PLANNING

What does a manager do?

Plans Organise Motivates Communicates Directs and co-ordinates Controls

The Functions of Management

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Managers

Planning activities to achieve the organization's objectives

Organizing resources and activities to achieve the organizations objectives

Staffing the organization with qualified people

Directing employees activities toward achievement of objectives

Controlling the organizations activities to keep it on course

Planning Defined

A systematic process of reaching a desired state by establishing goals and formulating strategies to achieve them. Planning involves selecting missions and objectives and the actions to achieve them. Planning precedes any other managerial function Plans need to be made utilizing the least of the resources. Planning is required in each and every job

Planning

Planning involves selecting objectives or goals and the course of actions to achieve them:

Provides the bridge to take us from where we are to where we want to go; Is a rational approach to achieving preselected objectives - based on innovation, knowledge and purpose; Decision making in choosing the best from alternative courses of action and is integral to planning;

Plans as foundation of Management

What kind of resources needed? What kind of people & org. structure to have? How to lead them to reach planned goals? How to control in case of deviation from plan ?

Plans

The primacy of Planning

Steps in Planning
Being aware of challenges
Market, Customers wants, Competition, Own strengths & weakness

Setting Goals/ Objectives

What to accomplish & when

Planning premises

Identifying alternatives

Internal & external Environment/conditions

Budgeting (Numberizing Plans) e.g., Sales budget Operational Expense budget, Capital expenditure budget

Comparing & choosing an alternative e.g., plan to buy Decision Equipment, recruit & train making Employees, develop product etc

Formulating Supporting plans

How does a manager Plan?

Establish objectives Determining planning premises Develop Strategies Establish policies Coordinate throughout the planning

Develop program for accomplishments

Develop preventive &/or contingent action Identify potential problems

Establish schedules and budgets

Establish procedures

Features/Characteristics of Planning:

Planning is goal-oriented. Planning is looking ahead. Planning is an intellectual process. Planning involves choice & decision making.. Planning is the primary function of management / Primacy of Planning. Planning is a Continuous Process. Planning is needed by all. Planning is designed for efficiency. Planning is Flexible. Basic to all managerial functions.

Types of Plan

A plan is a specific action proposed to help the organization achieve its objectives.
There are different types of plan. Some of the important types are given and discussed below.

Strategic Plans
Strategic plans are detailed action steps mapped out to reach strategic goals.

Strategic plans address the broad issues such as changing conditions, allocation of resources, international competition, etc.
Generally such goals are developed by top management after consulting board of director and middle management. The time horizon of strategic goals exceeds 3 to 5 years. .

Tactical Plans These are important to the success of strategic plans and cover intermediate time horizon usually encompassing 1 to 3 years. Such plans are developed by middle managers after consulting lower-level managers. Tactical plans are more specific and concrete than strategic plans. Operational Plans Such plans clearly specify the things needed to be done in the short run, in order to achieve the operational goals. These plans are developed by lower-level managers after consulting the middle managers.

The time period of operational plans is less than one year, such as few months, weeks or even days.
The success of strategic and tactical plans depends upon the achievement of operational goals.

Types of Plans
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Operational Plans

Specify actions to achieve tactical plans (very short-term) Designed to implement strategic objectives (usually one year or less) Establish long-range objectives

Tactical Plans

Strategic Plans

Specific Plans Specific plans require clarity and a sense of predictability that often do not exist therefore they are not preferable. Directional Plans Directional plans refer to the flexible plans that set out general guidelines. Such plans are preferable in dynamic environment where management must be flexible in order to respond to unexpected changes. Managers use the directional plans to remain focused and do not lock themselves into specific goals or course of action.

Single-use Plan Single-use plan is one-time plan specifically designed to achieve particular goal that, once achieved, will most likely not recur in the future. Such plan is developed to meet the needs of a unique situation. a. Program A single use plan aimed at carrying out a special project in an organization that if accomplished will contribute to the long term success of organization. Programs are composed of several different projects and may take more than 1 year to complete. b. Project A project is a plan that organizes a set of limited-scope activities that do not need to be divided into several major parts in order to reach a significant nonrecurring goal.

Standing Plans Standing plans are ongoing plans that aimed at providing guidance for performing recurring activities. There are three important types of standing plans which are: policies, procedures, and rules. a. Policy Policy is guideline that establishes parameters for making decisions. It specifies the broad limits with in which organizational members are expected to operate. So it means that policy does not mention the specific action but provides a parameter for action. b. Procedures Procedure is a series of related actions that must be taken to accomplish a particular task. Policy does not allow much flexibility or deviation because they provide detailed step-by-step instructions as to what should be done. In this way procedures outline more specific actions than policies do. c. Rules An explicit statement that tells managers what they can or cannot do. Rules do not allow any room for interpretation because it clearly specifies the actions needed to be done in a particular situation

Types of Plans

Mission / Purpose
The

basic function or reason for existence of an enterprise/ organization

Case in point: Mission of Indira Institute

To train our students to become the best business minds and entrepreneurs today, who will lead their companies successfully into the future tomorrow , locally, nationally and globally.

Type of Plans (Contd)

Objectives/ Goals
The

end towards which activity of an organization is aimed, e.g.

For a Business enterprise profit, surplus creation; For a Management Institute: The number of employable/useful trainees;

Strategies
Determination

of the long term objectives and adoption of a course of action Gives a frame work for linked action-plans, communicated systematically to guide thinking and actions.

Types of Plans (contd)

Policies
Plans

that are general directional statements (or understandings) that guide/help in decision making:
Repeat decisions taken reflexively; Delegation of tasks without loss of control.

Some

discretion is permissible depending on circumstances thus encouraging initiative within limits and situational adjustments; Issues with Policy

Seldom documented in writing Subject to interpretations

Types of Plans (contd)

Procedures
Plans

that are chronological sequences of required actions: task-oriented in nature; Cuts across department boundaries (subsystems) in an organization: e.g. customer complaint handling procedure; Procedures and policies are inter related: e.g. authorization for paid leave

Policy governs quota, responsible authority etc. Procedure governs application, grant and record-keeping.

Rules
Specific

actions or non-actions allowing no discretion

Caution: rules (and procedures too) limit initiative!

Types of Plans (contd)

Programs
Action

plans (mainly non-routine or for changed activities) including, task assignments, steps to be taken, resources to be deployed etc. to achieve a (new/renewed) goal;
Primary program may require supporting programs, spreading across the enterprise; Perfect coordination between supporting & primary programs essential to avoid delays, unnecessary costs and expected roll-out.

Programs

are a complex of (sub)goals, policies, rules and other elements necessary for the course of action e.g. obtaining ISO certification.

Types of Plans (contd)

Budgets
A

statement of expected results expressed in Numerical terms e.g. financial operating budget = profit plan; Budgets enforce precision in thinking:

Making a budget is planning by itself; Encourages innovation a different way to work

Budgets

serve for Control:

Enforces discipline in execution of plans; Instills cost consciousness; Makes people (constantly) plan!

Advantages of Planning

Better coordination
More efficient control of operation Easier delegation More economical use Better decision making

Barriers in effective Planning

1. Difficulty of accurate premising 2. Problem of rapid change 3. Internal Inflexibilities Psychological Inflexibilities Policy & Procedural Inflexibilities Capital investment 4.External Inflexibilities
Political climate Trade union Technological Change

5. Time & cost Factor