Management Challenges for the 21st Century
Chapter 5: Meeting Challenges in Public Utility Planning
5. Meeting challenges in utility planning Planning in public utilities is carried on at two separate but related levels and for diﬀerent purposes. Both types of plans are necessary for achieving organization objectives. The most comprehensive level of planning is strategic planning. The purpose of strategic planning is to provide the organization with long-term direction for achieving its fundamental objectives. The second, but typically more speciﬁc level, is operational planning. The purpose of operational planning is to eﬀectively and eﬃciently allocate scare resources for carrying out the work of the organization. Strategic plans usually extend over several years – typically from three to ﬁve years. Organizational plans usually cover a one-year period. Upper-level management is responsible for strategic planning – usually under the direction of the chief executive oﬃcer and other top oﬃcers. Managers and supervisors are responsible for operational planning, sometimes assisted by professional planning staﬀ (Lewis et al. 2001). Strategic planning has three main purposes: The ﬁrst purpose is to establish the speciﬁc markets and environments in which the organization will compete. The second purpose of the strategic plan is establishing the position that the ﬁrm wants to hold at some time in the future – its long-term objectives. The third purpose is to identify how the ﬁrm proposes to reach its long-term objectives. The how purpose is expressed as the strategies the organization will follow. For example, strategic options that a public utility might take include choosing to either do its own meter-reading,...
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