Examination Of Planning Techniques And Contingency Strands In Strategic Management Feasibility: A Discourse

The objective of this manuscript is to theoretically and empirically evaluate the application of planning techniques and associated contingency strands in the strategic management processes. Planning itself is the process of setting objectives and the decision of how they are to be achieved. The end product of planning is a plan irrespective of its continuous nature. The paper examined the relevance and characteristics of planning, patterns of planning, and contingency planning. The planning techniques dealt with in this paper that would ensure effective strategic management feasibility include forecasting, both quantitative and qualitative perspectives, with relevant examples; including forecasting usefulness, general purpose of forecasting and types. Other techniques of planning and applications explored and applications in the study are budgeting, scheduling and sequencing, in addition to types of schedules and techniques that would statistically enhance strategic management processes feasibility. The adoption of relevant planning techniques and the feasibility is therefore recommended. The study also recommends the need for contingency plans with time and space.


INTRODUCTION
Planning in itself is a decision-making process and involves setting of objectives and deciding how they are to be achieved. The end product of planning is plan, which is a blue print to The American Journal of Management and Economics Innovations (ISSN -2693-0811) Published: February 10, 2021 | Pages: 1-16 Doi: https://doi.org/10.37547/tajmei/Volume03Issue02-01 IMPACT FACTOR 2021: 5. 562 achieve firm's objectives. It is important to understand that the concept of planning involves two key aspects: (1) developing the goals and objectives an organization seeks to attain, and (2) deciding on the means to achieve them. It may not be so necessary for one person or group to perform both activities.
In fact, it may be possible and even desirable for one department to define the organizational goals and objectives, while other departments focus on the means to achieve them. For instance, top manager may establish the goals and objectives of producing a new product within two years, and engineers in the organization may be responsible for developing the means to accomplish this objective. However, in all instances, managers should closely coordinate the development of goals and objectives, as well as, the creation of means to achieve them. Basically, there are two types of planning: (a) strategic planning and (b) tactical planning. Strategic planning involves making decisions about the organizations long-term goals, objectives and strategies. Strategic planning is the foundation of strategic management process and plays vital roles to the effectiveness of every organization (Chikwe, n.d.). Relatedly, tactical planning is the process that specifies the details of how an organization can achieve its overall objectives. Tactical planning apply to specific areas or parts of the organization and derived from strategic objectives. Chikwe further specifies that strategic planning cover shorter period of time horizon, and must of necessity, be updated continuously to meet current challenges, with time and space, since it is specific and directional.
Strategic planning in large organizations include, contingency planning, and this involves the preparation for unexpected, major, and quick changes (either positive or negative) in the environment, that will have a significant impact on the organization and require immediate responses (Hellriegel, Jackson and Slocum, 2005). Planning in itself is concerned with ends (what is to be done, i.e. objectives), as well as with means (how it is to be done, i.e. strategy).
As can be reasoned, and noted that planning is basic to the other fundamental management functions. Through planning, a manager attempts to prepare for and predict future events. Without the activities determined by planning, there would not be anything to organize, no one to direct, or activate and need to control. Planning is pervasive in nature.
Planning involves the construction of a programme for action to achieve stated goals and objectives through the use of procedures and practices.

THEORETICAL FRAMEWORK AND REVIEW OF RELEVANT LITERATURE
Planning is the selecting, relating of facts, and the making and using of assumptions, regarding the future in the visualization and formulation of proposed activities believed to achieve desired results.

Patterns of Planning
Planning differs widely among enterprises. For instance, some organizations may stress strong and persistent growth, while some pay little attention to change future events.
There are therefore, three suggested divergent and current patterns in planning practice as specified below (Awujo, 1989): • Satisfying: this aspect was introduced by Herbert Simon. He offers this satisfying concept as a substitute for the maximization concept. In this way, and adoption, deficiencies are corrected and customary ways of business are preserved. Also, survival therefore, becomes the major importance, while growth and development are secondary. • Optimizing: this stresses on doing, as well as what is possible. Optimum plans are not always attained, but close approximation of them. • Adaptivizing: this stresses that operations should be adapted to short run and also to major future changes.

