CHAPTER TWO

LITERATURE REVIEW

2.1 Conceptual Review

Planning is essentially a process of preparing for the commitment of resources in the

most economical fashion, and by preparing or allowing this commitment to be made faster
and less disruptively. The decision making, which follows the development of plans, involves
the allocation of money, men and machinery and commits the company in the real world.
Planning is a thought process, involving ideas, words and paper models. Our thought
processes can be wrong, we must accept facts and the truth.

Nwachukwu (2019), describe planning as the one that involves the establishment of
organizational goal and identification of problems and sources, constraints and the
establishment of strategies to achieve on set of objectives. Information is needed to identify
as many alternative goals as possible.

Greson (2018) states that planning includes the managerial activities that decides the
goals and objectives of the establishment organization and make preparation from here and
get these i.e. how to meet or achieve the goals and objectives of the organization. He then
proceeds and said that planning is usually in phase or stages.

i. A planning of about (5) years or more (long term planning).

ii. A planning within a year (short term planning)

iii. Planning horizon exceeding one year, but less than five years are considered to be
(medium term planning)

Anthony (2019), sees planning as a vital, is the successful operation in any business
enterprise whether the firm has the crucial function of the management which is the tools for
making decision for the future. Gresay, (2018) defines planning as basic select of activities
from the many alternatives available from the purpose of achieving certain goals, planning
and control supplement each other but a plan without control with little or nothing.

The planning system of any organization will evolve the rough stages getting better of
each stage.

1
 The planning system of any organization therefore, more through the following four
main stages.

(i) Unplanned Stages: This is identified with the time a company first starts operation.
Management are busy hunting for customer materials, machinery etc. Management is
so engrossed with the day to day conditions for survival. There is no planning staff
and little or no time to plan.
(ii) Annual Planning Stages: Annual planning now evolved management recognize the
advantages of developing annual plan. Three approaches to planning are normally
adopted in this stages viz:
a. Top down planning: Top management set goals and plan for all level of
management. This goes with the theory X-veins of employees, these
employees dislike responsibility and preferred to be directed.
b. Bottom-up planning: This is the opposite of the first own goal and plan based
on the best they think can do this goal and goal plan, then sent it to higher
level based on theory states that employees committed of they participate in
the planning.
c. Goals Down - Planning: Most firms used the third system which is called
goal down-up- planning. Top management set goals fro the year the various
units of the company are responsible for developing plans to help the company
reach the goals, official approval of annual plan.
(iii) Budgeting System Stage: Budgeting system of planning, this is installed to control
cash flow, total sales fro coming year is estimated by management and cost on sales is
also estimated for coming year. The budget type of planning does not contain the full
scale plan.
(iv) Strategic Planning Stage: The major change is the addition of long range planning.
Efforts are to improve overall company’s effectiveness. Management realizes that
long range plan is suppose to come first and from it, the annual plan will be extracted.
Planning begins to take strategic character, planning in this stage how organization
will respond to unexpected development contingency plan are desired.
Meediham (2019), defined planning as a “business that requires input of time,
information, raw materials, capital, labour, paperwork”. The impact need to be put together in
an organized way. He further writes an importance of planning with the following principles.

2
 a. To focus attention on objectives: All planning must be directed towards achieving
organization objectives. The act of planning focusing attention on these objectives and
how they can be achieved, plans are also employed to interdepartmental activities which
are to ensure effective and more productivity.
b. Economic of operation: If plan is effective and efficient, it minimized cost and any
organization with a well planned action will be more effective then without a plan this
planning attempt to control wastage. The economic of planning can be clearly seen at
the production stage where a log of materials are being used, therefore constitute
efficient and guaranteed operation.
c. To facilitate control: A good planning provide performance standard, this is possible
because the company will have targets before making the plan, after it has been
improved on it activities compared with the present standard for the purpose of
controlling the deviation.
Ovansfied (2018), describes planning as the light information gathered during this
identification of opportunities open to the organization, the next stage in the process is that of
objective setting i.e. deciding on the aim and objective or purpose of the organization and the
target in which must be reached. This task must be the responsibility of the board of directors
and senior managers.

