Planning

Col Sudhir Raje

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Definition
KOONTZ and O'Donnell : Planning involves selecting enterprise objectives, departmental goals, Programmes, and determining the ways of reaching them. Planning, thus, provides a rational approach to preselected objectives.

Philip Kotler : Planning is deciding in the present what to do in future. It is the process whereby companies reconcile their resources with their objectives and opportunities. PERSPECTIVE MANAGEMENT 2

Steps in Planning
STEP 1 STEP 4

Setting Goals to be achieved

STEP 2

Finding alternative course of action

STEP 5

Establishing certain assumptions about feature

STEP 3

Evaluating and selecting course of action Developing plans by all levels of management based on selected plan
STEP 7 STEP 6

Deciding the planning period/ Time factor

Measuring and controlling PERSPECTIVE MANAGEMENT the progress

Planning involves..
Determination of objectives and goals of the organization, and laying down specific targets. Appraisal of current conditions of resources. Collection of relevant data. Prediction of future development.>

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Cont.
Evolving alternative course of action. Weighting the merits and demits of each course. Working out the details of the selected course of action.>

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Essentials/ Components of a Good Business Plan

Simplicity. Clear Objective. Suitability. Flexibility.>

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Cont.
Continuity. Coordination Unity of Purpose and Direction. Communication Comprehensive and Complete. Participation Full utilization of resource and opportunities.>
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Advantages
Quick Achievement of Objective. Bring Unity of Purpose and Direction. Ensures full Utilisation of Resources. Avoids inconsistency in efforts. Raises Competitiveness.>

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Cont.
Raises managerial efficiency. Avoids Hasty decisions and Actions. Ensure effective control on the organization. Acts as insurance against uncertainty. Facilitates managerial function.>

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Disadvantages

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1. 2. 3.

It is very expensive and time consuming. It make organizational structure more rigid. It make delays in the process of decisionmaking. It can not ensure certainty of future performance. It is determined only on the basis of assumption, if the assumptions are not accurate, planning may not be a success. It give only approximate results. > PERSPECTIVE MANAGEMENT
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4.

5.

6.

Forms
Strategic Planning Tactical Planning
1) Goals: It decides allocation ofIt decides the detailed use of Resources to achieve businessresources to achieve business goals goals. 2) Levels: It is done at higher level It is done at lower level of of management management 3) Period: It is a long term 4)Base: It is based on long term forecasts and is more uncertain It is short term It is based on past performance and is less uncertain.

5) Details:It is not involve with day- It is involve with day-to-day to-day operations and hence it has operations and hence it has more minimum details. details.

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Types of Planning
MISSION Objective Strategies

Single use Plans (Programmes and Budgets) For Non-Repetitive Activities

Standing Plans (Policies, Procedures, Method, and Rules) For Repetitive Activities
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Difference between Policy and Procedures

POLICIES PROCEDURES 1.General guides to both thinking and 1.General guide lines for action Action . only. 2.Help in fulfilling the objectives of the 2.Show the way to implement Enterprise. policies. 3.Polies are broad and allow for some 3.Procedures are specific and lay Discretion. down the sequence of definite acts. 4.Policies are establishes without any 4.Procedures are established a analysis. PERSPECTIVE MANAGEMENT After thorough study and analysis .

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THANK YOU

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STANDING PLANS (PERMANENT PLAN)

Mission : The basic purpose of the existence of the business is called the Mission. Objective: Objectives are the goals or the end results towards which all management activities are directed. It should be specific and set for different periods. PERSPECTIVE MANAGEMENT They are the basic purpose of an enterprise.

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CONT
Strategies: A Corporate Strategy is a plan , that takes into account the environmental opportunities and threats and the organization strengths and weaknesses and provides an optimal match between the firm and the environment.

It involves two important activities: a) Environmental Appraisal. b) Corporate Appraisal

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CONT..
a)
i. ii. iii. iv. v.

Environmental Appraisal:
Political and Legal Factors. Economics Factors. Economics Factors. Competitive Factors. Social and Cultural Factor.

b)
i. ii. iii.

Corporate Appraisal:
Outstanding Leadership. Excellent Product Design. Low Cost Manufacturing Skill.
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Cont

Policies: Policies are the broad guidelines to action. They are the basic statement serving as guides to the thinking and action of subordinates in repetitive situation. They are the first major step in converting the objectives into workable propositions.

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CONT
Procedures: Procedures provide a manner in which a particular work has to be done. They also provide a sequence of steps to be followed in execution of plan. These chronological series of steps to be followed in the execution of a plan.

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Cont.
Rules:
A rule is a guide to action. It is nature of decision made by the management regarding what is to be done and what is not to be done in a given situation.

9. Standards:
i. ii. A Standard is a measure of the level of achievement desired. It helps in comparing accomplishment with desired results.

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SINGLE-USE PLANS Programmes:

Cont..

Programmes are set of goals, policies, procedures, rules and other components require to carry out a course of action. A Project may be called a specific Programme.

a. b. c.