Contingency Planning and Plan
Contingency plan is the product of contingency planning, defined as the alternative plans that can be used if certain major events do not occur as expected. Contingency plan is like "a mechanic tool box", where there are many tools and no one tool can solve all problems (Chikwe, n.d.). Every problem has a solution there.
The basic benchmark relating to good strategic management is that companies set up plans on ways to handle unfavourable and favourable events before they happen. Many organizations make contingency plans to guide against unfavourable events. However, this arrangement according to David (2009), is somewhat a mistake, in that, both threats minimization and capitalizing on opportunities are still ways of improving a company's competitive position. Irrespective of the level of carefulness exercised in strategies formulation, implementation, and evaluation and control, unforeseen events, such as natural disasters, arrival of very strong competitors, workers' strikes, boycotts and government actions, can still render the strategies obsolete. Nevertheless, in order to minimize the impact of potential threats, organizations are advised to develop contingency plans and incorporate same as part of their strategy-evaluation process. The alternative strategies that were not selected for implementation can also serve as contingency plans, if selected ones did not work. Reasons why firms establish contingency plans in organizations as opined by David (2009)

Forecasting
This was popularized by the decision-making school of thought of Herbert Simon and others. Forecasting can be defined as an attempt to predict the future by using qualitative or quantitative means. In an informal way, forecasting is an integral part of human activity, but when viewed from the business point of view, increasing attention is being given to formal forecasting systems which are constantly being reviewed. Planning and forecasting are closely related in such a way that managers tend to equate the two. However, planning is concerned with setting goals and objectives, and with developing, projecting, predicting, or estimating some future events or conditions of the organizational environment.
Forecasting is a fundamental part of planning. It is the source of the organizations planning assumptions, which in turn are the foundations upon which long-range plans and strategies are developed. Therefore, the accuracy of the forecast, which in turn, is a function of the rate at which the organization's environment is changing. Thus, a central problem to planning in any organization is knowing what is likely to happen, both in the organization and its external environment. In some sectors, a top manager who fails to anticipate future events can misallocate resources; attract adverse publicity and even removal from office. In the private sector of the economy, ineffective forecasting can lead to the selection of incorrect course of action, unsold inventories, decreased profits and in some cases, the financial failure of the firm.
While these examples are extremes, Gannon (1977), emphasize the critical role which forecasting plays for both individual manager and the organization. A general manager has to know the history or knowledge of the organization, without which he cannot forecast effectively and plan.
Virtually, every form of decision-making and planning activity in business involves forecasting. Typical applications include.

Statistical Forecasting Techniques
Statistics is simply defined here as, the science of chance and risk, measuring accuracy, reliability and validity of information and relationship for decision making. There are many forecasting techniques, but however, only a few of them have received attention and recognition in strategic management circles.
These techniques have often been used in conjunction with each other for the identification of opportunities and threats.

Qualitative Techniques of Forecasting
These are techniques used when data are scarce, for instance, the first introduction of a new product. The techniques in use are Delphi method, developed by Rand Corporation (i.e. use of expert opinion or panel through sequential questionnaire), historical analogy (i.e. use of brainstorming when there is no previous data on exact previous performance) and market research. These involve the use of intuition, human judgement, and experience to turn qualitative information into quantitative estimates. It is also important to note that, although, while qualitative techniques are used for both short and long-term purposes, their use becomes of increasing importance as the time scale of the forecast lengthens. Even when past data are available, so that standard quantitative techniques can be used, long term forecasts require judgement, intuition, experience, flair, and other qualitative factors to make them more useful. As the time scale lengthens, past patterns become less and less meaningful.

Exponential Smoothing
Exponential smoothing involves the automatic weighting of past data with weights that decrease exponentially with time. This implies that the most current values receive the greatest weighting, and the older observations receive a decreasing weighting. The exponential smoothing technique is a weighting moving average system and the underlying principle is that, the New Forecast = Old Forecast + a proportion of the forecast error. The simplest formula is: New Forecast = Old forecast + x(latest observation -old forecast); where, x is the smoothing constant; the value of the smoothing constant x can be between 0 and 1. The higher the value of x, the more sensitive the forecast becomes to current conditions; whereas, the lower the value, the more stable the forecast will be, and that it will reach less sensitively to current conditions.
In times of changes and instability, a large fraction (0.4 and 0.8) is assumed and used, while in a stable situation, a small value of 0.1 and 0.3 is employed. From the above description, it is clear that we must determine a previous forecast and the value of x before a new forecast can be made.
When past data are available, the initial value Fn-1 can be a simple average of the most recent observations. The exponential smoothing method is used mainly in operational planning such as, plant capacity planning, monthly sales forecast, inventory usuage, and so on.
Example: The historical demand for a spare part is given below as:

Linear Regression Analysis Method
Regression is the process of predicting (or estimating) variable Y using variable X. Regression is a statistical technique which can be used for longer term forecasting, which seeks to establish the line of 'best fit' to the observed data. The data could be shown as a scatter diagram and the line of best fit drawn freehand, but naturally, the lines drawn in this way would vary according to the judgement of individuals. To overcome this difficulty, a mathematical method known as the least squares method has been devised which makes it possible to calculate the best fit. The least square method or linear regression method uses general form for the equation of any straight line on a graph.

