1.0 INTRODUCTION
We have been discussing the very basic aspects concerning management.
We have looked into the definitions of management including their analyses.
This activity enabled us to know the meaning,
nature and purpose of management.
We then examined the core values of management, the relationship between
management and Administration as well as whether management is an art or
science.
We further progressed in this introductory course by looking at
the basic objectives of management and the skills necessary to attain organizational
objectives. These topics and the sub-topics related to them are necessary to
proper understanding of management. They give us the essence or the spirit
behind management; and it is well we come back to them in future as we continue
to make progress.
Starting from this note, we are going to start discussing the
management functions and we are going to start with forecasting and planning.
You must understand that even though we are separating forecasting and planning
in our discussions, in practice, it is always difficult to draw the distinction
between forecasting and planning.
That is to say that forecasting and planning go hand in hand in
the process of carrying out management functions. In classifying management
functions, it is important we separate clearly those operations of an
organization which are peculiar to that organization, such as sales, marketing,
accounting, maintenance, quality among
others from the functions of management. T
he enterprise functions or an organization's activities vary from
one organization to another while management functions are applicable to every organization.
Also, while we are classifying these functions of management, it should not be
done as if it is air-tight. "They relate to one another and they operate
as a system.
2.0 OBJECTIVES
By the end of this note, you should be able to:
· Define forecasting and planning
· Describe the steps in planning
· List the advantages and limitations of planning
3.0 MAIN CONTENT
3.1 Forecasting
This is a management function that reduces areas of uncertainty
that surround management decision. Such decisions can be on sales, costing, profit,
manpower among others.
Forecasting is aimed at
calculating or predicting what is likely going to happen in the future. That
is, the events or conditions are predicted in advance. By so doing, forecasting
gives management the basis for expecting the desired outcome arising from
management decisions.
It also gives the manager an understanding of alternative courses
of action. This means that a manager does not rely on a course of action; if the
action fails, the manager is helpless. Through forecasting a manager has
alternatives. Out of the alternatives he selects the one that can maximize his
objective(s).
As a result, management has explicit method of taking decision
based on rational assumptions and calculations. You will learn the techniques
of forecasting in statistics and quantitative techniques which are some of the
technical courses you have to offer.
3.2 Planning
This is another management function which is futuristic. It goes
together with another management function of forecasting. It involves deciding in
advance what to do, how to do it, when to do it and who is to do it. Consequently,
planning has to do with the conscious choice of patterns 140 of influence on the manager in his
attempt to make decisions. For planning to be effective there must be the
establishment of objective.
3.2.1 Definition of
Planning
Planning is defined as the design of a desired future and of
effective and efficient way of bringing it about. We can also look at planning
as examining the future and drawing up a plan of action. From the above two
definitions of planning, we can identify some features of planning.
3.2.2 Features of Planning
(a) Planning involves design. Remember to design is to create
which is one of the skills of management. This means that before any other
management function can take place, there must be first of all planning.
Consequently, planning precedes action in respect of other management
functions.
(b) Planning attempts to bring necessary actions and fit them
together to something we want to make sense of before it happens. This means
that before we realize an objective, there must be series of actions which must
be well fitted together in a logical sequence.
(c) Arising from (b) above, planning is focused on the need to achieve
stated and well defined objectives. This means that the end-product of planning
is the realization of organizational objectives.
(d) Planning is also a conscious deliberate response to the
negative belief that unless something is done a desired future state will not occur,
and to the optimistic belief that we can do things to improve our chances of
achieving the desired state.
3.2.3 Planning and Decision making
We have seen what planning is through two definitions on planning.
Arising from the definitions we have selected some features of planning. We are
going further to see the relationship between planning and decision making.
Decision Making In the process of planning in an organization decision is being
made. This is because decision making is that activity that which makes the choice
of which activity is to be carried from different activities. What 141 this means is that before a decision can
be made, there must be alternative or different ways to do something. Out of
these ways, there must be an action to pick one alternative out of the several
alternatives. A decision is therefore regarded as commitment to action. This is
why a plan is useless unless it is committed into concrete action. A complete activity
of planning/decision making process is shown below. 
Figure 5.1: Planning/Decision making cycle
3.2.4 Steps in Planning/Decision Making
We have just seen that decision making is the heart of planning.
Without taking decision and committing planning to action, the plan is useless and
is of no value. It soon collapses because there is nothing to pump blood in it.