The following are the examples of the objectives:

i. Objectives must be defined and specific where possible for example, “an
expansion of output in percentage rather to become bigger”.
ii. It must be made possible to translate objectives into policies and plan for
execution e.g. achieve higher sale by heavier advertising and by spending more on
research and development.
iii. The time scale should be made clear and often have a series of short-term
objectives e.g. 6 months, 1 year of long-term e.g. 5 years.
iv. The various objectives must be compatible this requires that the constraints that
one objective create for the others must be identified.
v. Flexibility and scope for the revision of objectives and policies must be
maintained for example, if necessary adopted, if the initial objectives is to be
fulfilled.

3
Karmer (2019), describes the organization that it involved bringing other or the people and
materials needed to carry out plans and grouping the people to help them complete the
required tasks. In other words, it is the design on structuring of activities which are necessary
for achieving the objective programme, policies procedures, and method established the
planning function.

i. Normally, the process of organizing resources is a major method to implement plan

that have been given by management.
ii. To allow management to delegate authority and responsibility to individual who
hold responsibility position in the organization.
iii. To avoid surplus labour and careless managerial expansion planning.
iv. To allow management to develop and improve the job activities according to their
relationship and to ensure that such activities are performed in an effective turn.
v. To allow management to develop organizational relationship so that it can be able to
coordinate the efforts of the employees at different levels in the organizations. All
these enhance by the functions.
a.Closer control
b. Improves communication system
c.It reduces error commonly made by management
d. It leads to staff improvement in solution, training and promotion.
e.It brings cost reduction
Most organization set objectives for some of the following reasons: Profitability
market standing and position, resources required, innovation and development, employee
performance an attitude to the organization. This century managers have been seeking
answers to basic practical questions such as how to increase the efficiency and productivity of
the increasing workforce.

This led to extensive body of knowledge concerning plan design, job design, work
method and aspect of management workers, while at about the same, many small companies
were increasing to higher organization. However, the individual who manage those
organizations recognizes that management of organization is /were quite different from
managing work. These people began to study the problem of managing large and complex
organization. It was this period that planning, organizational controlling were identified as the
function that compromised the management process.

4
2.1.0 Needs and Importance of Planning in Business Organization

For survival and growth in competitive environments, organizations have to be able to predict
the future business conditions and opportunities in order to take advantage of them. Without
planning, the organization may not be able to survive and grow on the long run.

(a) Planning Minimizes and Reduces the Risk of Uncertainties: In today’s highly complex
environment, managers face many uncertainties and unexpected situations every day. While
Planning, managers try to foresee the future and make some assumptions regarding the future
keeping in mind their past experiences and scanning of business environments. It provides a
more rational, fact based procedure for making decisions, planning allows managers or
organizations to minimize risk and
uncertainty.

(b) Formulating Objectives Of The Company: Setting organizational goals, policies,

procedures, methods and rules, etc. are the first step in planning process. When employees
follow the plan they are leading towards the achievement of objectives. Planning helps the
organization to focus all its activities and resources on selected goals.

(c) Attains And Leads To Success Towards Goals:

Planning helps the organization to perform better and achieve their goals successfully.
Organizations that plan have a higher probability to succeed than those which do not plan.

(d) Enable Managers Face Global Competition: Today, a business concern has to face
competition not only in the domestic market but also in the international markets. To face
such fierce competition, proper planning in all functional areas is a must.
(e) Manage Technological Changes: Technology is changing rapidly and the existing
machines and processes are becoming obsolete at a fast rate. With proper planning, it is
possible to keep pace with technological changes to the advantage of the organization.

