por The administrative planning of a company is a comprehensive process to determine what a company should become and how it can best achieve that goal. Evaluates the full potential of the organization, directly linking its objectives with the tasks and resources necessary to achieve them.
Entrepreneurs start a business to fulfill a purpose that makes sense to them. The business becomes an instrument for the entrepreneur to do what he wants to do. Management planning describes what you want the company to do.
In addition, it offers a systematic process for asking and answering the most critical questions facing the management team, especially major decisions to commit resources.
Much of the role of planning is being able to work independently to determine which responsibilities should be assigned to which employees, set priority levels for certain tasks, and create work schedules.
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Who implements administrative planning?
Administrative planning is carried out by the manager or administrator of a company. Establishing administrative planning to achieve business objectives is one of the most important managerial functions. This means assigning resources and responsibilities to staff, as well as establishing a work schedule for completion.
Management planning requires that the progress of the work team be continually checked, in order to make small adjustments when necessary, while maintaining a clear picture of the most important objectives of the company.
Principles of management planning
Administrative planning has a series of principles:
Rationality
It is the skill of planning based on real and logical criteria, thus constituting possible action plans.
Unit
Every company has the duty that administrative planning turns out to be adequate. Therefore, each area must conduct its strategies according to the general plan.
Commitment
It refers to the acceptance of the planning that each area of the company must have. Although planning is a managerial function, it should not be performed by one person alone. Rather, planning should be made a collaborative and inclusive process.
Employees must be made to feel committed to the planning process, assuming shared responsibility for its implementation. They might even come up with innovative ideas that would otherwise get lost.
Precision
Planning must acquire a high level of precision so that each area of the organization conducts all its efforts as expected.
Communication
It is important to clearly communicate both the business plan and the desired results to employees. Open communication should be encouraged, encouraging everyone to give feedback and suggest improvements.
Flexibility
It refers to the ability to adapt to changes, which will make it possible for the company to remain over time.
Effective planning requires abandoning outdated processes, revising strategies, innovating, hiring and firing. All this means change, which is difficult to manage.
Data and not assumptions
Basing a plan on assumptions is a serious mistake that negates all the benefits of proper planning. It is important to do market research, organize focus groups, talk to your own employees and consult market experts.
growth culture
A true focus on improvement can only be sustained in a culture that values efficiency and growth. You have to work to create that culture in the company.
If employees are helped to develop their skills by appreciating and rewarding personal achievement, employees will be more willing to commit to challenging goals and plans.
types of planning
strategic
It is designed with the entire organization in mind. High-level managers will design and execute strategic plans to envision a picture of the desired future and the long-term goals of the organization.
Essentially, this planning looks to the future, where you want the company to be in three, five or ten years. It serves as a framework for lower level planning.
For example, Tomás is a high-level manager at Angelo’s pizzeria. Tom must use strategic planning to ensure that the organization’s long-term goals are achieved.
This means developing long-term strategies to achieve growth, improve productivity and profitability, drive return on investment, and improve customer service. This will be part of the desired future for the pizzeria.
Tactic
Provides support to strategic planning, converting it into concrete plans for each area of the company. These plans are based on the responsibility and functionality of each department to fulfill its part of the strategic plan.
For example, when Martha, a mid-level manager at the pizzeria, learns of Tomás’s strategic plan to increase productivity, she immediately begins to think of possible tactical plans to make sure that happens.
Your tactical planning might be to try a new pizza-making process, looking to reduce the amount of time it takes to prepare a pizza, or perhaps looking for a more powerful oven that will decrease cooking time.
Marta needs to create a set of actions that are narrower in scope than the strategic plan, but still help move the company closer to the long-term goal.
Operational
It is the planning that lower level managers do. It is focused on the specific operations and procedures that occur within the base level of the company. The usual tasks of each department must be planned with a high level of detail.
Francisco, base manager at Angelo’s pizzeria, is responsible for operational planning. His activities include things like:
Evaluate, order and store inventory.
Schedule employees weekly.
Create a monthly budget.
Elements of administrative planning
Vision and mission
The vision statement answers the question: Where are we going? On the other hand, the mission statement describes its purpose and answers the question: Why are we here?
Values
This statement answers the question: What is important to us? Thus, values are the things that you want to state constantly.
Goals
They are the specific and measurable results, within an established term. Goals typically include desired revenue and profitability.
SWOT analysis
It is useful to analyze where the company is currently, by identifying its strengths, opportunities, weaknesses and threats. It requires that you have a deep understanding of the market and also how the company positions itself within its niche by competing with existing players.
The weaknesses and strengths are the internal factors, while the threats and opportunities are the external factors, which affect the viability of the company.
Organizational structure
It is an overview of all the people involved in the company and their position in relation to each other. The experience of the existing team should be detailed, as well as any roles that have not yet been filled.
Operations
The processes and people that make the company run well are key to success. In effect, they help make better products possible, either by delivering them at a lower cost or more efficiently. This element must successfully do what was «promised» by the previous elements.
It analyzes the resources needed to achieve the objectives, also identifying the main tasks and potential obstacles. There will always be tasks that are critical to the success of the business. Finally, identifying potential obstacles helps anticipate how to adapt if circumstances change.
Financial management
It deals with the financial aspects of the business, with historical information and analysis that shows where the company is headed. Projections and also budgets of the company are included.
Profit and Loss Projection
A monthly forecast of sales, operating costs, taxes, and profits for the coming year.
capital requirements
It shows investors where their money will be spent. It must contain a summary of all the expenses of the big purchases and also the costs of operation of the day to day.
Stages of administrative planning
have conscience
Awareness allows you to identify available and future opportunities. It also involves understanding the objectives of the organization, examining each objective in detail and analyzing the expected results.
Gather information
You must have all the relevant information regarding the commercial operation. You must detail all the facts and figures, identify the target customers, in addition to noting their tastes and preferences.
The guidelines under which the goods and services are supplied, the current market value of the products, in addition to the projected costs and expenses, with the expected returns must also be established.
The tasks must be well known in order to align them with the objectives and with the necessary resources, in terms of personnel and financing.
To establish objectives
It is about establishing the goals that the company should strive to achieve using its available resources. Understanding the objectives allows each employee to know his role in achieving them. Therefore, they must be properly formulated and well communicated to all employees.
They must be established in their order of importance. The most important ones should take priority and be completed first.
Determine course of action
A good manager must analyze all available options and make a final selection that is appropriate in terms of convenience and resource utilization. All the positive and negative aspects of each particular course of action must be analyzed and weighed before making the final selection decision.
Assess the course of action
It involves analyzing the performance of different tasks. Different factors are measured against each other, thus preferring the most convenient course of action in terms of resources and schedule.
For example, one course of action may require large investments and be profitable in the long run, while another may require very few resources but low profit margins in the long run.
Implementation of the plan
For a successful implementation, policies and procedures must be established, as well as execution plans for all operational personnel, managers and other collaborators.
Monitoring and evaluation
The effectiveness and execution of the planning should be periodically evaluated. Depending on the results, management guidelines may need adjustment.
References
American Intercontinental University (2020). The Four Functions of Management: What Managers Need to Know. Taken from: aiuniv.edu.
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