CAT T5-Business Planning and Control

As you know business planning is essential in a business,what is the purpose of business planning?Business planning is used to assist individuals and groups within organisations to be effective in working towards the achievement of the organisation's activities.Planning allows managers to identify the objectives for which they are responsible and how far they are being successful in achieving those objectives.It is an activity which must take place against background of the organisation's environment and which must take account of the organisation's internal strengths and weaknesses.Planning involves decisions about what to do in the future;how to do it;when to do it; and who should do it.These activities are relevant at all levels of organisation activity.Basically we have 3 levels of planning:Strategic,tactical and operational.

At a strategic level this is about deciding what business the organisation should be in and what its overall objectives should be.Strategic planning represents a systematic attempt to influence the medium and long-term future of the business or enterprise by defining the overall company objectives and appraising the major factors within the company and the environment which might affect the achievement of objectives.The overall objective of planning at this level is to point the direction in which an organisation is to move over a fairly lengthy period.Strategic plans should be sufficiently clear to be evaluated in terms of whether they have been achieved or not,but they are not specific that they tie the organisation down to achieving objectives and meeting what could be impossible long-term targets in condition of uncertainty.It is also important in the public sectors areas such as education.It is practiced widely informally and formally.Strategic planning and decision processes should end with objectives and a roundmap of ways to achieve them.

At tactical level this is about deciding how it should go about achieving its overall objectives:what products or services it should offer and how they will be marketed,how it will organise work and so on.This is a lower level of planning and is often termed intermediate range planning.The overall objective of tactical planning is to ensure that resources are obtained and used efficiently and effectively to accomplish the organisation's objectives.It includes decisions around organisation structure,financial budgets,staff requirements and product sales mix.Decisions are usually based on financial analysis and performance reports and summaries of different operations.

The detailed control over each individual operation is exercised at operational level.At operational level this is about deciding what needs to be done from day to day and task to task.This represents the lowest level of planning and involves line managers and first line supervisors in the setting of specific tasks.Operational planning takes place within the context of broader management plans.The focus of operational plan is upon individual activities and tasks,for example scheduling individual orders through a production planning process.

Okay you all must also understand that business planning should take into account the availability of resources.Resource planning would include estimates of requirements with regard to human resource(HR),equipment or machinery,finance,materials and components.But the main concern in CAT T5 is the HR planning as this was one of the most important resources to any business as well.

HR planning can be defined as a strategy for acquisition,utilisation,improvement and retention of an organisation's human resources.The human resource plan is prepared on the basis of the analysis of labour requirement and the implications for productivity and costs.A key goal of HR planning is to get the right number of people with the right skills,experience and competences in the right jobs at the right time at the right cost.

The four main stage of HR planning are auditing,forecasting,planning and controlling,each will be explained below:
Auditing stage involves the analysis of the strategic environment(trends in population growth,education,pensions and employment rights) in the light of the organisation's strategic objectives.The strategy chosen will have implications on the number of employees and the mix of skills required.
Forecasting stage analyses the demand for,and supply of,labour in terms of number,type and quality of people the organisation should employ to meet planned requirements and cover expected turnover.
Planning stage involves policies to recruit,train and develop the labour force identified in the forecast.
Controlling stage involves measuring the effective use of the human resources and their contribution towards the achievement of the organisation's objectives in the forecast.Organisation may use performance appraisal in this stage.

Beside that,the elements of HR planning would include the following:
Recruitment,selection and promotion plan-numbers and types of people and what they are required,culminating in the recruitment programme.
Education and training plan-numbers of trainees required and/or existing staff needing training,culminating in the training programme.
Development plan-programmes for transferring and retaining employees.
Rewards and benefits plan-the system of pay and benefits used to reward employees.
Succession plan-assessing the quality and quantity of employees required at each level within the organisation and ensuring that the necessary measures are taken so that these positions are filled on continuous basis.
Retention plan-actions to reduce avoidable labour wastage.
Redundancy plan-where and when redundancies are to occur;policies for selection and declaration of redundancies;redevelopment,retraining or relocation of redundant employees,policy on redundancy payments,etc.
Productivity plan-Setting of productivity target for employees,those who achieved the targets could be given bonus.

Apart from that,planning requires coordination as well.Coordination is one of the major function of management.Departmental plans and budgets must be coordinated,so that they are all working together to achieve the business plan.At production level,coordination will ensure that department knows what and when they need to achieve,work can be flowed without holdups or clashes and without idle time or overwork for staff and machinery,the resources required for the task are available where and when required and there is no duplication of effort.

As the planning is essential in business,coordination must also be good so that all departments are able to work together to achieve a common business plan,I had provided information which T5 students are not expected to know everything,this has included information for extra reading.For those who are aiming to become an entrepreneur,these information may be important and you need to understand how to differentiate between 3 levels of planning,each has their relative importance. :)