5
(f) Planning Facilitates Control: Controlling means comparison between planned and actual
output and if there is variation between both then find out the reasons for such deviations and
take measures to match the actual output with the planned.
(g) Planning Provides Sense Of Direction And Focus: It provides the directions and focus
on defined goals to the employees, this reduce wasteful activities. Planning makes clear what
employees have to do, how to do, etc. By stating in advance how work has to be done,
planning provides direction and focus on action. Members of organizations know in advance
in which direction they have to work, this leads to unity of direction.
(h) Planning Support Decision Making: Planning helps the managers to take various
decisions. In planning, goals are set in advance and predictions are made for future. These
predictions and goals help the manager to take fast decisions which promotes innovative
ideas.

Elements Of Planning
According to Sharman (2019) Planning as a managerial process constitute some elements or
components: they include:

Objectives are the goals towards which all managerial activities are aimed at. All planning
work must spell out in clear terms the objectives to be realized from the proposed business
activities.

Forecasting is the analysis and interpretation of future in relation to the activities and
working of an enterprise. Business forecasting refers to analyzing the statistical data and
other economic, political and market information for the purpose of reducing the risks
involved in making business decisions and long range plans.
Policies are laid down principles that guide and direct managers at various levels in making
decisions
Procedures are policies that provide guidelines to thinking and action, they are definite and
specific steps to thinking and action
Rules specify necessary course of action in a particular situation. It acts as a guide, rules
prescribe a definite and rigid course of action to be followed in different business activities
without any scope for deviation or discretion.

6
Programmes are precise plans of action followed in proper sequence in accordance with the
objectives, policies and procedures. Thus, it leads to a concrete course of inter-related actions
for the accomplishment of a purpose.

Budgets are estimates of men, money, materials and equipment in numerical terms required
for implementation of plans and programmes.

Project is a single-use plan which is a part of a general programme. It is part of the job that
needs to be done in connection with the general programme.
Strategies are the devices formulated and adopted from the competitive standpoint as well as
from the point of view of the employees, customers, suppliers and government.)

2.1.1 The Planning Process (Steps In Planning)

Source: Researcher opinion

(a) Being Aware Of Opportunities

7
The manager must first identify the opportunity that calls for planning and action in the
external environment. It is the starting point in planning process because it leads to
formulation of plans in line with the company’s strengths and weaknesses.
(b) Establishing Objectives
The next step in the planning process lies in the setting up of objectives to be achieved by the
enterprise in the clearest possible terms for the long term as well as in the short range.
Objectives specify the results expected in measurable terms and indicate the end points of
what is to be done; where the primary emphasis is to be placed, and what is to be
accomplished by various types of plans by the network of strategies, policies, procedures,
rules, budgets, and programmes.

(c) Developing and Building the Planning Premises

This involves collection of facts and figures necessary for planning the future course of the
enterprise. ‘Planning Premises’ are planning assumptions about the environment in which
plan is to be carried out Developing planning premises is to establish, circulate, and obtain
agreement to utilize critical planning premises such as forecasts, applicable basic policies and
existing company plans.
(d) Determining Alternative Courses of Action.
The next step in planning is to search and examine various alternative courses of action based
on organizational objectives and planning premises. A particular objective can be achieved
through various actions. For example, if an organization has set its objective to grow further,
it can be achieved in several ways like expanding the field of business or product line, joining
with other organizations, or taking over another organization, and so on.
(e) Evaluating Alternative Courses of Action.
The next step is to evaluate the alternative by weighing them in the light of premises and
goals. Alternative courses of action can be evaluated against the criteria of cost, risks, benefit
and organizational facilities. The strong and weak points of every alternative should be
analyzed carefully.
Since there are so many complex variables connected with each goal and each possible plan,
the process of comparative evaluation is extremely difficult. For example, one alternative
may be the most profitable but requires heavy investment; another may be less profitable but
also involves less risk.

(f) Selecting a Course of Action

8
After the evaluation of various alternatives, this is the point at which the plan is adopted – the
most appropriate one is selected as the plan. Sometimes evaluation shows that more than one
alternative are equally good. In such a case, the manager may choose more than one
alternative at the same time.
There is another reason for choosing more than one alternative, alternative course of action
may be required to be undertaken in future in changed situations. So, the planner must also be
ready with alternative—normally known as contingency plan—
that can help coping up with the changed situation.

