1. What Is Planning? Planning
involves defining the organization’s goals, establishing an overall strategy, and developing a comprehensive set of plans to integrate and coordinate organizational work
informal planning - nothing is written down
formal planning - written
defines specific goals
specific action programs exist to achieve goals

2. Planning is the function that answers four basic questions:
Where are we now?
Where do we want to be?
Gap?
How can we get there from here?

3. Why Do Managers Plan? Purposes of Planning
planning is the primary management function that establishes the basis for all other management functions
planning establishes coordinated effort
planning reduces uncertainty
planning reduces overlapping and wasteful activities
planning establishes goals and standards used in controlling

4. Goals and Plans the most fundamental management function
Goal - A desired future state that the organization attempts to realize
Plan - A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals
Planning – determining the organization’s goals and the means for achieving them
the most fundamental management function

5. Benefits for the Organization
Provided from Internal and External Messages Goals and Plans Send
Legitimacy
What the organization stands for - reason for being
Symbolizes legitimacy
Employees identify with overall purpose
Source of Motivation and Commitment
Employees’ identification with the organization
Motivate by reducing uncertainty
Resource allocation
Allocate employees, money, and equipment
Guides to Action
Provide a sense of direction; focus attention on specific targets
Direct efforts toward important outcomes

6. Benefits for the Organization
Provided from Internal and External Messages Goals and Plans Send
Rationale for Decisions
Learn what organization is trying to accomplish
Make decisions to ensure that internal policies, roles, performance, structure, products, and expenditures will be made in accordance with desired outcomes
Standard of Performance
Serve as performance criteria
Provide a standard of assessment

7. TYPES OF PLANS
Objectives
Strategies
Procedures
Rules
Budgets

8. Organizational Mission
Purpose or Mission - organization’s reason for existing
Mission Statement
Broadly states the basic business scope and operations that distinguishes it from similar types of organizations
May include the market and customers
Some may describe company values, product quality, attitudes toward employees

9. Basic function or task
Reflects overall philosophy of management
Indicates the line of business of an org. & its long term commitment
Ex. Business-production & distribution of goods & services
State highway department-design, building & operation of a system of state highways
University-Teaching & research

10. A mission is the very reason and justification for the existence of a firm. It is usually expressed in terms of the benefits the firm provides to its customers. An organisation's mission statement states what it is, why it exists and the unique contribution it can make. Mission statements are characterised by the following:
Customer-oriented
Future-oriented
Dynamic

11. Mission statements
The Tata Group - Our purpose is to improve the quality of the communities we serve.
The Tata name is a unique asset representing leadership with trust.
Aditya Birla Group
Our vision-to be a premium conglomerate with a focus at every business level
Our mission-To pursue the creation of value.

12. (Vision-An organization's fundamental aspirations & purpose that usually appeals to its members hearts & minds.)
Wal-Mart –To give ordinary folk the chance to buy the same things as rich people.
HCL Com-Changing the way India communicates

13. Objectives or goals
Ends towards which activity is aimed
Are not only end point of planning but the end towards which organizing, staffing, leading & controlling are aimed
Ex- Maruti Udhyog –goal is to provide low-cost, economical, and quality automobiles to the public.

14. Reflect broad area of org,s. operations
Strategies
Have a competitive implication--is a special plan prepared for meeting the challenge posed by the activities of competitors & other environmental forces.
Reflect broad area of org,s. operations
links the resources of the organization with the risks & challenges posed by the outside world.
Provides answers to the following questions
What business are we in?
What should be our business?
Who are our customers?
What do they buy & why?
Why should society accept us?

15. Policies
A policy is a basic statement that guides decision-making. It tells people what they may or may not do. It directs the way in which activities are to be achieved.
Ex. promotions to be based on merit only

16. Policies set behavioral limits.
They are restrictive in the sense that they define the boundaries within which decisions ought to be made. At the same time, they give enough room for subordinates to use their discretion.

17. Procedures A procedure is a well thought out course of action.
It prescribes the specific way in which a piece of work is to be done.
Procedures are called 'action guidelines'. They are generally derived from policies.
The basic purpose of a procedure is to spell out clearly, the way one is to go about doing something.
Procedures are used in all major functional areas.

18. Methods
Methods are sub-units of a procedure; they show clearly as to how a step of procedure should be performed.
They indicate the techniques to be employed to make the procedure effective.
The primary focus is on finding out the best way of doing a piece of work.

19. Rules
A rule is a very specific and detailed guide to action.
It is established to direct or restrict action in a fairly narrow manner.
There is no scope for discretion or judgment. Rules must be followed precisely and observed strictly.