Budgets: A Budget is a basic plan or statement defining the anticipated cost of attaining an objective. It is considered both as a Planning and a Controlling device. It is an appraisal of the expenses expected against the income anticipated for a particular future period of time. MANAGEMENT PERSPECTIVE 22

Management By Objectives (MBO)

Non-satisfactory results by the Classical Theory of Management. Concept introduced by Peter Drucker. Focuses on accomplishment of well defined objective rather than on task and activities. It is a result-oriented process, informing employees about expectation of management as regards to their performance.
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Cont..
a) It involves: Identification of organizational, divisional, departmental, group and individual objectives

b) Formulation of effective managerial strategies, policies and procedures and c) Measurement of performance in terms and objectives.

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Definition of MBO
George Odiorne, MBO is
a process whereby superior and subordinate managers of an organization jointly define its common goals, define each individuals major area of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members.
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Objectives of MBO
To Identify Problems and Opportunities in Business. To Convert Identified opportunities into clear goals. To Set up a system to convert these goals into achievement. To Review the organization in the light of the objectives.
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cont..
To establish the objectives of each job and
unit. To clarify the policies and systems to accomplish the objectives. To set up a review system.

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Features of MBO
1. 2. 3. 4. 5. Superior- Subordinate participation. Joint Setting. Joint Decision on Methodology. Makes way to attain maximum results. Support from Superior.
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MBO PROCESS
Steps of MBO:

1. Defining the job.

2. 3. 4. 5. 6. Setting objectives. Developing action plan. Conducting Periodic Review. Performance Appraisal. Achievement of Objective.

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Diagrammatical Representation
Organizational Purpose. Managerial Philosophies. Organizational Resources and Constraints. Environmental opportunities and constraints.

Defining the job

Setting Objectives

Develop ing action plan

Achievement of Objective

Performance Appraisal

Feedback

Conducting Periodic Review

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Suggestions for Improving Effectiveness of MBO

I. II. III. IV. V. VI. Support from all. Acceptance by managers. Training of managers. Organizational commitments. Allocate adequate time and Resources. Uninterrupted information feedback.

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Benefits of MBO
The need for planning will be recognized. It provides for objectives and accountability for performance. It encourages participative management. It helps in job enrichment. It provides for a good feedback system.
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DECISIONMAKING

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Decision-Making
To decide means to come to some

definite conclusion for follow-up action.

Decisions are made to achieve goals

through suitable follow-up actions.

Decision-Making is a Process by which

selection of a course of action is take.

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Definition
The Oxford Dictionary defines the

term decision-making as the action of carrying out or carrying into effect.

According to Haynes and Massie,

A decision is a course of action which is consciously chosen for PERSPECTIVE MANAGEMENT 35 achieving a desired results.

Importance/Advantages
It sets the ball rolling. It facilitates the entire management

process.
it is a continuous management function. It is essential to face new problems and

challenges.
It is a delight and Responsible job.
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Types
Personal vs. Organizational Decisions a) Personal decisions pertain to the manager as an individual rather than to the manager as an individual rather than to organization.
b) Organizational Decisions are those that

managers make in their official capacity.

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Cont..
Strategic vs. Operational decision. a. Strategic decisions tend to influence the long - range plans. b. It involve the entire organization and not a single department.
a. Operational decisions are concern

with the day-to-day operations of the enterprise. b. They deal PERSPECTIVE MANAGEMENT with short-term plans.

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Cont.
Problem-Solving vs. Opportunity Decision. Problem solving decisions are made to solve existing or anticipated problem. Opportunity decision is a positive action that takes advantage of potential growth or higher profits
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i.

ii.

Cont
Structured vs. Unstructured Decision. a) Structured decisions are programmed and includes policies, procedures, methods and rules.
b) Unstructured decisions are non-

programmed decisions and are relatively free from limitations PERSPECTIVE MANAGEMENT imposed by prior decision.

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Cont
Crisis vs. research Decisions. a) A crisis decision is made under pressure and is characterized by surprise, stress, limited time and danger to high priority goals.
b) A research decision does not

involve any urgency and executives can take time to arrive at any decision.
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Cont
Initiative vs. Referred decision. a) Ambitious and aggressive managers make Initiative decisions.
b) Managers who are timid and self-

sitters play safe and prefer to remain inactive until a decision is Referred to them.
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Identifying the Analyzing the Problem Problem

Developing Alternative Solutions

Decision Making Process

Follow up Converting Decision Selecting the or Action taken into Action Best Solution
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TEST YOUR JUDGEMENTS

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1. It is good management that produces sound business. Elaborate

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2. Delegation of Authority is not loss of power, it is enhancement of Power. Do you agree?

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3.

What do you think will change most dramatically in the future in terms of what it take to attract and retain young people to companies?
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4. What are the key values you want in an organisation you work for?
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5. Are there Good Plans and Bad Plans. What are the characteristics of good plan?
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6. According to you what factors are critical to success or failure of the firm?
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