(g) Formulating Supporting Plans

When a decision is made, planning is seldom complete. Formulating of supporting plans such
as plans to buy equipment, materials, hire and train workers and the development of a new
product, etc., are given prominence in planning.

(h) Numbering Plans by Budgeting

After decisions are made and plans are set, the final step in giving them meaning is to number
them by converting them into budgets. The overall budget of an enterprise represent the sum
total of income and expenses, with resultant profit or surplus, and the budgets of major
balance sheet items such as cash and capital expenditures. Each department or programme of
a business or some other enterprise can have its own budgets, usually of overall budget. If
done well, budgets become a means of adding together the various plans and also set
important standards against which planning progress can be measured.
(i) Implementation
This concerns the allocation of tasks, objective driven action and collection of feedback data.
Without this step, the previous steps are pointless. Implementation is the deployment of
resources to put a plan into action. The manager must implement plans through others,
motivating them to carry out the plan, rewarding them for successful performance and
redirecting them when their actions lead to outcomes that differ from the objectives.

2.1.2 Policy Formulation And Organizational Objectives

Every organization aims to survive and grow in a competitive environment. To do so, it must
respond and adjust to the social, economic and political environmental changes that occur.

9
The environments of public organizations according to (Bryson, 2019) have become not only
increasingly uncertain in recent years but also more tightly interconnected; thus changes
anywhere in the system reverberate unpredictably, and often chaotically and dangerously
throughout the environment. This increased uncertainty and interconnectedness requires a
response from public organizations. First, these organizations must think strategically as
never before. Second, they must translate their insights into effective strategies to cope with
their changing circumstances and lastly, they must develop the rationale necessary to lay the
ground work for the adoption and implementation of their strategies.

For planning to be effective and useful, there must be commitment and involvement across
all levels of the organization, overcome inherent problems such as; rivalry among
departments, projects, resistance to change, resource requirement, resources allocation and so
on. The policy initiatives and directions set up by firm management in the form of mission
and vision statements and targets for cost saving, debt/equity ratios embodied as argued by
Grant (2019) “a framework of constraints and objectives that bounded and directed strategic
choices.” policy formulation has been embraced by business enterprises, the public and
private sectors as an important avenue that can be utilized to lead effective organization
performance. Policy formulation is the first phase in strategic management process and sets
the basis for the other phases (Policy implementation, evaluation and control). (Steiner, 2019)
argues that planning system provides the framework for formulating and implementing
strategies. However, it is argued that for planning to translate into results, a facilitative
internal environment and culture must be present. Ansoff (2019) notes that environment is
constantly changing, and so it makes it imperative for organizations to continuously adapt
their activities in order to succeed. Planning introduces changes that sometimes encounter
organizational resistance. Thompson and Strickland (2019) add that galvanizing organization-
wide commitment to the chosen plan is critical for effective performance.

There is always a need for policy making in an organization due to the change in the
administrative head. The integration brings about framing of policies to guide managerial
action. Policymaking became the prime responsibility for effective management system. The
implementation phase in strategic management process consists of a set of activities by which
the top management assures that the strategic choice is communicated and related to both the
organization and its people.  This is to say that implementation encompasses the activity of
developing the organizational structure and climate best suited for the implementation of the

10
chosen or adopted policy. This task is therefore important in the life of any organization
wishing to survive and to grow cannot be over-emphasized considering the dynamic nature of
the world we are in today.  However, for management system to effectively carry out this task
of achieving their corporate objectives, the management must aim itself with the tools of
policy formulation and implementation to enable it to adjust to the environment changes
surrounding them.

2.1.3 Planning procedures and organizational objectives

According to Bryson, (2019) planning procedures in an organization are as follows;

1. Setting objectives: – objectives are the main part of plan. Setting objectives is the first
step of formulating plans, the success or failure of plan depends upon the objectives of the
organization. To determine the objectives is the first step and most important procedure of
making plan.

