Overview of Planning Concepts

1. Overview of Planning Concepts Andreea Serban, Ph.D. Solano Community College July 19, 2006

2. Overview of Planning • Definition of planning • Types of plans • Planning processes and steps • Evaluation • Accreditation expectations 2

3. What is planning? • Should we open a satellite campus in the town 30 miles from the main campus to respond to the educational needs of that town? • Should we offer a new program in Marine Diving Technology? • Will our enrollments drop if we start charging a technology fee? 3

4. Planning • “Planning is the process by which managers set objectives, assess the future, and develop courses of action designed to accomplish these objectives. Planning includes determining appropriate objectives and the optimum timetable for achieving them” (Boone & Kurtz, 1992) • "Planning is a formalized procedure to produce an articulated result, in the form of an integrated system of decisions." Thinking about and attempting to control the future are important components of planning (Mintzberg, 1994). "Planning is required when the future state we desire involves a set of interdependent decisions; that is a system of decisions" (Ackoff, 1970 in Mintzberg, 1994). 4

5. Plans • Plans are natural outgrowths of the planning process. They are detailed expressions of actions necessary to accomplish stated organizational objectives. 5

6. Importance of Planning • Affecting performance • Focusing attention on objectives • Offsetting uncertainties and anticipating problems • Action plans • Primary: based on organization’s future expectations given the current political, legal, economic, technological and societal environments • Contingency: alternate plan that will be implemented if certain events occur 6

7. Importance of Planning (continued) • Providing guidelines for decision making • Facilitating control • Controlling is the continual analysis and measurement of actual operations against the established standards developed during the planning process 7

8. Planning and Decision Making • Decision making is a process of identifying options and choosing those courses of action necessary to perform a given task. • Decisions trigger actions designed to keep plans in motion. • Not all decision making is planning. • Planning is anticipatory decision making • Planning involves a systems of decisions • Planning involves the creation of desired future states 8

9. Types of Plans –Time Short-range Covers a time period of 1 years or less Intermediate- Covers a time period of between 1 range and 5 years Long-range Covers a time period of 5 years more 9

10. Types of Plans –Use Single-use Predetermined course of action for unique, nonrecurring situations; includes programs, projects, budgets Standing Predetermined course of action for repetitive or long-term activities; includes policies, procedures, rules and regulations 10

11. Types of Plans –Scope of breadth Strategic Establish overall objectives, position the organization in terms of its environment; can be short- or long-term Tactical Implementation of activities and resource allocations; typically short-term Operational Use of quotas, standards, or schedules for implementing tactical plans 11

12. Organizing the Planning Function • The Commitment Principle: planning for a period of time in the future sufficient to fulfill the commitments resulting from current decisions • Size of the organization • Degree of decentralization • Shared governance • Use of planning groups 12

13. Forecasting Techniques – Qualitative Methods • Jury of executive opinion • Benefits: opinions come from individuals in many different departments; quick; inexpensive • Limitations: individuals may lack sufficient knowledge and experience to make meaningful predictions • Delphi forecasting • Benefits: group of experts can accurately predict long-term events such as technological breakthroughs • Limitations: time consuming, expensive, allows bias to influence decisions 13

14. Forecasting Techniques – Quantitative Methods • Time series analysis • Benefits: can detect seasonal or annual trends; quick; inexpensive • Limitations: inaccurate if changes in trends occur • Causal modeling • A) Regression analysis • Benefits: effective when demand and environmental factors are relatively stable • Limitations: does not consider environmental changes; assumes the combination of factors that produced past result will continue in the same manner in the future • B) Econometric models • Benefits: used to predict environmental conditions such as inflation rate • Limitations: time-consuming; requires considerable statistics expertise 14

15. Time Management • Process of effectively allocating time among different tasks • What has to be done? • When should it be done? • Who should do it? • How much time will require? • What priority should be assigned to its accomplishment? 15

16. Strategic Planning Process •       Develops answers to three questions: • Where are we now? – data on current operations • Where do we want to be at a specified future date? – assessment of data on current operations, forecasts, environmental scans • How will we get there? – activities necessary to achieve established goals 16

17. Strategy • Strategy = pattern of purposes, policies, programs, actions, decisions, or resource allocations that define what the organization is, what it does, and why it does it (Bryson, 1990) • Strategies outline the organization’s response to fundamental policy issues • Strategies need to be action oriented. They are specific actions designed by offices/divisions to achieve the objectives included in the Strategic Plan 17

18. Levels of Strategy • Corporate strategy: strategic plan focusing on the entire organization, specifying types of businesses in which the organization will engage, its scope and how its resources will be deployed • Business strategy: strategic plan focusing on the optimal methods of competing in a particular market as specified by the corporate strategy • Functional strategy: strategic plan linked to business and corporate strategy and developed for each functional area of the organization 18

19. Steps in Strategic Planning • 1. Defining the mission of the organization – fundamental, unique purpose that distinguishes an organization from others of its type; a general, enduring statement of organizational intent • What business are we in? • Who are our customers? • What good or service will we offer? • 2. Developing organizational goals and objectives – guideposts in defining standards of what the organization should accomplish in providing direction and motivation. • Strategic goals are the milestones the organization aims to achieve that evolve from the strategic issues. They transform strategic issues into specific performance targets that impact the entire organization. Goals are stated in terms of measurable and verifiable outcomes. • Objectives should be: specific, measurable, time specific, attainable, result oriented. 19

