Planning Functions In Business Management

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The definition of a business plan is a decision-making process that will be fundamental and a guide to the action to be performed in the future. 

The business plan is a written document that mentions the fundamental ideas that become the foundation and consideration to start and develop a business from scratch. 

The Business Plan includes details about the strategies, concepts, plans, objectives, objectives, and targets that will be achieved in the future.

The future of a business or venture is not fully predictable, but with this Business Plan, most of the needs and obstacles that may be faced in the future can be anticipated and well prepared. The main purpose of the Business Plan is to expand the success of planned business activities. 

The Business Plan includes the following matters:

• Recognizing the fundamental nature and context of an opportunity to strive or business.
• A cutting-edge approach to business perfection exploitation.
• Recognizing the factors that affect the success of a business.
• Provision of tools for businesses or businesses.

If we talking about Planning Functions In Business Management, of course, this is an important thing to learn for. Now, to increase your knowledge let's read the below article till the end, so you will be more understanding about this matter.

Planning Function

The function of planning in management is how the company's directors set the objectives to be achieved and strategize to achieve that goal. Simply, the planning function is what you want to accomplish and how to do it.

The planning function is one of four management functions in addition to organizing, actuating and controlling functions. Planning is the earliest step in running the company and it can even be a total impact for the company in the future.

Other management functions will follow the results of the planning. Other management functions cannot go well without careful planning management.

Planning Objectives

Each company usually has a different goal between one with the other but in general, the planning objectives of the company are:

• Planning is a way of anticipating and recording changes
• Planning is the direction to be a guide for all employees of the company
• Planning can avoid or at least minimize the waste and overlap of the implementation of activities.
• Planning sets the standards to be used to facilitate supervision.

Benefits Of Planning Functions

Planning function has several benefits such as:

• Planning results to be basic guidelines and references in conducting activities
• Planning can facilitate the supervision of the activities undertaken, whether it is in accordance with the planned or not
• Planning can minimize any mistakes that may be happening
• Activities of each management unit more organized
• Implementation of the task becomes more precise, effective and efficient
• Potentially emerging deviations can be anticipated as early as possible
• Threats and possible obstacles can be predicted and resolved as early as possible
• The participation of a change in the internal condition of external and can affect the activities of the company.
• As a coordination tool between the field and between divisions in the company
• Facilitate surveillance

What Are The Activities Of Planning Management Functions?

The main activities of the planning functions are:

• Determining the direction of the company goals and business targets
• Strategize to achieve the desired goal
• Determine what resources are needed to run the strategy
• Set a standard or benchmark to determine the effort to achieve that goal

Factors Considered In Planning

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Planning basically decides what it wants and what it will do. If you want more details, planning should be able to answer a few more familiar questions abbreviated as 5W + 1H. Let's find out more details about 5H + 1H  as below:

1. WHAT

• What do companies want to get? Good planning should be able to explain the objectives that the company wants to achieve.
• What do you want to get in the short term?
• What would you like to get in the medium term?
• What kind of goals would you like to produce in the long run?

The answer to this question will be based on the future planning of the company.

2.WHY

• Why is an advanced and explanation of the "what " objectives that the company wants to achieve?
• Why does the company decide the goal? Why isn't it another purpose?
• What are the accompanying reasons as well as their analysis?

Is the purpose of planning already realistic? Is planning profitable and sensible to work on?

3. WHERE

Where it relates to where a project in carrying out a goal will be undertaken. It should be explained why the program to achieve that goal must be in a certain place and not elsewhere.

4. WHEN

When will the specified destination be executed or performed? Determining the execution time of the job you want to run cannot be haphazard. There must be an analysis.

5. WHO

• Who is related to personnel who will run all the things that have been compiled above?
• Who will undergo the task, why is he and not someone else?
• Who is the market share to go to? And why not the other?

6. HOW

• How is that purpose sought? How will the activity be executed?
• Are there alternative alternatives that can be done and why choose this?

All these questions should be answered in planning.

How About a Good Plan?

The company's plan should be prepared with good systematics so that the planning can be executed easily and minimize any errors that can occur.