2. Developing planning premises: – after setting the objectives of the organization planning
premises is necessary. It is the second step of formulating plans. Premises are the
assumptions of internal and external environment of the organization in which plans are to be
implemented. It is related to collect and make analysis of information concerning internal and
external environment.

3. Determining alternatives: – after developing planning premises the third step of

formulating plan is to determine the alternatives. The process of searching and identifying
alternatives is known as determining alternatives. There may be so many alternatives.
Reasonable alternatives should be selected among them.

4. Evaluating alternatives:- after determining alternatives, each and every alternatives must
b evaluated separately. After that, it is determined that which alternative has how much
advantage and disadvantages. In other words, plans are evaluated in so many factors like cost
factors, risk , benefits, facilities etc.

11
5. Choosing one course of action: – after evaluating alternatives one best alternative must be
selected. When all the alternatives are evaluated then all the weaknesses and strength of the
alternatives are known. After this, the best alternative must be selected. It is the most
important step of planning.

6. Formulating detail plan of action: – after choosing one course of action, detailed plan
must be formulated. Selecting one course of action is the organized plan. After choosing
organizational plan, other departmental plan must be formulated. In other words, basic plan
must be expanded into functional areas.

7. Implementation of plan:- Without this step, other procedures of plan remains as a paper
work. This step brings all procedures of plan into action.

8. Reviewing the panning process:- the planning procedures is a continuous function up to

the attainment of defined objectives. For this purposed, the evaluation of achievement of
work according to time is necessary to know about actual performance

2.1.3 Planning as a tools for achieving Organizational Objectives

According to Munive-Hernandez, Dewhurst, Pritchard and Barber (2019), planning involves
the plan or pattern of act that adds company main goals, policies and action systems are
unified into a whole. Aldehayyat and Khattab (2019) noted that planning methods empower
managers to convert data into valued decisions and appropriate actions. Sorel and Pennequin
(2018) advocates for planning to involve developing objectives or the organizational plans
and looking for resources that would best be suited in achieving the organizational objectives.
Each goal should have financial and human resource projections associated with its
completion so that it becomes successful. The planning process also creates timelines for
when the plans should be achieved. According to Ballou (2017), planning also involves
developing the tracking and assessment method that will be used to monitor the project
process.
Planning is normally where the direction of the business is made through a multiplicity of
activities comprising the making of goals. As such, the planning function of management
symbolizes numerous points of decision making (Schraeder, etal. 2018). Daft and Marcic
(2019) also identified the third effect of planning on achieving organizational objectives as its
pervasiveness. The entire managers starting from the every superintendent to the utmost
officer who is the Chief Executive Officer (CEO) of a business are supposed to engage in

12
planning. At the lower levels it may be termed as operational planning and whist at the
highest levels it is termed as strategic planning. The time spent in planning in any lever
depends on the level type. The CEOs may be involved more in engaging in activities such as
organizing and planning, whilst head of departments are more involved in areas leading
people, acquiring resources in the respective departments and the control of performance in
the departments. The more efficient the plans are the more they contribute to achieve the
organizational objectives.
According to Awino et al. (2019) positive change is caused by effective planning. The
efficiency of plans must be aligned to add to the aims of the business and to promote the
analyzing and improvement of strategies. Koontz and O'Donnell (2019) particularly viewed
that efficiency feature has to be used not only in monetary terms to numerous resources used
in service and production actions but also to the group and individual gratification of human
resources. Sosiawani, et al., (2018) state that each dimension of planning all contribute to
achieving organizational objectives. Formality of planning has been identified to have
positive relationship with organizational objectives (Glaister, et al., 2018). There is also
positive relationship between employee participation and firms’ performance. It is believed
that employee’s participation effect on planning contributes to the effectiveness and the
development of strategy which in return, leads to better effectiveness in the implementation.
Employees contribute in planning by giving their suggestion and test-driving the different
strategies so as to get the best fit in terms of strategies that an organization can adopt,
resulting in increased performance (Collier, Fishwick and Floyd, 2018). Whenever
employees participate in crafting the plan development of for a business, their motivation and
attachment to the project is high thus making them more effective while running the project.

