Planning: Concept, Levels & Techniques

1. Concept of Planning

Planning is the art of anticipating future events and designing courses of action to achieve organizational goals. It bridges vision and execution by setting objectives, policies, procedures, and strategies.

Key Features of Planning

mindmap
  root((Planning))
    - **Purposeful**: Achieves specific goals
    - **Future-oriented**: Anticipates challenges
    - **Continuous**: Evolves with changing environments
    - **Flexible**: Adapts to new data
    - **Integrated**: Links all functions (marketing, finance, HR)
    - **Economic**: Maximizes resources

Planning vs. Other Functions

Why Plan? (Advantages)

• Direction: Provides clarity on goals.
• Efficiency: Reduces waste via resource optimization.
• Flexibility: Allows adjustments to unforeseen events.
• Innovation: Encourages creative problem-solving.
• Risk Mitigation: Prepares for contingencies (e.g., NTC’s backup power plans).

Disadvantages

• Rigid: Over-planning can stifle adaptability.
• Costly: Requires time and expertise.
• Uncertainty: Future predictions may fail (e.g., COVID-19 supply chain disruptions).

2. Levels of Planning

Planning varies by scope and decision-makers. The hierarchy is:

flowchart TD
    A["Strategic Planning"] -->|"Long-term, broad goals"| B["Tactical Planning"]
    B -->|"Medium-term, departmental"| C["Operational Planning"]
    C -->|"Short-term, daily tasks"| D["Execution"]

A. Strategic Planning

• Who: Top management (CEO, board).
• Timeframe: 3–5+ years.
• Focus: Organizational survival and growth.
• Example: Nepal Investment Bank’s 2025 digital banking expansion to compete with eSewa/Khalti.
  • Worked Example:
    • Goal: Increase mobile banking users by 20% in 3 years.
    • Strategy: Partner with Ncell for USSD-based transactions.
    • Metric: Track adoption via monthly reports.

B. Tactical Planning

• Who: Middle managers (department heads).
• Timeframe: 6–24 months.
• Focus: Implementing strategic plans.
• Example: Daraz’s warehouse logistics in Kathmandu.
  • Worked Example:
    • Goal: Reduce delivery time from 5 to 3 days.
    • Tactic: Optimize routes using Google Maps API (like NTC’s fleet management).
    • Tool: SWOT analysis to identify bottlenecks (e.g., traffic in Thapathali).

C. Operational Planning

• Who: Frontline supervisors.
• Timeframe: Daily/weekly.
• Focus: Daily tasks to meet tactical goals.
• Example: NTC’s daily call center operations.
  • Worked Example:
    • Goal: Handle 10,000 calls/day.
    • Plan: Schedule agents in shifts (like Pathao’s driver shifts).
    • Tool: Gantt charts to track call volumes.

3. Techniques of Planning

Techniques are tools to make planning data-driven and systematic.

A. Forecasting

Predicts future trends using historical data.

• Methods:
  • Time-series analysis: Trends over time (e.g., Daraz’s Q4 sales spike).
  • Delphi method: Expert opinions (e.g., NEPSE predicting stock market trends).
  • Moving averages: Smooths fluctuations (e.g., NTC’s call volume forecasting).

B. Budgeting

Allocates resources financially.

• Types:
  • Master budget: Sum of all department budgets (e.g., NIB’s annual budget).
  • Zero-based budgeting: Justify every expense (used by government ministries).
  • Flexible budgeting: Adjusts for volume changes (e.g., Himalayan Java’s coffee bean orders).

C. Scenario Analysis

Tests "what-if" scenarios.

• Example: Ncell’s 5G rollout plan.
  • Scenario 1: High adoption → Invest in more towers.
  • Scenario 2: Low adoption → Delay expansion.

D. PERT/CPM

Critical Path Method for project scheduling.

