FUNDAMENTAL OF MANAGEMENT

MGT 162
Chapter 2
Planning
 2.1 Definition of Planning
• Planning is the process of setting goals and defining
the action necessary to achieve those goals.
• Or process that involves defining the organization
objectives or goals , establishing an overall strategy
for achieving those goals and developing a
comprehensive hierarchy of plan to integrate and
coordinate activities.
• A plan is a blueprint for action that prescribes the
activities necessary for the organization to realize its
goals.
 2.2 The importance of planning
• Planning helps to determines what opportunities
there are to exploit
• Planning enables us to identify the course of action
by setting objectives and choosing alternatives that
will be most profitable.
• Reduce the impact of change and risk
• Resources are utilized efficiently and effectively
• Better coordination
• Focus on forward thinking
• Participatory work environment more effective
control system
• Planning can point out the need for future changes.
 2.3 The Planning Process

a. Establish a goal or set of goals

b. Define the present situation
c. Identify aids and barriers
d. Develop a course to action
 2.4 Objectives
• Definition of organizational objectives
- Organizational objectives are that
targets towards which the open
management system in directed.
- its reflect the results the organization wants
to attain.
- Objective are the prime parts of the plan and
are vital to an organization because all the
efforts and activities are focused on these
objectives.
 The importance of organizational objectives

a. Guide for decision making

b. Guide for organizational efficiency
c. Guide for organizational consistency
d. Guide for performance evaluation.

Types of organizational Objectives

- Organizational Objectives
- Individual Objectives
 2.5 Strategic Planning
• Strategic Planning is the process by which an
organization makes decision and takes action that
affects its long run performance.
-Is long range planning that focuses on the
organization as a whole.Long range is usually defined
as period of time extending about 3 to 5 years into
the future.
Strategy is defined as abroad and general plan
developed to reach long range objectives
 Mission Statement

• Organizational mission statement is a

statement of the overall purpose of the
organization that provides strategic direction
to the member of an organization and keeps
them focused on common goals.
• Enduring statement of purpose that
distinguish one business from others similar
firms.its also identifies the scope of a firm
operation in products and market terms.
 Developing Mission Statement
• A mission statement is a written document
developed by management, based on input by
manager as well as non-managers ,that describe and
explain the organization’s mission.
• Expressed in writing form to ensure that all
organization members will have easy access to it and
thoroughly understand exactly what the organization
is trying to accomplish.
• 3 primary aspect in mission statement.
- Its primary products and services
- Its primary target market
- Its overall strategy for ensuring long
term success.
The importance of mission statement
• Its helps management increase the probability to
succeed by;
- Helping management focus human effort in
a common direction
- Allocating resources
- Defining broad but important job areas
within an organization.
Relationship Between Mission and Objective
Useful organization objective must reflect and
how naturally from an organization mission that,
in turn, was designed to reflect and flow from the
results of an environmental analysis.
 Level of strategic Planning
• Strategic planning occurs at 3 primary levels
within the organization;

a. Corporate strategic planning

b. Business strategic planning
c. Functional strategic planning
 2.6 TYPES OF ORGANIZATIONAL
PLAN /OPERATIONAL PLAN.
• Standing Plan are designed to deals with
organizational issues or problem that recur
frequently.
• Also ongoing plans that provide guidance for
activities repeatedly performed in the
organization.
- Policies-is stated guideline for decision making or
guideline for how task should be completed.
- Procedures- is detailed guideline for handling
organizational actions that occurs regularly or steps
necessary to implement a policy.
- Rules – refers statement or directive that must
be adhered to in a given situation.
 Cont…
• Single Use Plan
- Single use plan are develop to address a specific
organizational situation.one time plan that is specifically
designed to meet the needs of a unique situation and is
created in response to non- programmed decision that
managers make.
1. Program – is a large scale and complex plan designed to
achieve a specific objective
2. Projects – is a smaller and separate portion of a
program.
3. Budgets – is a financial statement of resources
allocated to specific program or projects for a given period.
2.7 THE NATURE OF MANAGERIAL DECISION
MAKING

• Decision making – is a process through which

managers and leaders identify and resolve
problem and capitalize on opportunities.
• Or is the process of choosing the best
alternative for reaching objectives.
 Types of decision making

• Programmed Decision
- is a repetitive decision that can be
handled by a routine approach.
• Non-Programmed Decision
- This types decision that deals with a
unique ,unusual or exceptional problem.
Types of Condition Under Decision Making
• Condition under Certainty
-Decision maker knows exactly what will happen . Thus he will
be able predict the outcome precisely.
• Condition Under Risk
- Future condition that are not always known in
advance.Decision maker is able to estimate the like hood of
certain outcome.
• Condition Uncertainty
- Individual cannot even assign subjective probabilities to each
of the possible states of nature an assumption is made that the
individual has no information or institutive judgment to use as a
basis for assigning the probabilities to each state of nature.
2.8 The rational Model Of Decision
Making

Identifying /investigate the situation

Identifying/ develop alternative

Evaluating and selecting alternative

Implementing the alternative

Follow up
Thank You

Next chapter….
Organizing….