Veettil (2018) showed that by applying planning correctly, would be able to contribute to
companies achieving organizational objectives. Consequently, creating assignments with
timelines considering the ability of individual employees in the completion of the task time
horizon is also considered as the key element of planning which is capable to help achieve
organizational objectives.
Mitchelmore and Rowley (2019) through their study, assert that businesses need to lengthen
their time horizon of planning for them to achieve organizational objectives. Since enough
time allocated time will allow employees to work efficiently without the pressure that time is
running out on them, this means that their performance would be greatly improved. There are
various implementation strategies that management in different organizations can adopt. The
13
strategies may adopt a top-down approach where the policies and plans are developed at the
top and the information trickles down to the bottom where the instructions are carried out.

The implementation approach may also be bottom-up or hybrid depending on the

organization structure and their internal systems of handling firm’s assignments (Veettil,
2018).
Wagaki (2018) describes strategic planning as a continuing, never-ending, combined process
demanding unceasing review and improvement. Planning is thus considered and developing,
vigorous and a collaborating process. To build your company to a performing level within the
industry, the business has to strategize and employ the use of planning practices. These are
key characteristics which are vital towards founding and positioning the business strategically
in the market (Kathama, 2019).
Planning makes a business to look into the future and consequently offers an opportunity to
influences way the future, or help in assuming a preemptive position (Kathama, 2019). It
offers improved attentiveness to needs and the facilitation of related issues in the
environment. This aids in defining the general mission of the business and emphases on the
objectives, providing a sense of continuity, direction which leads to effective leadership and
staffing , connecting everybody into the structure and offers standards of liability for
individuals, allocated resources and programs. It is the key to assisting stake holders jointly
and supportively to gain control of the future and the purpose of the business (O’Regan and
Ghobadian, 2018). Akinyele and Fasogbon (2018) recommend that planning entails a set of
fundamental procedures that are envisioned to make or manipulate a situation to create more
favorable outcomes for a company. This is quite different from traditional planning that is
extra defensive based and be contingent on the move of competition to initiate the business's
move. In business, planning offers complete direction for specific units such as human
resources, projects, financial focuses and marketing. Planning may be favorable to
productivity enhancement when there is agreement around mission and when most work
actions are contingent on technological or technical contemplations.

Planning offers a simple direction and rationale which is formative to the focus of a business;
and also offers the requirement against which any business may choose what to do and on
how to do it. Basically put, it is a process for making and telling a better future in measurable
terms and the selection of the best means to achieve the outcomes anticipated. It is said that
failure to plan leads to planning to fail. Thus, Abdalkrim (2019) summarized the importance

14
of planning as being: Increase of effectiveness; development of sustainable competitive
position developing a decent fit between the internal capabilities and external environment
and helping managers to reflect on the future repercussions of the present decisions. Having a
good vision, objective and strategy is no guarantee that the project performance will be good.
Creative planning by the management can help in improving performance outcome of the
project. But on the other side, without a vision, good plan, or strategy the performance of a
project is sure to fail or at best be poor.

2.2 Conceptual Framework

Planning

Organization
Planning procedures
Objectives

Policies formulation

Source: Researcher, 2022

2.3 Empirical Review

Delmar and Shane (2003) examined the relationship between planning and enterprise
development on the basis of 211 Swedish new ventures using questionnaire as a method of data
collection, chi square was used in data analysis and the result of their findings shows that
planning reduces the probability of enterprise dissolution and thus leads the firms towards
success and better performance and increase the probability of survival.

Gibson and Cassar (2005) conducted a study on causal relationships between planning and
performance utilizing a longitudinal database with responses from the same 2,956 businesses
over a four-year period using survey method developed by the Australian Bureau of Statistics
(ABS). Their results confirmed the association between activity of planning and performance and

15
that is also evident in most extant literature. However they cast doubt on the traditional
perception of the causal sequence of those associations.

