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What Is Planning? Planning involves defining the organization’s goals, establishing an overall strategy, and developing a comprehensive set of plans to.

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Presentation on theme: "What Is Planning? Planning involves defining the organization’s goals, establishing an overall strategy, and developing a comprehensive set of plans to."— Presentation transcript:

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 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  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 4

5 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 5 Provided from Internal and External Messages Goals and Plans Send

6 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 6 Provided from Internal and External Messages Goals and Plans Send

7 Purpose or mission Policies Programs 7 Budgets Rules Procedures Strategies Objectives TYPES OF PLANS

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: 1. Customer-oriented 2. Future-oriented 3. Dynamic

11 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 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 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 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 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 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 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 20 One important advantage with rules is that they permit managers to simplify the decision- making process.

21 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 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 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 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 Planning 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 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 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 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  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 34

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

36  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 36

37  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 37 Planning comes alive when employees are involved in setting goals and determining the means to reach them


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