• Used by: Construction firms (e.g., Chaudhary Group’s infrastructure projects).
• Visual:

  flowchart TD
      A["Start"] --> B["Design"]
      B --> C["Permits"]
      C --> D["Construction"]
      D --> E["Testing"]
      E --> F["End"]

E. Benchmarking

Compares performance against industry leaders.

• Example: Nabil Bank vs. Standard Chartered for customer service metrics.

In the Real World

1. eSewa’s Payment Gateway Planning

   • Idea: Scenario analysis to handle Black Friday spikes.
   • How: Simulated 100,000+ transactions/day to test server capacity (like NTC’s peak-hour call tests).

2. Daraz’s Inventory Planning

   • Idea: Forecasting using past sales data to avoid stockouts.
   • How: AI predicts demand for Diwali gifts (e.g., "50% more LED bulbs sold in Oct").

3. NTC’s Network Expansion

   • Idea: Strategic planning to cover remote areas (e.g., Rolpa).
   • How: Phased rollout with tactical use of Gantt charts to track tower installations.

4. Process of Planning

A 6-step cycle ensures systematic planning:

flowchart TD
    A["Define Objectives"] --> B["Analyze Situation"]
    B --> C["Develop Premises"]
    C --> D["Identify Alternatives"]
    D --> E["Evaluate Alternatives"]
    E --> F["Select Best Plan"]
    F --> G["Implement & Monitor"]
    G -->|"Loop"| A

Step-by-Step Breakdown

1. Define Objectives

   • Example: Ncell’s goal: "Increase 4G coverage to 90% by 2024."
   • Tool: SMART criteria (Specific, Measurable, Achievable, Relevant, Time-bound).

2. Analyze Situation

   • Example: Daraz scans Kathmandu traffic patterns to optimize delivery routes (like Pathao’s AI).

3. Develop Premises

   • Assumptions about future conditions.
   • Example: "Inflation will be 6–8% in 2024" (used by banks for loan interest rates).

4. Identify Alternatives

   • Example: NEPSE’s IPO approval process has 3 paths:
     1. Fast-track (for tech startups).
     2. Standard (6 months).
     3. Delayed (due diligence issues).

5. Evaluate Alternatives

   • Tools: Cost-benefit analysis, SWOT, decision trees.

6. Implement & Monitor

   • Example: NTC’s pilot of fiber-optic cables in Lalitpur before full rollout.

5. Advantages and Limitations of Planning

Exam Tip

• High-Weightage Topics:
  • Levels of planning: Always link to real examples (e.g., "Ncell’s tactical plan for 5G vs. NIB’s strategic digital banking").
  • Techniques: Mention 2–3 tools (e.g., "NEPSE uses forecasting for IPO timing; Daraz uses PERT for warehouse moves").
  • Process: Draw the 6-step flowchart and label each step with a Nepali company example.
• Common Pitfalls:
  • Avoid vague answers like "planning is important." Instead, say:

    "Strategic planning at Nabil Bank ensures it competes with global banks by setting a 5-year goal to process 50% of transactions digitally, using tactical budgeting to allocate IT funds."

  • Marks are lost if you don’t connect theory to Nepal (e.g., eSewa, Daraz, NTC).
• Case Study Practice:
  • For 10 marks, write a mini-case like:

    "Pathao’s delivery delays in Kathmandu Valley were reduced by 30% using operational planning techniques. Explain how tactical and operational planning could further improve its services."

Visual Summary: Planning in Action

mindmap
  root((Planning in Nepal))
    - **Strategic**
      - NIB: Digital banking (2025)
      - NEPSE: IPO reforms
    - **Tactical**
      - Daraz: Warehouse routes
      - Ncell: 5G rollout phases
    - **Operational**
      - NTC: Daily call center shifts
      - Pathao: Driver scheduling
    - **Techniques**
      - Forecasting: Daraz’s Diwali sales
      - Budgeting: Himalayan Java’s coffee orders
      - PERT: Chaudhary Group’s projects