The study of Owolabi and Makinde (2012) on planning and corporate performance in Eight(8)
departments at Babcock University, Nigeria using questionnaire as a means of data collection
and linear regression as a tool for data analysis revealed that there was a significant positive
correlation between planning and corporate performance. Their study therefore, concluded that
planning is beneficial to organizations in achieving the set goals and recommended that
universities and other corporate organizations should engage in strategic planning in order to
enhance corporate performance.

Gruber (2007) in his study on Planning and planning processes with data collected by means of
questionnaire in Germany with the sample of 348 VC-backed firms using chi-square as indicated
that planning is beneficial, yet planning processes need to be governed by different planning
regimes depending on the type of founding environment. In highly dynamic environments,
entrepreneurs will get most value from planning when they focus on select planning activities
and speed up the planning task. In less dynamic environments they are better of pursuing a
munificent approach to planning.

In Malaysia, Sosiawani (2015) conducted a study on planning and firm performance and
tested dimensions of planning such as formality, tools of planning, employee participation,
strategic implementation, time horizon and control at 41 Malaysian companies.
Questionnaire were used for data collection and linear regression analysis was adopted. The
study found out that planning will assist business firms to uplift its performance and it
concluded that planning have important contributions in achieving a better organizational
objectives. Therefore, the relationship of each dimensions of planning was tested toward
performance of the organization and it is hoped that the findings of the study will help the
organization to understand how planning can help to make better decision in the future.

Karabulut and Efendioglu (2010) in their study on the impact of different components/activities
in a planning process and their impact on company performance, data were collected using
questionnaire using SPSS package with 71 returned responses in Turkey purported that while
observing the, the only two that were correlated (positively influenced) and statistically
significant were “involvement of top management in the process” and “having a mission

16
statement”. Both of these strategic process components identify and define the importance of
the process in the organization and had significant impacts on the profitability of the firms in
their study.

2.4 Theoretical Review

2.4.1 Procedural Planning Theory

The Procedural Planning Theory propounded by Prof. Andreas Faludi which states that the
existence of distinctive type of thought and action without reference to any particular object
which this distinctive form may be associated within the real word. Consequently, the procedural
planning theory is essentially ‘contentless’ in that it specifies thinking and acting procedures but
does not investigate what is the content of these. The bearing on which procedural planning
spins was developed between mid 1960's and 1970's. There has been a tendency to conflate
systems and rational planning into a broad category of Procedural Planning Theory (PPT)
(Allmendinger, 2002). Notably, there are some broad overlaps between the systems and
rational theories of planning as also posited by Allmendinger (2002). Like the rational
theories of planning the systems approach is concerned with the generation and evaluation of
alternatives prior to making a choice (Faludi, 2018) in Allmendinger (2017). It is imperative
to note that while both theories were seemingly overlapping, they were distinct in critical
aspects. Now, according to Faludi, (2018), rational planning makes the crucial distinction
between the formal (means) and susbstantive (ends) that systems planning fails to do. Hence,
the Procedural Planning Theory is the classifying name given to both systems and rational
planning approaches. The premise for the Procedural Planning Theory has been laid and is
thus now safe to deduce and posit that the PPT has adopted and advanced the views, ideas
and intricacies of the systems of rational planning theories of planning. If it is that the PPT is
a conflate of both approaches; the definition of procedure denotes that a procedure is a series
of actions done in a certain way then it means that with those embedded principles of both
approaches, procedural planning is concerned with how things are done and the pattern (s) in
which they are done or should be done. Thus, what lies at the heart of Procedural Planning as
the definition declares is how things are done and how the planning process and the practice
of planning itself should be done.

