Planning As An Effective Instrument For Business Development In Organizations
This research work is carried out to determine planning as an effective instrument for business development in organization. This can be attributed to the fact that the role of strategy in strategic planning helps to identify the general approaches that the organization will utilized to achieve its organizational objectives. The objective of this study is to find-out the proportion of oil companies that undertake planning and also to articulate the methods employed by the bank carrying out planning and strategy. The sources of data collected were both primary and secondary sources, the primary data were collected through questionnaire while secondary data were gotten through the review of related materials such as journals, textbooks and newspapers. The data collected for this study were analyzed using simple percentages. After due analysis of the data collected, it was discovered that planning affects organizational goals and the changes in the business environment affects the reviews of plans and strategies. The researcher therefore concluded that effective and efficient planning and management involves proper planning by lop management staff in order for them to actualize organizational goals and purpose.
Table of Content
- 1.1 Background of the study
- 1.2 Statement of the problem
- 1.3 Objective of the study
- 1.4 Research question
- 1.5 Significance of the study
- 1.6 Scope of the study
- 1.7 Limitation of the study
- 1.8 Definition of terms
- 1.9 Organization of study
Review of Literature
- 2.1 Conceptual Framework
- 2.2 Theoretical Framework
- 2.3 Empirical Study
- 3.1 Research Design
- 3.2 Population of the study
- 3.3 Sample size determination
- 3.4 Sample size selection technique and procedure
- 3.5 Research Instrument and Administration
- 3.6 Method of data collection
- 3.7 Method of data analysis
- 3.8 Validity and Reliability of the study
Data Presentation and Analysis
- 4.1 Data Presentation
- 4.2 Answering Research Questions
Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
1.1 Background of the Study
Around 1999, empirical researchers began to examine the performance and consequences of formal planning (Thune and House, 1999; Ansoff et al., 2000; Herold, 2001) and over 40 planning performance studies have appeared since that time. However, in recent years this line of research has slowed to a trickle and with good reason. Previous studies lacked theoretical ground, produced a bewildering array of contradictory findings, drew heavy criticism for inadequate methodologies and had little or impact on management research or practice (Shrader et al., 1984; Pearce et al., 1987a, b). Nonetheless, it seems evident that the planning-organizational growth relationship bears significantly on strategic management research and practice and that scholars should not abandon this line of enquiry altogether. This study re-evaluates the planning-performance research; the critical assessment of strategic planning and its impact on organizational performance which has effect on its survival.
Planning can be defined as the process of using systematic criteria and rigorous investigation to formulate, implement and control strategy and formally document organizational expectations (Higgins and Vincze, 1993; Mintzberg, 1994; Pearce and Robinson, 1994). Planning is a process by which we can envision the future and develop the necessary procedures and operations to influence and achieve that future. As in many other fields, planning professionals often cloak their work in pseudo-scientific jargon designed to glorify their work and create client dependence. In reality, planning processes are neither scientific nor complex. With modest, front-end assistance and the occasional services of an outside facilitator, organizations can develop and manage an on-going and effective planning program. planning consists of a set of underlying processes that are intended to create or manipulate a situation to create a more favorable outcome for a company. This is quite different from traditional tactical planning that is more defensive based and depends on the move of competition to drive the company’s move. In business, planning provides overall direction for specific units such as financial focuses, projects, human resources and marketing.
Planning may be conducive to productivity improvement when there is consensus about mission and when most work procedures depend on technical or technological considerations. This study goes beyond the observation of some research that questioned the existence of direct casual relationships between the use of planning and organizational growth. This study draws from some of the many publications on the use of planning in the private sector and from the growing number of those that deal with its uses and potential for the public sector.
One of the major purposes of planning is to promote the process of adaptive thinking or thinking about how to attain and maintain firm environment alignment. (Ansoff, 1991). Commercial banks however, appear to gain more because they can derive considerable benefits not only from adaptive thinking, but also from integration and control. Small firms can derive considerable benefits from adaptive thinking but probably gain less than large firms from the integration and control aspects of planning. Evered (2000), suggested that the different uses of the term planning vary from broad ones (which include the purposes of defining purpose, objectives and goals) to very narrow ones (namely, those that deal with the means for achieving given objectives). Given Evered’s differentiation between broader and narrower definitions of strategy, Bozeman’s definition is a narrow one; one that assumes an ultimate mission of the organization. Bozeman’s definition assumes that the planning/management process is triggered by changes in policies and priorities (Bozeman, 2003). Hence, according to (Eadie, 2004), planning may be defined broadly or narrowly. However, this formulation still does not help managers in the public sector, for now they need to decide not only whether they want to develop plans but also whether they should approach such plans with a global perspective or with a narrower one. Thus, what seems to be a problem of semantics masks a fundamental question about the inclusion or exclusion of goal definition from the planning process.