Figure 5.1 shows the relevant steps in planning. These steps are also the steps
in decision making and we are going to consider them, though briefly, one after
the other.
(a) Define problem/issue This is the first step in planning/decision making. The objective
has been set, and there is an obstacle toward the realization of the objective.
As a result, before a problem does exist and becomes an issue there must be an
objective which the problem is threatening. That problem must be identified and
isolated. Care must be taken here so as not to confuse symptom of a problem to
the problem at stake.
For example, there can be smoke in the factory but what is causing
the smoke is the fire. Attacking the smoke is a sheer waste of time because the
fire will continue to produce fresh smoke. The only way to put an end to the smoke
is to quench the fire by a relevant means or a combination of Define
problem/issue Measure result Collect relevant Data Develop alternative
solutions Implement Action Assess the consequences Select maximum solution means.
The same situation goes to management function of planning/decision.
The exact problem has to be identified. The manager must therefore be diligent
and painstaking.
(b) Collect relevant date Planning and decision making cannot take
place unless there is data. But the data should be meaningful to the problem
already identified. This is where the information gathered in the management
function of forecasting will be useful. The assumptions made will be further subjected
to analysis so as to determine the relevance to the problem at stake. Company
records are also part of the data which have to be processed. Outcome of
researches can also be part of the data if such outcome is relevant to the
issue.
(c) Develop alternative solutions The data having been
assembled, the next stage is for management to work out possible solutions. The
solution can never be one because if it is so then there can be no choice. The
idea of choice suggests that at least there must be two solutions to the existing
problem. Out of these solutions, there can be a choice.
(d) Assess the
consequences But before there can be a choice, there should be consequences
which must be carefully considered in the light of the problem threatening the objective.
The manager should determine the required resources needed in selecting an
option. He should find out if such resources do exist and if they can be put to
alternative use that can bring better benefits. He must be sure too that the
organization can handle the option that is eventually and the option is capable
of tackling the problem effectively.
(e) Select the Optimum Solution The solutions having been worked out and
ranked in order of preference, the next stage is to choose. And the choice
should be the most feasible one after taking several factors into consideration
vis-à-vis the objective and the problem at stake.
(f) Implement Solution Once the choice has been, management should go ahead to implement.
While implementing, there should be built-in motivational system that will
enable problem to be tackled satisfactorily. Job plan should be 143 developed spelling out the necessary
activities to be done, who is to do them, how they are going to be done and at
what time.
(g) Measure result While implementing, there must be control and feedback. To achieve
this, there should be regular reports on performance. The reports should then
be compared with the objective. If there is a deviation, this means that there
is no effective solution yet to the problem. Such deviation should be quickly
corrected.
3.2.5 Advantages of Planning
Planning has the following advantages:
(a) Planning focuses on objectives. This is important so as not to
commit the limited resources of the organization into unprofitable actions.
(b) It off sets uncertainties by making the manager to develop
some confidence which will enable him to take decisions with some degree of
certainty.
(c) It minimizes waste before careful analysis would have been
made with respect to the critical activities that need to be performed in other
to realize the objective or give solution to the problem. All unwanted
activities are isolated and thrown away.
(d) Planning also ensures control through measurement and feedback.
This is important so as to avoid unnecessary expenditure of resources.
3.2.6 Disadvantages of Planning
(a) The effectiveness of planning depends on the quality of data gathered
and the assumptions made from them. If the quality is poor and assumptions not
correct. They can adversely affect future of the results.
(b) Planning is expensive as it involves considerable amount of
time and money
(c) Planning delays action because it is only when the plan is completed
that the desired action can take place.
4.0 CONCLUSION
We have seen what forecasting is and the usefulness of forecasting
in the management process. Also, that in practice, both forecasting and planning
goes hand in hand together. We examined the features of planning as well as the
relevant steps that the manager needs to follow in other to draw an effective
plan.
These steps involve defining the problem, collecting relevant
data, analyzing the data to separate the grains from the chaff and then
building viable solutions. Other steps are selecting the most feasible solution
from the alternatives, implementation and then controlling through measurement
and feedback. Planning also has its own advantages and limitations and we considered
all these.
5.0 SUMMARY
We have treated two management functions - forecasting and
planning, though in practice the two become one since they cannot be separated.
We saw the steps in planning as well as the advantages and some setbacks of
planning. We drew an important conclusion, namely, that the steps in planning
are also the relevant steps in decision making. This means that the planning
process is also the decision making process.
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