important information is delivered to all levels of employees within the company. After the these three things have been set, most companies will post their vision, mission statement and core values somewhere for all employees to see. Often time’s new employees are given copies of these three things in orientation or on their first day of work. Coming up with the vision, mission statement and core values are just one way that managers get together to plan and set goals. All functions of planning must be used by managers in order for the company to succeed; planning helps the company to reach the set goals. All levels of management should use strategic, tactical, operational, and contingency planning. Each level of management tends to plan differently, but at the end of the day, all managers should consult with each other when it comes to setting goals to successfully acting out each plan. “Managers at all level--top, middle, and lower—require each of the three planning types discussed. Traditionally strategic planning has been associated with top-level managers, operational planning has been associated with middle-level managers and “to-do-list” planning has been associated with lower-level managers or supervisors” (Carroll, 1993, para. 16).

Bateman and Snell (2007) stated, “Strategic planning involves making decisions about the organization’s long-term goals and strategies” (Chap. 4, p. 122). The strategic goals are usually set by high level managers because of the complexity of the goals. Strategic goals tend to deal with the measure of growth of the company, market share and value, profitability, return on investment (ROI), quantity and quality of outputs, productivity, customer service, and contribution to society. A senior manager at a bank might use strategic planning to track productivity for each branch manager. After the plan has been implemented, that manager must target goals for that branch manager so he or she can build on his or her strengths needed to reach the goals of the plan. Since strategic plans are long term, the plan for the branch manager’s productivity might be to cross-sell 200 loans with a brand new account in four years. This is a long term goal that will have some smaller short term goals broken up within the long term goal. That branch manager can then take some of the goals lined out for them and pass them down to their staff. All different levels of management should be included in the planning of the strategic goals. “Goal management functions enable organizations to link individual goals to strategic corporate goals, meaning executives have insight into the progress being made on corporate objectives” (Loucks, 2007, para. 4).

Tactical planning is more of a broad area of planning. A project team upgrading current software that a company uses would use the tactical planning function. There are already strategic goals and plans in effect with the company and that is a basis that the middle and front line managers will use in their planning. Tactical planning usually spans over one or two years, not such a long term planning like the strategic plan. “Tactical plans focus on the major actions a unit must take to fulfill its part of the strategic plan” (Bateman and Snell, 2007, Chap.4, p.123). Take the project team for example; they have 14 months to successfully upgrade the company’s software from its current version to a new version. The team will set tactical goals in their plan such as completion dates for their designs, testing the product, installing the product and testing the product one final time. The responsibility lies on the mid-level and front line managers to ensure these goals are met. At the end of the project, those manages will report up to the upper level managers or the leadership team on the result of the project. Again, this is a way of planning that requires the participation of all levels of management.

Operational planning is used mostly by lower level or front line managers. These are the routine tasks of scheduling, human resource tasks, and daily statistics which are looked at when planning for future staffing and projects. Although these tasks are carried out by lower level management or supervisors, they upper

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