20. Steps in Strategic Planning (continued) • 3. Assessing Organizational Resources, Risks and Opportunities • SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis: identifies factors that may affect desired future outcomes of the organization. The SWOT model is based on identifying the organization's internal strengths and weaknesses, and threats and opportunities of the external environment, and consequentially identifying the organizations's distinctive competencies and key success factors. SWOT's objective is to recommend strategies that ensure the best alignment between the external environment and internal situation 20

21. Steps in Strategic Planning (continued) • 3. Assessing Organizational Resources, Risks and Opportunities • The Five Forces Model developed by Michael E. Porter guides the analysis of organization's environment and the attractiveness of the industry. The five forces include the risk of new competitors entering the industry, threat of potential substitutes, the bargaining power of buyers, the bargaining power of suppliers, and degree of rivalry between the existing competitors (Porter, 1985). Environmental scan identifies external opportunities and threats, evaluates industry's overall attractiveness, and identifies factors contributing to, or taking away from, the industry attractiveness (Hax & Majluf, 1996). Through organization's choice of strategy it can alter the impact of these forces to its advantage. 21

22. Steps in Strategic Planning (continued) • 4. Formulating Strategy • Miles and Snow Adaptive Strategy Typology (Miles et al., 1978) 22

23. Steps in Strategic Planning (continued) • Strategic Window: limited time period during which the “fit” between the key requirements of a market and the particular competencies of an organization is at an optimum • What general and specific external events may represent exploitable opportunities and threats to be avoided or dealt with? 23

24. Steps in Strategic Planning (continued) • Strategic Business Unit (SBU): is a unit consisting of key businesses with specific managers, objectives, resources and competitors • Stars: products or businesses that are high-growth market leaders • Cash cows: high market share but low growth potential • Dogs: low market share, poor growth potential • Question marks: low market share in a high growth market 24

25. Steps in Strategic Planning (continued) • 5. Implementing Strategy • Strategy: “Doing the right thing” • Tactics: “Doing things right” • 6. Monitoring, Evaluating and Adapting Strategic Plans 25

26. ACCJC Standards and Planning • Standard I: Institutional Mission and Effectiveness • “The institution uses analyses of quantitative and qualitative data and analysis in an ongoing and systematic cycle of evaluation, integrated planning, implementation, and re-evaluation to verify and improve the effectiveness by which the mission is accomplished.” • “The institution assesses progress toward achieving its stated goals and makes decisions regarding the improvement of institutional effectiveness in an ongoing and systematic cycle of evaluation, integrated planning, resource allocation, implementation, and re-evaluation. Evaluation is based on analyses of both quantitative and qualitative data.” 26

27. ACCJC Standards and Planning • Standard I: Institutional Mission and Effectiveness • “The institution provides evidence that the planning process is broad-based, offers opportunities for input by appropriate constituencies, allocates necessary resources, and leads to improvement of institutional effectiveness.” • “The institution assures the effectiveness of its ongoing planning and resource allocation processes by systematically reviewing and modifying, as appropriate, all parts of the cycle, including institutional and other research efforts.” 27

28. ACCJC Standards and Planning • Standard II: Student Learning Programs and Services • “The institution engages in ongoing, systematic evaluation and integrated planning to assure currency and measure achievement of its stated student learning outcomes for courses, certificates, programs including general and vocational education, and degrees. The institution systematically strives to improve those outcomes and makes the results available to appropriate constituencies.” 28

29. ACCJC Standards and Planning • Standard III: Resources • “Human resource planning is integrated with institutional planning. The institution systematically assesses the effective use of human resources and uses the results of the evaluation as the basis for improvement.” • “Long-range capital plans support institutional improvement goals and reflect projections of the total cost of ownership of new facilities and equipment.” • “Physical resource planning is integrated with institutional planning. The institution systematically assesses the effective use of physical resources and uses the results of the evaluation as the basis for improvement.” 29

30. ACCJC Standards and Planning • Standard III: Resources • “Technology resources are used to support student learning programs and services and to improve institutional effectiveness. Technology planning is integrated with institutional planning.” • “Financial resources are sufficient to support student learning programs and services and to improve institutional effectiveness. The distribution of resources supports the development, maintenance, and enhancement of programs and services. The institution plans and manages its financial affairs with integrity and in a manner that ensures financial stability. The level of financial resources provides a reasonable expectation of both short-term and long-term financial solvency. Financial resources planning is integrated with institutional planning.” 30

31. References • Boone, L. E. & Kurtz, D. L. (1992). Management. New York, NY: McGraw-Hill, Inc. • Bryson, J. M. (1990). Strategic Planning for Public and Nonprofit Organizations. San Francisco, CA: Jossey Bass. • Hax, A. C. & Majluf, N. S. (1996). The Strategy Concept and Process, A Pragmatic Approach. Upper Saddle River, NJ: Prentice Hall. • Miles, R. E., Snow, C. C., Meyer, A. D., Coleman Jr., H. L. (1978). “Organizational Strategy, Structure, and Process.” Academy of Management Review, 3:546-562. • Mintzberg, H. (1994). The Rise and Fall of Strategic Planning. New York, NY: The Free Press. • Porter, M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York, NY: The Free Press. 31

32. Planning Resources • Society for College and University Planning • www.scup.org • Planning and Decision Making Software (not an endorsement for any of these products) • http://www.conceptsystems.com/ • http://www.definitivesoftware.com/ • http://www.strategyroundtable.com/ • http://www.srcsoftware.com/ 32