There are a few things that need to be considered to make good planning, including:

1. Flexible

The planned plan should be able to adapt to any possibilities that could happen in the actual state. Sometimes situations and conditions are thought to be missed from reality, the plan should be able to adapt to the changes that occur.

Not necessarily changing the basic plan or changing all the plans that have been compiled, only an adjustment action is required in the face of the changes that occur.

The plan should not be stiff. Precisely with the rigor plan, execution of the technical implementation of the plan could harm the company itself.

For example, the company has a plan to expand market share, one way is to reduce the selling price of products.

But when the plan is executed, there is a significant increase in the price of product raw materials so as to make production costs swell.

In the midst of this situation, when the product selling price is still "Insistent" want to be lowered according to the plan, not unlikely the company will have difficulties.

2. Stability Plan

A plan that is structured shouldn't have to undergo too much change at all times. Stable planning will make the company more focused on what is done.

For example, the company has plans to expand the company's market share. In the middle of the journey, when the target plan is still not reached, arrived the company planned a new factory construction.

Of course, this can make the company focus will split, prioritizing the construction of new factories or expanding the previously planned market share.

Because the company's resources are limited, then the plans that have been compiled can not be reached all.

Indeed, planning should be flexible, but flexible here does not mean having to change the main "parent " Plan of the company.

Flexible is the way. How the company runs the planned plan. The main plan or purpose may not change as much. Unless there is a thing that forces the company should change its objectives.

If the company has a plan to expand the market share and change conditions. Then the change is "How to " Expand the market. Not a market plan. If you previously used Away A, then it can be replaced with plan B. The important point is planning to have a clear goal and focus.

3. Integrates Well

The plan should be communicated well and easily understood by all parties who will implement the plan. This avoids the interpretation of different plans between the parties involved. Communication mistakes can make a plan not to work properly.

For example, what the production management does should be in accordance with the plans compiled by sales management and financial management. Should have the same results.

Similarly, another management division. Don't walk alone and even contradict each other. A good plan also has a balanced responsibility for each part of the organization.

4. Detail

Good plans should be detailed and include everything needed in the plan. Especially about 5W + 1H above.

Detail of the plan, what to do, who will do, when to do and even the target to be accomplished should be planned up to the most comprehensive management layer.

5. Considering Resources

As great as the plan should carefully take into account the resources that the company has.

Whether the plan is realistic and can be achieved with the resources it has or turns out too "High Fantasized" is difficult to achieve.

All available resources can be used effectively and with maximum power. Plans can be ambitious when the resources they have can support them.

6. Simple And Applicative

A good plan is a simple plan and it's not hard to run. This does not mean a plan that is difficult to run into an ungood plan. If there is an easier way then it is better. Minimum Effort with maximum results.

The Planning is certainly taking into account all possible possibilities. The most easily executed possibilities are prioritized options.

Plan Making Process

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1. Assigning tasks and Objectives

• The first step in drafting planning is assigning tasks and objectives.
• The task is about what the parties will do "who " the designated.
• The goal is what will be gained. The value you want to get.
• The task being executed is to achieve the desired goal. The task is definitely aligned with the objectives.

A plan cannot be compiled without a clear purpose.

2. Observation and analysis

The next step is to observe the things that are related to the effort to achieve the specified objectives. Some data is collected and analyzed to determine how that will be used to run the plan.

3. Setting Up Multiple Possibilities

After some data is analyzed, the next step is to set up some alternatives or options in planning. Each plan should at least prepare some possibilities in achieving the goal.

Alternative alternatives can be prepared in the planning. There is a possibility that a plan can not run optimally. An alternative plan that can be used should be prepared.

For example, the length of the task finishing misses, cost efficiency is less than the planned target and so forth.

4. Creating A Syntax

Syntax is combining various possibilities that exist as an alternative to choose from. Each possibility has its own weaknesses, combining some possibilities could make for a much better alternative plan.

Who Is The Plan Maker?

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a. Planning Committee

The planning committee consists of various elements representing several parties derived from the organizational structure of the company. Each representative carries his own plan, hopes, and mission.

All ideas that come from representatives of this group will be merged and discussed to the details to be used as a company plan.

