Strategic Management: Formulation and Implementation

The Elements Of Planning

The planning function requires to make decisions about four fundamental elements of plans:

* Objectives. Objectives are statements of future conditions, that a manager hopes to achieve. All sets of objectives have three characteristics: priority, timing, and measurement. The prase priority of objectives implies that at a given time, accomplishing one objective is more important than accomplishing others. Time dimensions imply that an organization's activities are guide by different objectives, depending on the duration of the action being planned.

Effective planning requires measurement of objectives. A variety of measurements exists to quantify objectives in the eight areas that management expert Peter Drucker suggests: market standing, innovations, productivity, physical and financial resources, profitability, manager performance and responsibility, worker performance and attitude, social responsibility.

* Actions. Actions are the means, or specific activities, planned to achieve the objectives. The terms strategies and tactics refer to planned courses of action.

* Resources. Resources are constraints on the course of action. It also involves budgeting - identifying the sources and levels of resources that can be committed to the courses of action. Management can select the type of budget that best suits the planning needs of the organization.

* Implementation. Implementation involves the assignment and direction of personnel to carry out the plan. The three approaches to implementation are authority, persuasion, and policy.

Much of this task consists of asking the appropriate questions. Table 3-1 suggests the fundamental questions that are appropriate regardless of the type and size of the organization.