A system is understood as a complex whole, a set of connected things or parts and a group
of objects related to or interacting so as to form a unity. In systems planning, cities, towns,
regions and so on are seen as comprised of different but related components of cities, and

17
towns in the context of Regional Planning. By extension, if procedural planning shares the
principles of the aforementioned approaches it also means that procedural planning seeks to
delineate how certain procedures or courses of actions should be done or carried out in the
planning practice. In essence, procedural planning deals with how things are done. Since it is
a conflate with the systems approach then it means that the courses of actions which define
procedural planning should follow a certain pattern, order or fashion. Those procedures or
"things" to be done in stages or steps and with rationalism those procedures should follow a
logical sequence and ones which guide the courses of actions taken in procedural planning.
Knowledge is not sufficient for making plans. Rather it must be applied to some purpose, and
there must be organizations and procedures for the coordination and implementation ( Faludi,
2018). Since procedural planning is concerned with how a particular course of actions are
done, here are some of the inter-related steps which are involved in procedural planning:

 Identification of needs;
 Specification of goals and objectives;
 development of alternative means to attain each goal;
 estimation of the cost of each alternative and
 selection of the most promising alternative (s) (Cayer and Weshcler, 2018).

2.4.2 Normative Planning theory

The normative theory of planning stipulates how the world ought to be and provides ideas
about how to achieve this state (Allmendinger, 2002). Traditionally these could be regarded
as theories of planning and could, for example, include Marxist, New Right, and
communicative or collaborative planning approaches ( Allmendinger, 2002)."... Normative
theory is concerned with how planners ought to proceed rationally. Behavioural approaches
focus more on the limitations which they are up against in trying to fulfill their programme or
rational action." (Faludi, 2019 )"British post war planning was driven by a disticnt set of 
Values which, when generalized, amounted to a normative theory of what constituted the
ideal physical environment

2.4.3 Substantive theory

The substantive theory (theory of planning) seeks to explain the essence of teleological
action and to give a better understanding of planning itself. It also helps planners to identify
the interpretation (belief/paradigm/theory) that is most easily compatible with their views,

18
most suitable for the object of planning and is – at the same time – capable of increasing
awareness and strengthening planners’ commitment. Theories of planning tend to be
influenced by philosophy, while theories in planning are more exposed to the impact of
sociology. The basic cases of (substantial) planning theories seek to answer the general,
fundamental questions of planning, like ‘Should we, or can we make plans in the given
situation?’ or ‘What kind of rationality can replace the missing methodology of
transcending?’ The answers provided by social philosophy serve as a guideline for planners
in solving their own dilemmas. The various approaches in planning theory draw on different
philosophies or paradigms, their formation being primarily influenced by the development of
social philosophy, and determined by the ‘Zeitgeist’, i.e. the social con-text in the broad sense
of the term. These issues should be the concern of planning philosophy in the first place.
Every theory of planning is embedded in a normative, historical and social context at the
same time. The planner cannot consider himself well prepared for all kinds of planning
situation without being familiar with several theories, including the recommendations for
their application or their potential ‘side effects’.

2.5 Theoretical Framework

Procedural Planning Theory

The Procedural Planning Theory, the bearing on which procedural planning spins was
developed between mid 1960's and 1970's. According to Taylor, there has been a tendency to
conflate systems and rational planning into a broad category of Procedural Planning Theory
(PPT) (Allmendinger, 2002). Notably, there are some broad overlaps between the systems
and rational theories of planning as also posited by Allmendinger (2002). Like the rational
theories of planning the systems approach is concerned with the generation and evaluation of
alternatives prior to making a choice (Faludi, 2018) in Allmendinger (2002). It is imperative
to note that while both theories were seemingly overlapping, they were distinct in critical
aspects. Now, according to Faludi, (2018), rational planning makes the crucial distinction
between the formal (means) and susbstantive (ends) that systems planning fails to do. Hence,
the Procedural Planning Theory is the classifying name given to both systems and rational
planning approaches. The premise for the Procedural Planning Theory has been laid and is
thus now safe to deduce and posit that the PPT has adopted and advanced the views, ideas
and intricacies of the systems of rational planning theories of planning. If it is that the PPT is
a conflate of both approaches; the definition of procedure denotes that a procedure is a series
of actions done in a certain way then it means that with those embedded principles of both

19
approaches, procedural planning is concerned with how things are done and the pattern (s) in
which they are done or should be done.
Therefore, procedural planning theory is hereby adopted for the study because it tells us how
things are done and how the planning process and the practice of planning itself should be
done.

20