Management Planning

Planning is a management function that involves making decisions about goals and activities to be pursued in the future by an organization. It is a purposeful effort directed and controlled by top executives and draws on knowledge and experience throughout organization. Effective planning helps organizations adapt to change by identifying opportunities, improving decision-making and avoiding crises. Planning sets the direction for other functions of management and for teamwork. All levels of management engage in planning.

Strategic planning is the process of developing and analyzing the organization's mission, goals, strategies, and allocation of resources. A strategy is a course of action designed to achieve long-term goals. Strategies may take two, three, or as many as five years to implement. The length of time is generally determined by how far in the future the organization is committing its resources. Goals are the ends that the organization strives to attain. Many companies are moving to a system of continuous planning, to permit quicker response to changing conditions.

Strategic planning produces decisions and actions that shape and guide what an organization is, what it does, and why it does it. It requires broad-scale information gathering, an exploration of alternatives, and an emphasis on the future implications of present decisions. Top executives must answer such questions as "What is the purpose of this organization?" "What does this organization have to do in the future to remain competitive?" (Allen, 2002.) In the strategic planning process, the top executives define the organization's mission, analyze its strengths and weaknesses, identify opportunities and threats (SWOT), set goals and objectives, develop tactics and operations, and monitor the plan.

Top executives set very general, long-term goals that require more than one year to achieve including long-term goals, include long-term growth, improved customer service, and increased profitability. Middle-level managers interpret these goals and develop tactical plans for their departments. These plans are usually set to be accomplished within one year. Tactical plans have shorter time frames and narrower scopes than strategic plans. Tactical planning is the process of making detailed decisions about what to do, who will do it, and how to do it.

Front-line managers implement operational plans that are short-term and deal with the day-to-day work of their team. Short-term goals are aligned with the long-term goals and can be achieved in less than a year. Front-line managers set standards, form schedules, secure resources, and report progress. The front-line managers interpret higher management plans as they apply to his or her unit. Thus, operational plans support tactical plans. They are the front-line manager's tools for executing daily, weekly, and monthly activities. Examples of planning by front-line managers include scheduling the work of employees and identifying needs for staff and resources to meet future changes. (Allen, 2002.)

Some companies must create new strategic plans in order to address a legal, ethical, or corporate social responsibility (CSR.) Management theory on stakeholders proposes that large corporations have obligations beyond the traditional stockholder: "social contracts" with customers, suppliers, employees, trade associations, political groups, non-governmental organizations, governments, communities, among others.

In the early 1990's, cigarette companies came under fire from non-governmental organizations, governments and communities. Multiplying law suits, discovery and release of millions of pages of internal company documents, increasing restrictions on public smoking, legislative investigations, and growing political pressures to regulate the industry; all had dire implications for investor confidence and share price. Philip Morris chose to present itself as an ethical business with its stakeholders being the principal focus for social responsibility.

In 1996 its CEO Geoffrey Bible defended Philip Morris in an address to its employees stated:

I believe passionately that we are right, and let me tell you why. We are right because for millions of people, smoking is part of an adult lifestyle... We are right because cigarettes are a legal product... What some people may not understand is that we are an ethical company. Our tobacco business may be controversial, but we are principled people who are honest and straight-dealing... That is an absolutely critical part of our corporate culture.

Philip Morris set about to turn Bible's private manifesto into a public pronouncement. Geoffrey Bible recognized that image remake and philanthropy would not be enough; the product--cigarettes--was still the main issue.

In May 1999, a "Strategic Issues Task Force" was convened to decide how to use the company's new website to enhance public communications on various issues in the tobacco industry. The site was to publish information on smoking addiction, causes, ingredients, and cessation. The Strategic Issues Task Forces was asked to expand its role beyond a public relations effort and develop a global company policy around youth smoking prevention, marketing and advertising, product regulation, reduced risk products, and information on the website.

Philip Morris USA established a "Corporate Responsibility Taskforce" to explore developing a social report, the public statement of CSR. The "discovery" process was largely driven by mid-level managers. The desire for respect both within and outside the company played a dominant role in all the taskforce's deliberations. By the spring of 2001, the taskforce's main objective was to explore corporate responsibility and to reshape the statement of goals into its final form. 55 mid-level executives from various divisions of Philip Morris USA participated.

To implement the taskforce recommendations a Corporate Responsibility Team