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Planning

P.S.Swathi
Associate Professor
Definition of Planning
Planning: involves selecting missions and
objectives and the actions to achieve them; it
requires decision making, that is, choosing from
among alternative future courses of action
1. Lyndall F Urwick: Planning is fundamentally a
mental predisposition to do things in an orderly
way, to think before acting, and to act in light of
facts rather than of guesses.
2. Bill E Goetz: Planning is fundamentally the
choosing function and planning problem arises
only when alternative course of action is
discovered.
1. Koontz and ODonnell: Planning is decision in
advance about what to do, why to do, when to do,
where to do, how to do, and who is to do it.
Planning bridges the gap from where we are to
where we want to go.
Hence, we can define the term as: Planning is a
function of management that determines what
should be done before we act. It includes selecting
of objectives, policies, procedures, strategies and
programmes for the enterprise, and arranging
means for achieving these objectives.
External Planning
Premises Internal
1. Political stability Planning
2. Government Premises
policies Resource
3. Government Types of abilities
approach toward Planning 1. Basic policies,
business Premise procedures,
s etc.
4. Demographic
factors 2. Organisational

Planning Premises
5. Socio-cultural
changes
structure
3. Sales
Planning is based
6. Inflation- price on premises. Planning premises are planning
forecasting
rise
conditions under which planning activities4.can
Capital
be undertaken.
7. premise can also be called planning investment,
Technological
Planning assumption. etc
They
factors
refer to the estimates or projections of the future occurrence of
8. Demand
events.
forecasting
9. Natural
calamities 4
Types of Plans
Plans can be classified as
(1) Mission or purposes,
(2) Objectives or goals,
(3) Strategies,
(4) Policies,
(5) Procedures,
(6) Rules,
(7) Programs, and
(8) Budgets
Components/Types of
Plan
Types of plan are also referred to Objectives,
as elements, parts, or
strategies,
policies, rules,
components of plan. Each component is anandindividual
plan. They jointly constitute theprocedures
broad plan.are multi-use
They can
also be called sub-plans. plans while programmes,
budgets, schedules,
Plans may be standing plans (used repeatedly;) also
projects, methods, etc., are
known as multi-use plans. May single
be ad use
hoc plans (used
only for once), also known as single-use
plans. plans.

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Types of Plans
The Mission, or Purpose, identifies the basic
purpose or function or tasks of an enterprise or
agency or any part of it
Objectives, or goals, are the ends toward which
activity is aimed
Strategy is the determination of the basic long-term
objectives of an enterprise and the adoption of
courses of action and allocation of resources
necessary to achieve these goals
Policies are general statements or understandings
that guide or channel thinking in decision making
Procedures are plans that establish a required
method of handling future activities
Types of Plans cont.
Rules spell out specific required actions or
non actions, allowing no discretion
Programs are a complex of goals, policies,
procedures, rules, task assignments, steps to
be taken, resources to be employed, and
other elements necessary to carry out a given
course of action
A budget is a statement of expected results
expressed in numerical terms
Steps in Planning
1. Being Aware of Opportunities
2. Establishing Objectives or Goals
3. Developing Premises
4: Determining Alternative Courses
5. Evaluating Alternative Courses
6. Selecting a Course
7. Formulating Derivative Plans
8. Quantifying Plans by Budgeting
Steps in Planning Process
The Nature of Objectives
Hierarchy of Objectives
Key Results Areas: Areas in which
performance is essential for success
Setting objectives and the organizational
hierarchy
Multiplicity of objectives

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Verifiable Objectives
Objectives are the important ends toward
which organizational and individual activities
are directed
An objective is verifiable when at the end of
the period one can determine whether or not
the objective has been achieved
How to Set Objectives
Organizational Ideologies
Certain aspects of an organization's philosophy may be so
dominant that they become the hallmark of that
organization and place constraints on other areas or forms
of activities. An example is the high quality standard of
Marks & Spencers merchandise and their explicit policy of
buying primarily from United kingdom sources.
In the case of the Walt Disney Company, quality service is
embedded deeply within its corporate culture. The
overriding byword of The Body Shop is honesty and this
underlies their policy of: We WILL be the most honest
cosmetic company. As another example, the highest-
quality hallmark of Rolls-Royce cars would presumably
prevent entry into the cheaper mass-production market
How to Set Objectives
Guidelines for setting objectives
Guidelines for setting objectives..cont
Evolving Concepts in
MBO
Management by objectives is a
comprehensive managerial system that
integrates many key managerial activities
in a systematic manner and that is
consciously directed toward the effective
and efficient achievement of organizational
and individual objectives
Evolving Concepts in
MBO
Management by objectives is a
comprehensive managerial system that
integrates many key managerial activities
in a systematic manner and that is
consciously directed toward the effective
and efficient achievement of organizational
and individual objectives

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Systems Approach to
MBO
Benefits of Management by
Objectives
Clear goals:
Motivate
Improve managing through results-
oriented planning
Clarify organizational roles, structures
and the delegation of authority
Encourage personal commitment to
their own and organizational goals.
Facilitate effective controlling,
measuring results, and leading to
corrective actions
Definition of Strategy and
Policies
Strategy is the determination of the
mission (or the fundamental purpose) and
the basic long-term objectives of an
enterprise, and the adoption of courses of
action and allocation of resources
necessary to achieve these aims
Policies are general statements or
understandings that guide managers'
thinking in decision making
The Strategic Planning
Process
The Strategic Planning Process
Inputs to the organization
Industry Analysis
Enterprise Profile
Orientation, Values, and Vision
Mission (Purpose), Major Objectives, and
Strategic Intent
Present and Future External
Environment
Internal Environment

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The Strategic Planning Process -
continued
Development of Alternative Strategies
Evaluation and Choice of Strategies
Medium- and Short-Range Planning
Implementation through Reengineering,
Staffing, Leadership, and Control
Consistency Testing and Contingency Planning
Mission, Objectives, and Strategic
Intent
Mission relates to the kind of business
Objectives are the end points for activities
Strategic intent is the commitment to win in
the competitive environment
Definition of the TOWS
Matrix
The TOWS Matrix is a conceptual framework
for a systematic analysis that facilitates
matching the external threats and
opportunities with the internal weaknesses
and strengths of the organization
TOWS Matrix
TOWS Matrix: 4 Alternative
Strategies
SO strategy: Maxi Maxi
WO strategy: Mini Maxi
ST strategy: Maxi Mini
WT strategy: Mini - Mini
Business Portfolio
Matrix

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Business Portfolio
Matrix
Two dimensions
Relative competitive position (market share)
Business growth rate
Four positions
Question marks
Stars
Cash cows
Dogs
Major Kinds of Strategies and
Policies
Products or Services
What are some of the key questions to ask?
Marketing
What are some of the key questions to ask?
HIERARCHY OF COMPANY STRATEGIES

The corporate-level strategy. Executives


craft the overall strategy for a diversified
company
Business strategies are developed usually
by the general manager of a business unit
Functional strategies. The aim is to support
the business and corporate strategies.
Five Forces in Industry Analysis
(Porter)
The competition among companies
The threat of new companies entering the
market
The possibility of using substitute products or
services
The bargaining power of suppliers
The bargaining power of the buyers or
customers
Porters Generic
Strategies
Overall Cost Leadership Strategy
Differentiation Strategy
Focused Strategy (low cost or differentiation)
Premising and
Forecasting
Planning premises are the anticipated
environments in which plans are expected
to operate
Environmental Forecasting
Values and areas of forecasting
Forecasting with the Delphi technique
What are the typical steps of the
technique?