According to Berry (1997), planning is a tool for finding the best future for your organization and the best path to reach that destination. Quite often, an organization’s strategic planners already know much of what will go into a strategic plan. However, development of the strategic plan greatly helps to clarify the organization’s plans and ensure that key leaders are all on the same script but far more important than the plan document is the planning process itself. The planning process begins with an assessment of the current economic situation. First, examining factors outside of the company that can affect the company’s growth. In most cases, it makes sense to focus on the national, local or regional and industry economic forecasts. This part of the analysis should begin early, at least a quarter or so before the formal planning process begins. Hence, it’s been concluded that, planning positively affects organizations’ growth or more specifically, the amount of planning an organization conducts positively affects it’s financial growth.
Since the case study used for this research study is a bank, there is a need to understand planning and financial growth relationships in banks. The result from past researches suggested that the intensity with which banks engage in the planning process has a direct positive effect on banks’ financial growth and mediates the effect of managerial and organizational factors on bank’s growth. Results also indicated a reciprocal relationship between planning intensity and organizational growth. That is, planning intensity causes organizational growth and in turn, organizational growth causes greater planning intensity (Hopkins and Hopkins, 1997). There is a constant need for organizations, especially financial institutions like banks to think strategically about what is going on (Sclnnellller, 1995). This appears to be precisely what banks, in particular have begun to do in recent years.
In response to increasing complexity and change in the financial services industry, banks have turned to planning.
The relatively new trend towards planning in banks is viewed as a move designed not only to help them negotiate their environment more effectively, but to improve their organizational growth as well (Bettinger, 1996; Bird, 1991; Prasad, 1999). In consistent results of bank-related research, however, have not fully resolved the issue of whether planning leads to improvements in banks organizational growth. The intensity with which managers engage in planning depends on Managerial (e.g., strategic planning expertise and beliefs about planning-performance relationships), Environmental (e.g., complexity and change) and Organizational (e.g., size and structural complexity) factors. The effects of these factors on planning intensity have been suggested by several studies (Kallman and Shapiro, 1990; Unni, 1990; Robinson and Pearce, 1998; Robinsonet al., 1998; Watts and Ormsby, 1990b).
Studies that have analyzed the relationship between planning and organizational growth proved that the intensity with which banks engage in the planning process intervene-that is cause an indirectness and lack of one-to-one correspondence-between factors such as planning expertise and beliefs about planning growth relationships (managerial factors), environmental complexity and change (environmental factors), bank size and structural complexity (organizational factors) and bank’s financial growth. As suggested by the inconsistent research findings, past studies have miss-specified the relationship between planning and organizational growth in banks.
Misspecification of this relationship might be attributed to past studies’ lack of attention to the relationship among these managerial, environmental, organizational factors and their potential impact on planning intensity and performance (Hopkins and Hopkins, 1997). Subsequently, the consideration of such factors in the present study is viewed as a significant issue that holds implications for future research as well as for planning practices.
1.2 Statement of the Problem
Past and recent research studies have made it clear that there is an increased internal and external uncertainty due to emerging opportunities and threats, lack of the awareness of needs and of the facilities related issues and environment and lack of direction. Many organizations spend most of their time realizing and reacting to unexpected changes and problems instead of anticipating and preparing for them. This is called crisis management.
Organizations caught off guard may spend a great deal of time and energy playing catch up. They use up their energy coping with inundate problems with little energy left to anticipate and prepare for the next challenges. This vicious cycle locks many organizations into a reactive posture. This research study is to assess the impact of planning on organizational growth, which at the long, enhances organizational survival.
1.3 Objective of the Study
The objective of this study is to:
- To determine the effect of planning on the performance of an organization.
- To ascertain the relationship between planning and the achievement of organizational goal.
- To determine the effect of changes in the business environment on plans.
1.4 Research Question
Based on the statement of problem, the following research questions are raised:
- How does planning affect the performance of your organization?
- What impact does planning has on the achievement of organizational goals?
- How does changes in the business environment affect the plans of your organization
1.5 Significance of the Study
This will be of great benefit to both large and small business organization alike, in their business activities. The results of this study will also be of immense benefit to both individuals and bodies in organizational development. A study of this nature will assists management and students of management sciences to understand the practical application of the planning concepts and principals among organizations.
1.6 Scope of the Study
This research work is on planning and organizational growth of commercial banks in Lagos state, using Diamond bank as a case study. The study could not cover other banks due to in-adequate disclosures in the planning strategies from these banks.
1.7 Limitation of the Study
In the process of carrying out this study, the following problems were encountered by the researcher, this includes:
The time within which this work must be completed and submitted for appraisal stood as an impediment tothis project work.
Due to lack of finance at the disposal of the researcher, affected the quality of this work, cause my sponsor(parents) prefers to spend money on my younger once admission into the University recently (2019/2020) academic session) rather than devoting huge financial resources on this study that will be of economic and academic importance in years to come.
1.8 Definition of Terms
For the clarity of this study, some basic terms have to be defined in the context, they are used in this study, they are:
This is a useful act or process that help in day-to-day activities in an organization or it is a process that guide our daily operation in the organization.