Y = a + bx
Where, a and b are constants, and where a represents the fixed element (intercept) and b represents the slope of the line thus: The constant term 'a' is determined from the relation, The values of sx, sy and y x, are usually quickly determined using the scientific calculator.
Example: The historical demand for a product is given below as: Using least square regression analysis to make a forecast for June. What the range of this will be forecast, using two standard errors of estimate?
Let y represent the corresponding demand n = 5.  Short-range scheduling decisions: It involves production scheduling, adjustment in personnel actions, and procurement management (the determination of supplies which the organization needs to function effectively). result is sometimes an outstanding failure to achieve one or more of these four purposes. For example, the fashion industry may underestimate the strength of customer's resistance to certain types of wears, to the extent that dozens of firms in such production may go bankrupt in the resulting downturn.

Types of Forecast
In some general terms, forecasts are of three basic or major types: the long-range, the shortrange and the rolling forecast.


The long-range: This refers to the longterm planning needs of the organization. In this case, managers examine information that has traditionally indicated changes in business and economic conditions in the distant future. For example, the general state of the economy.  The short-range forecast: This type describes the firm's immediate needs. It is usually more detailed. It ranges from days to a few months.  The rolling forecast: This is constantly updated as the time for accomplishing an objective approaches and a new information becomes available. It tries to accommodate both the past, present and future, and rectifies the shortfalls or mistakes. It integrates the long-range and short-range forecasts into one comprehensive forecast that is constantly revised. If goals are not met, or if conditions change, management alters its rolling forecast.
In general, the rolling forecast seems to be more useful than either long-range forecasting alone. It is flexible and sensitive to economic changes, and it can be used for short-range and long-range planning. The rolling forecast also encourages managers to focus attention constantly on how effectively their planning is working.

Budgeting
Budgeting is another planning technique in which specific amounts of revenue and costs are planned for a given period of time. A budget according to Garrison (1979) is a detailed plan showing how resources will be acquired and used over some specific time interval. It represents plan for the future expressed in formal quantitative terms. Budgeting itself therefore, is the act or process of preparing a budget. In many activities, planning your time is critical. Business budgets are the principal financial means by which the manager can formalize and express his plan in terms of revenue and costs.
Virtually, everyone prepares and makes use of budgets of some kind, even though they may not for certain, realize what they are doing as budgeting. For example, most people draw estimates of the expected income over some near or future time period, and accordingly, plan expenditures for food, clothing, housing, and so on. Accounting data generally give the manager a foundation of his historical costs and revenue upon which he builds his projections into the future. Budgets also serve as control mechanism for activities of various functions and operating segments of the firm. Budgets reflect joint planning of all operating segments, and so, budget committees usually develop plans in order to ensure the cooperation and understanding of all principal parties, who will later be affected by the budget. The period of time for the budget is an (ISSN -2693-0811) (1) First, it should be short enough to permit the making of fairly accurate predictions.
(2) It should be long enough to identify significant problems of policies, strategies, and procedures.
A number of factors can affect the length of the budget period: The availability of factual information; (b) The ability of the market faced by the firm; (c) The rate of technological progress; (d) The seasonal characteristics of the industry; (e) The length of the production cycle; (f) The customary credit extension time for customers (g) The delivery times of both raw materials and finished products.
In addition, the budget period must coincide with the accounting period so that the comparisons between actual results and budget amounts can be made routinely. A budget for a stated future period of time that does not make allowance for cost changes due to possible changes in the amount of output is called a fixed budget. A flexible budget shows expected cost of production at various levels of production. The prerequisite for flexible budgeting is the separation of fixed and variable costs. Once the flexible budget is formalized and reports are flowing to management, opportunities for analysis is open.

