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Contents
Planning
Meaning
Importance
Elements
Process
Limitations
Decision Making
Meaning
Importance
Process
Techniques
Planning
Planning is deciding in advance what to do, how to do it,
when to do it and who to do it.
It involves anticipating the future and consciously
choosing the future course of action
It is the first and foremost important function of
management
According to Haimann, ‘Planning is the function that
determines in advance what should be done’
Nature of Planning
Planning is beginning of the process of management
It’s a mental exercise
Planning is goal-oriented
Planning is all-pervasive
Planning is a continuous process
Planning is future oriented
Planning involves choice/decision making
Planning is directed toward efficiency
Planning should be flexible
Importance of Planning
Minimizes risk and uncertainty
Improves efficiency & effectiveness
Facilitates decision making
Motivates employees
Leads to success through smooth working of other
functions
Focuses attention on the Organization’s goals
Facilitates control & co-ordination
Trains executives
Analyzing the environment – internal & external
Fixing the objectives
Making alternative plans
Evaluating each alternative based on available resources
Selecting the best
Preparing blueprint
Arranging sequence of activities
Implementation
Follow up
Limitations of Planning
1. Time consuming
2. Costly
3. Rigidity
4. Unrealistic (SMART)
5. Resistance to change
6. Paper work
7. Dangers of Over / Under Targets
8. Lack of co-ordination
Essentials/Features of Sound Planning
1. Simplicity
2. Flexible
3. Suitable
4. Acceptable
5. Facilitates control and co-ordination
6. Provides direction
Types of Plans
Vision
Mission
Objectives
Strategies
Operational Plans
Single Use Plan
Standing Plans
Types of Plans
Vision: The dream an entrepreneur creates about the
direction that his business should pursue in future. It
describes aspirations and beliefs & values
Mission: It is the unique aim of the organization which
sets it apart from other competitors
Objectives: They are the goals or aims that management
wishes the organization to achieve in order to achieve its
mission
Strategy: The plan of action designed to achieve a long-
term objectives
Operational Plans: This plan is the way of implementing
strategies. This provides details of how strategies would
be accomplished
Standing Plan: These plans are designed for situations
that are regular and need a standardized approach. E.g.
Policies, procedures, methods and rules
Single Use Plan: These plans are developed a specific
purpose and would be dissolved post the objective is
achieved. E.g. Budget, Programmes, schedules
Decision Making
Meaning
When managers make decisions they are choosing –
they are deciding what to do on the basis of some
conscious and deliberate logic or judgment
Managers have alternatives available when they
make a decision
Managers have purpose in mind when they take
decision
Decision Making Process
Recognizing Problems
Deciding Priorities
Diagnosing the problem
Developing alternative solutions
Measuring and comparing consequences
Decision implementation
Follow - up
Decision Making Process
1. Recognizing the problem
Deviation from past experience
Deviation from plan
Competitors outperform
Internal data
2. Deciding priorities
Prioritize decisions
Delegating decision making to subordinates and superiors
3. Diagnosing problems
Managers generally get to know the symptoms
Research done to find out the root problem
Decision Making Process
4. Developing alternative course of action
Alternatives should be developed
Organizational goals and resources should be considered
5. Measuring and comparing consequences
Consequences of all the alternatives should be developed
6. Decision implementation
Implementing decisions
7. Follow – up
Advantages & Disadvantages
1. Time consuming
2. Compromised
1. Better use of resources
decisions
2. Growth
3. Biases
3. Achieve objectives
4. Limited analysis
4. Increase efficiency
5. Uncertain future
5. Facilitate innovation
6. Uncertain external
6. Motivation
factors
7. Subjective decisions
Types of Decisions
Programmed Non - Programmed
Major Minor
Routine Strategic
Individual Group
Simple Complex
Types of Decisions
Programmed Decision
Decisions that are made in accordance with some policy,
rules or procedures
Repetitive and routine decisions
Decisions are guided by same set of rules
Non programmed decisions
Problem has not arisen before
Novel and non repetitive
Personal values, attitudes and judgment comes into
picture
Decision Making Techniques - textbook
Programmed decisions Non-Programmed decisions
Linear programming Brain storming
Decision tree Delphi Technique
Stimulation Nominal group technique
Queuing theory Quality circle
Network technique Heuristic technique
Probability decision theory
Game theory
Payoff Matrix
The numbers on the lines
indicate the distance
between the cities.
To save on fuel and time the
delivery person wants to
take the shortest route.
The delivery person will
calculate different routes for
going to all the 6
destinations and then come
up with the shortest route.
This technique of choosing
the shortest route is called
linear programming.
CPM highlights the Longest path for completing a
task/activity.
PERT evaluated the time taken per route of task/activity.
The nominal group technique is a variation of brainstorming where
individuals come up with ideas on their own rather than as a group.
First, every member of the group gives their view of the solution, with a
short explanation.
Then, duplicate solutions are eliminated from the list of all solutions, and
the members proceed to rank the solutions, 1st, 2nd, 3rd, 4th, and so on.
The numbers each solution receives are totaled, and the solution with
the highest (i.e. most favored) total ranking is selected as the final
decision.
Used best when:
When some group members think better in silence.
When there is concern about some members not participating.
When the group does not easily generate quantities of ideas.
When all or some group members are new to the team.
When the issue is controversial or there is heated conflict.
Heuristic, is any approach to problem solving, learning, or
discovery that employs a practical method not guaranteed to
be optimal or perfect, but sufficient for the immediate goals.
Where finding an optimal solution is impossible or
impractical, heuristic methods can be used to speed up the
process of finding a satisfactory solution.
Heuristics can be mental shortcuts that ease the cognitive
load of making a decision.
Examples of this method include using a rule of thumb,
an educated guess, an intuitive judgment, guesstimate,
stereotyping, profiling, or common sense.