Presentation on theme: "What Is Planning? Planning"— Presentation transcript:
1What 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 workinformal planning - nothing is written downformal planning - writtendefines specific goalsspecific action programs exist to achieve goals
2Planning 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?
3Why Do Managers Plan? Purposes of Planning planning is the primary management function that establishes the basis for all other management functionsplanning establishes coordinated effortplanning reduces uncertaintyplanning reduces overlapping and wasteful activitiesplanning establishes goals and standards used in controlling
4Goals and Plans the most fundamental management function Goal - A desired future state that the organization attempts to realizePlan - A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goalsPlanning – determining the organization’s goals and the means for achieving themthe most fundamental management function
5Benefits for the Organization Provided from Internal and External Messages Goals and Plans SendLegitimacyWhat the organization stands for - reason for beingSymbolizes legitimacyEmployees identify with overall purposeSource of Motivation and CommitmentEmployees’ identification with the organizationMotivate by reducing uncertaintyResource allocationAllocate employees, money, and equipmentGuides to ActionProvide a sense of direction; focus attention on specific targetsDirect efforts toward important outcomes
6Benefits for the Organization Provided from Internal and External Messages Goals and Plans SendRationale for DecisionsLearn what organization is trying to accomplishMake decisions to ensure that internal policies, roles, performance, structure, products, and expenditures will be made in accordance with desired outcomesStandard of PerformanceServe as performance criteriaProvide a standard of assessment
7TYPES OF PLANSObjectivesStrategiesProceduresRulesBudgets
8Organizational Mission Purpose or Mission - organization’s reason for existingMission StatementBroadly states the basic business scope and operations that distinguishes it from similar types of organizationsMay include the market and customersSome may describe company values, product quality, attitudes toward employees
9Basic function or taskReflects overall philosophy of managementIndicates the line of business of an org. & its long term commitmentEx. Business-production & distribution of goods & servicesState highway department-design, building & operation of a system of state highwaysUniversity-Teaching & research
10A 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-orientedFuture-orientedDynamic
11Mission statementsThe 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 GroupOur vision-to be a premium conglomerate with a focus at every business levelOur 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
13Objectives or goalsEnds towards which activity is aimedAre not only end point of planning but the end towards which organizing, staffing, leading & controlling are aimedEx- Maruti Udhyog –goal is to provide low-cost, economical, and quality automobiles to the public.
14Reflect broad area of org,s. operations StrategiesHave 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. operationslinks the resources of the organization with the risks & challenges posed by the outside world.Provides answers to the following questionsWhat business are we in?What should be our business?Who are our customers?What do they buy & why?Why should society accept us?
15PoliciesA 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
16Policies 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.
17Procedures 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.
18MethodsMethods 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.
19RulesA 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.
20One important advantage with rules is that they permit managers to simplify the decision-making process.
21Programmes 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.
22ProjectsA 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.
23BudgetsBudget 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
24It is prepared for a definite future period, It is prepared in advance, andIt 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'.
26Planning In The Hierarchy Of Organizations StrategicPlanningOperationalTopExecutivesMiddle-LevelManagersFirst-LevelManagers
27Approaches to Planning traditional, top-down approachplanning done by top managersformal planning department - specialists whose sole responsibility is to help to write organizational plansplans flowed down to lower levelstailored to particular needs at each lower levelmost effective if plan is a workable document used by organizational members for direction and guidance
28inclusive approachemployees at each level develop plans suited to their needsemployees acquire greater sense of the importance of planning when they participate in the processplans more likely to be used in directing and coordinating work
29Steps in the Planning Process BEING AWARE OF OPPURTUNITYIn Light ofThe marketWhat customers wantOur strengthsOur weaknessesSETTING OBJECTIVES OR GOALSWhere we want to beWhat we what to accomplish & whenCONSIDERING PLANNING PREMISESIn what environment –internal or external –will our plans operateIDENTIFYING ALTERNATIVESWhat are the most promising alternatives to accomplish our objectives
30COMPARING ALTERNATIVES IN LIGHT OF GOALS SOUGHT Which alternative will give us the best chance to meet our goals at the lowest cost & highest profitCHOOSING AN ALTERNATESelecting the course of action we will pursueFORMULATING SUPPORTING PLANSSuch as plans toBuy equipmentBuy materialsHire & train workersDevelop a new productNUMERIZING PLANS BY MAKING BUDGETS
31Criticisms of Planning 1. Planning may create rigidityunwise to force a course of action when the environment is fluid2. Plans can’t be developed for a dynamic environmentflexibility required in a dynamic environmentcan’t be tied to a formal plan3. Formal plans can’t replace intuition and creativitymechanical analysis reduces the vision to some type of programmed routine
325. Formal planning reinforces success, which may lead to failure 4. Planning focuses managers’ attention on today’s competition, not on tomorrow’s survivalplans concentrate on capitalizing on existing business opportunitieshinders managers who consider creating or reinventing an industry5. Formal planning reinforces success, which may lead to failuresuccess may breed failure in an uncertain environment
33Effective Planning in Dynamic Environments develop plans that are specific, but flexiblerecognize that planning is an ongoing processchange directions if environmental conditions warrantstay alert to environmental changes
34Contingency Plans Specific Situations - unexpected conditions Contingency Plans Specific Situations - unexpected conditionsIdentify Uncontrollable FactorsEconomic turndownsDeclining marketsIncreases in costs of suppliesTechnological developmentsMinimize Impact of Uncontrollable FactorsForecast a range of alternative responses to most-likely high-impact contingencies
35Building ScenariosLooking at trends and discontinuities and imagining possible alternative futures to build a framework within which unexpected future events can be managedForces managers to rehearse mentally what they would do if their best-laid plans were to collapse
36Planning 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 CEODecentralized Planning = High-Performance Managers work with planning experts to develop their own goals and plans
37Planning In The New Workplace Have a strong mission statement and visionSet stretch goals for excellenceEstablish a culture that encourages learningEmbrace event-driven planningUtilize temporary task forcesPlanning still starts and stops at the topPlanning comes alive when employees are involved in setting goals and determining the means to reach them