Advantages of Budget
Some advantages of budgeting as opined by Garrison (1979) include:  Cost variations due to output changes are indicated  The segregation of fixed and variable costs is useful for other management functions,  The standard costing is more easily implemented.  It requires managers to bring planning to the forefront of their minds.  It provides a vehicle for communicating these plans in an orderly way throughout an entire organization.  It forces managers to think ahead by requiring them to formalize their planning efforts.  It provides definite goals and objectives which serve as benchmarks for evaluating subsequent performance.  It uncovers potential bottlenecks before they occur.  It coordinates the activities of the entire organization by integrating the plans and objectives of the various parts. By so doing, the budget ensures that the plans and objectives of the parts are consistent with the broad goals and objectives of the entire organization.

Zero-Base Budgeting
The zero-base budgeting derives its name due to the fact that managers may be required to start a zero budget levels every year and justify all costs as if the programmes involved were being initiated from the same time or beginning of every accounting period. What this really implies is that, no costs are viewed as being ongoing in nature. That is, the manager In sum, budgets are important planning techniques available not only to the strategist or manager, but also, to individuals and heads of households. Such estimates improve one's approach to the future, and allow less hesitancy in strategic decisions than would be time otherwise.

Scheduling and Sequencing
Scheduling and sequencing activities constitute a specific form of planning and planning technique, just as forecasting and budgeting. The operation of an office, store or plant usually involves working with a definite space constraint. Such activities as plant location, plant layout and channels of transportation, involve pictorial diagrams using general concepts similar to those for mapping of geographical areas. Scheduling usually is the term used for planning the time for the use of physical and human resources, and for the various activities of an organization.
Sequencing is the process of determining which job to start first, and such can be achieved by the application of priority rules. It requires that jobs should be sequenced according to one piece of data such as, processing time, due date or order of arrival (Chase, Aguilano, and Jacobs, 2001) Scheduling seeks to provide the answer to the question of "when to produce" and involves relating production to time. It calls for establishing time limits on which individual operation is to be performed in the manufacturing, or other productive activity process, so that goods and services are produced when they are required. Scheduling also ensures that the different operations comprising the production process will be coordinated (Clarke, 1989).
Scheduling requires information about the following:  Quantities of finished goods to be manufactured, their delivery dates and delivery requirements e.g. place of delivery.  Production capacity available.  Existing and forecast future workloads  The quantities of raw materials required i.e. that which is in stock and that which must be acquired  The time needed to acquire the raw materials and components required from outside suppliers.  The standard times allowed for each operation.

Types of Schedules
 Production schedules: This involves a weekly or monthly breakdown of production requirements for each product for a definite period, as shown in the master schedule. The specific product schedules are released for a manufacturing schedule for production lines or manufacturing orders for job-lot production. Production schedule is a subset of master schedule.  Master schedule: This is also called overall since it connects other activities. Master schedule points out weekly or monthly figures of production requirement of all the products or job-lots to be manufactured. It denotes that plant capacity is booked for a certain period, and that new orders can be accepted only after that period.

Scheduling Techniques
Numerous scheduling techniques are available, ranging from simple everyday devices, such as:  Appointment books  Reservations for use of space and equipment  Rough notes on a memo pad  Complex sophisticated activities of the traditional moon shots in most rural or urban communities.
In addition, there are other proven, simple graphical devices in use for scheduling. A calendar is of course, the basic aid for planning time. As the expected use of equipment, space or human resources approaches capacity, the manager needs better scheduling devices. Moreover, when one operation cannot start until a previous operation is completed, scheduling tends to become tighter.

CONCLUSIONS
Attempts have been made to explore the evaluation of relevance of planning techniques and contingency strands in strategic management architecture. The study has established in specific terms, the characteristics of planning, the patterns as well as the relevance for every manager or organization to have contingency planning. The need for planning tools and associated techniques has also been made explicit and cannot be overemphasized. Practical examples of the planning techniques explored in the paper have demonstrated the need for adoption of relevant techniques in firm's business management. The paper has also revealed that in predicting the future and effective strategic management feasibility, various techniques of forecasting are pertinent and such include the forecasting of economic conditions, specific product sales arrangements, supply of scarce resources as well as issues relating to the availability of skilled workers.

It
is therefore recommended that organizational members should of necessity, adopt relevant planning techniques as well as the evaluation of the feasibility with time and space. The study further recommend the need for every firm to maintain contingency plans with time and space.