These are necessary effort made by an organization to help develop good business relationship that members of that same organization share.
This is a particular field on knowledge, expert and specialization on a particular job.
This is a period in an organization where workers are being laid off .
This entails the corrective measure documented by the organization that is used to check and balance the operational activities.
These are rules and regulations that guide inter-personal conduct in an organization.
It is a comprehensive statement of an organization’s strategic mission, objectives and strategy, a detailed road map of the direction and course the organization presently intends to follow in conducting its activities.
It refers to management action plan for achieving the chosen objectives. It specifies how the organization will be operated and run and what entrepreneurial, competitive and functional area approaches and actions will be taken to put the organization in to the desired position. Strategic Mission:- It consists of long term vision of what an organization seeks to do and what kind of organization it intends to become. It provides an answer to the question, “What Is Our Business and What will it be”. It indicates what the organization does and where it is headed.
It indicates both the specific performances and organization seeks to produce through its activities and the competitive position the enterprise wishes to occupy in the market for its products.
1.9 Organizations of the Study
The chapter one consist of the introductory part of the study which includes the study background, the statement of the research problem, the study objective and scope of the study.
The second chapter is a critical review of other literatures relevant to the study and its objectives including the theoretical framework for the study. While the third chapter is methods of data collection, sampling and data analysis used in conducting the study. The fourth chapter centres around the research findings including an analysis of how it relates to previous findings. The fifth chapter consists of the summary of findings, conclusion and recommendations base on the study objectives.
Summary, Conclusion and Recommendation
This study revealed that oil companies are involved in oil exploration and production. This is in line with the opinion of Fubara (1986) that “An organization avoids the threats in the environment by engaging in series of activities which includes the production of goods and services that ensures its continued relevance in the society”.
It was also discovered that strategic planning in the banks are carred out by top level management, this is in line with the view of Mesie (1978) “that planning information relates to top management task in deciding on objectives of the organization and on policies that governs the acquisition and disposition of the resources” also Rosebery (1976) opined that long range (Planning) is generally undertaken by top level management.
In light of this, Fubara (1986) equally expressed the same view when he described planning as “Management of Organization from the Top”. These views do not however, suggest total isolation of the rest level of managers to evolve a better planning and decision skills in planning.
It was observed that plans and strategies are determined by the objectives of the organization competitive activities and environmental factors. So before undertaking planning, oil companies should take into consideration these determinants of the study revealed in changes of business environment affects the review of plans and strategies. plans and strategies are reviewed mostly by all companies between two-four (2-4) years based on the changes occurring in the business environment.
Also, most oil companies adopt planning which ensures effective organizational performance. This is in harmony with what Umoren (1985) that some of the main thrusts of change in our industrial society serve to remind us that planning is inescapable if the-organization is tosurvive protracted product development cycles, accelerating rate of product obsolescence, rapid state of changes in technology, changing social values, increasing demand of people (Workers and Shareholders) for more participation in decision process growing organizational complexity and inter-dependency.
It was also observed that a change in the business environment will call for organizational review of plans and strategy. There is an indication that plans and strategies are determined by the objectives of organization, competitive activities and environmental factors. So before undertaking planning, oil companies should take into consideration these determinants.
This study also reviewed that planning enables standard of performance to be established, this enhance the control of mechanism to become effective which in turn facilitates company growth and ensures the sitting and acceptance of common goals. It also helps the firms to have to an extent the magnitude of risk taking and how to effectively cushion its.
planning and strategic decision making is paramount in effective utilization of scare resources and good financial management as well promote cordial relationship between management and their staff, thereby helping staff to understand stated organizational goals and Functions. Moreso, uncertainty and environmental threats are taken care of, thereby safe guarding the future of establishment/organization. The evaluation of stated objectives and decisions made helps organizational strategies to be effective, efficient and creditable. This is because their actions affect the overall activities of the organization.
Lengthy period should not be encouraged in planning as this affects the social economic and political atmosphere present in existence in Nigeria where their price fluctuation and economy recession as such all forward looking organization should embark on planning to be able to overcome the turbulent business environment.
Base on the findings above, the researcher recommends thus.
Planning and strategy should be adopted by firms that will position the firm to achieve its objectives rather than watch or wonder at changes that take place in the environment to enable the firm adapt promptly to these changes. It is good for any organization that wants to grow in the recent business environment because its necessity gives deeper understanding on how managers should use planning and strategy to detect changes in the economic environment and how these changes may affect their business operation especially those factors that influence economic growth and future aggregate demand engage on government and private in planning and strategy in order to facilitate control for effective and efficient management. There are plans to be use as standard which specify goals and objectives of the firm to accomplish within a specific period of time.
Lastly, since planning and strategy can be used to establish standard of performance in an organization, it is recommended that oil companies should engage on effective mechanisms that will facilitate companies growth and development.
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