There is a difference in the planning of each representative according to their division and level. In general, planning based on management levels is divided into:

b. Top Management

Planning at this level of management is:

• Strategic
• Formulating long-term goals
• Decision

Planning  is made to be a guideline by the lower level management

c. Intermediate Level Management

This (middle) level management plan tends to be administrative and prepares various alternatives for how to be forwarded to lower-level management.

d. Lower Level Management

Planning on lower level management is more focused on field technical planning. The management planning of the lower level is even more detailed to execute the planning that has been compiled by intermediate-level management.

e. Planning Section

There are several companies that have special units just to do the planning. Its task is to devise a plan and no element is representative of a part of the company's organization.

f. Staff Personnel

Functionally, in a company there are generally two groups, namely:

• Executive, A group that chores the work directly
• Staff, It can be said as thinkers who indirectly produce the company's products. The main task is to analyze the data that exists and then plan something based on the results of the analysis of the data.

Shape Planning Form

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1. Global Plan

The global plan can be said as a corporate vision, the direction of the company. Will be taken where the company is later.

There are several things that are considered in drafting the company's global plan which is commonly known by the name of SWOT analysis. (Streng, Weakness, Opportunity, Treat)

a. Strenght

Strenght is all things that are the main strengths of the company.

For example, PT Semen Gresik or now PT Semen Indonesia is the main force of land bank and the permit to explore the mountains of cement abundant. Competitor companies of similar difficulties in this regard.

The other strength is "brand " and the market share is already spreading almost complete area in Indonesia. Competitors are still not reaching this stage.

b. Weakness 

Weakness is the other side of the street owned by the company. For example, PT Semen Indonesia, one of their weakness is the status of its BUMN (Government owner). State-owned enterprises can be very close to the government and PT Semen Indonesia potentially has a political agenda or such.

Another drawback is the existence of resistance of the community when we want to expand the business by conducting new land exploration.

Environmental issues always complicate PT Semen Indonesia in building a new plant whose raw materials will mine the "mountains".

c. Opportunity 

Opportunity is an open opportunity to get the maximum results owned by the company.

Based on the example of PT Semen Indonesia, the business opportunity still wide open with the status of Indonesia as a developing country. Developing countries with thousands of physical projects, the infrastructure that requires cement. Not to mention the market share of households.

Domestic cement needs still cannot be fully fulfilled. This is a very big opportunity with the number of competitors that can still be counted with the fingers.

d. Threat

The threat is the pressure and barriers inherent to the company. Pressure or obstacles can come from internal or external companies that can even be attached at any time with the field of industry that the company has to care for.

For example still about PT Semen Indonesia, there is a new technology in the establishment of a building that does not require cement can be a threat of pressure for cement companies.

Maybe later will be encountered new technology that can reduce the use of cement. The only example is the use of light brick that the installation does not require too much cement.

In addition, State enterprises can be unstable if the political conditions are volatile. Change of BUMN Minister for example then could be the direction of the policy of the new minister is different from before.

Such a SWOT analysis should be considered in corporate planning management. The results of this analysis will be a guideline for more detailed and specific advanced planning.

2. Strategic Plan

Strategic plans are part of a global but more detailed and detailed plan. The strategic plan devises the draft to be executed in achieving the global plan.

Usually, the strategic plan is the long-term plan of the company and uses a priority system where the priority plan will be executed first.

There are several reasons why a strategic plan is structured:

• As a guideline for other planning to be conducted
• Facilitate other planning understanding
• The starting point in the assessment of all activities undertaken by management and other parties.

3. Operational Plan

Operational planning is a plan for operational activities that will be done in the short term. There are two types of operational planning, i.e. disposable planning and fixed planning.

a. Disposable Plan

A single-use plan is planning that will not be reused after the goal is achieved. For example the machine purchase plan.

Once the machine is successfully purchased, there is no plan to buy the machine back at least in the next few years.

b. Fixed Plan

The fixed plan is operational planning that remains to be reused even though the goal has been achieved.

Usually, planning is done based on the standard approach and the condition handling that can already be estimated before.

For example, the purchase of raw materials, inventory purchases, equipment purchases and more. The activity will be repeated every time.

That is an article about Planning Functions In Business Management. Hpefully, this article will be useful to you.

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