20. One important advantage with rules is that they permit managers to simplify the decision-making process.

21. Programmes and Schedules
A programme is a comprehensive plan that includes a complex set of goals, procedures, rules, work assignments resource flow and generally covers a large 'territory'.
Schedules are often combined with programmes to ensure a chronological sequence of activities.

22. Projects
A project is a small programme.
A project has the following features:
The activity has a clear objective.
Somewhat unique and unfamiliar to the existing organization.
The activity is complex and critical to the organization.
The activity is temporary with respect to duration of need.

23. Budgets
Budget is a numerised programme designed primarily to allocate the resources of an organization.
It is a statement in terms of money or quantity or both

24. It is prepared for a definite future period,
It is prepared in advance, and
It aims at achieving a given objective.
The use of a budget to monitor and regulate the operational work of an organization in a systematic way is called 'budgetary control'.

25. DEVELOPING PLANS
The process of developing plans is influenced by contingency factors & planning approach
Contingency Factors in Planning
level in the organization
operational planning dominates managers’ planning efforts at lower levels
strategic planning more characteristic of planning at higher levels
degree of environmental uncertainty
when uncertainty is high, plans should be specific, but flexible
length of future commitments
commitment concept - plans should extend far enough to meet those commitments made when the plans were developed
the more that current plans affect future commitments, the longer the time frame for which managers should plan
© Prentice Hall, 2002

26. Planning In The Hierarchy Of Organizations
Strategic
Planning
Operational
Top
Executives
Middle-Level
Managers
First-Level
Managers

27. Approaches to Planning
traditional, top-down approach
planning done by top managers
formal planning department - specialists whose sole responsibility is to help to write organizational plans
plans flowed down to lower levels
tailored to particular needs at each lower level
most effective if plan is a workable document used by organizational members for direction and guidance

28. inclusive approach
employees at each level develop plans suited to their needs
employees acquire greater sense of the importance of planning when they participate in the process
plans more likely to be used in directing and coordinating work

29. Steps in the Planning Process
BEING AWARE OF OPPURTUNITY
In Light of
The market
What customers want
Our strengths
Our weaknesses
SETTING OBJECTIVES OR GOALS
Where we want to be
What we what to accomplish & when
CONSIDERING PLANNING PREMISES
In what environment –internal or external –will our plans operate
IDENTIFYING ALTERNATIVES
What are the most promising alternatives to accomplish our objectives

30. COMPARING ALTERNATIVES IN LIGHT OF GOALS SOUGHT
Which alternative will give us the best chance to meet our goals at the lowest cost & highest profit
CHOOSING AN ALTERNATE
Selecting the course of action we will pursue
FORMULATING SUPPORTING PLANS
Such as plans to
Buy equipment
Buy materials
Hire & train workers
Develop a new product
NUMERIZING PLANS BY MAKING BUDGETS

31. Criticisms of Planning
1. Planning may create rigidity
unwise to force a course of action when the environment is fluid
2. Plans can’t be developed for a dynamic environment
flexibility required in a dynamic environment
can’t be tied to a formal plan
3. Formal plans can’t replace intuition and creativity
mechanical analysis reduces the vision to some type of programmed routine

32. 5. Formal planning reinforces success, which may lead to failure
4. Planning focuses managers’ attention on today’s competition, not on tomorrow’s survival
plans concentrate on capitalizing on existing business opportunities
hinders managers who consider creating or reinventing an industry
5. Formal planning reinforces success, which may lead to failure
success may breed failure in an uncertain environment

33. Effective Planning in Dynamic Environments
develop plans that are specific, but flexible
recognize that planning is an ongoing process
change directions if environmental conditions warrant
stay alert to environmental changes

34. Contingency Plans Specific Situations - unexpected conditions
Contingency Plans Specific Situations - unexpected conditions
Identify Uncontrollable Factors
Economic turndowns
Declining markets
Increases in costs of supplies
Technological developments
Minimize Impact of Uncontrollable Factors
Forecast a range of alternative responses to most-likely high-impact contingencies

35. Building Scenarios
Looking at trends and discontinuities and imagining possible alternative futures to build a framework within which unexpected future events can be managed
Forces managers to rehearse mentally what they would do if their best-laid plans were to collapse

36. Planning for Performance
Central Planning = Traditional Department Group of planning specialists who develop plans for the organization as a whole and its major divisions and departments and typically report directly to the president or CEO
Decentralized Planning = High-Performance Managers work with planning experts to develop their own goals and plans

37. Planning In The New Workplace
Have a strong mission statement and vision
Set stretch goals for excellence
Establish a culture that encourages learning
Embrace event-driven planning
Utilize temporary task forces
Planning still starts and stops at the top
Planning comes alive when employees are involved in setting goals and determining the means to reach them