Presentation on theme: "What Is Planning? Planning"— 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 workinformal planning - nothing is written downlittle or no sharing of goalsgeneral and lacking in continuityformal planning - writtendefines specific goalsspecific 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 How Do Managers Plan? The Role of Goals and Plans in Planning goals - desired outcomesprovide direction for all management decisionsrepresent the criteria against which actual work accomplishments can be measuredplans - outline how goals are going to be met
4 Types of Plansstrategic plans - apply to the entire organizationestablish organization’s overall goalsseek to position the organization in terms of its environmentoperational plans - specify the details of how the overall goals are to be achievedtend to cover short time periods
5 Types Of Plans Frequency of Use Single use Standing Breadth Strategic OperationalTime FrameLong termShort termSpecificityDirectionalSpecific
6 directional plans - flexible plans that set out general guidelines provide focus without limiting courses of actionstanding plans - ongoing plans that provide guidance for activities performed repeatedlyinclude policies, procedures, and rules
7 ObjectivesStrategiesProceduresRulesBudgetsHIERARCHY OF PLANS
8 Purposes or MissionBasic 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
9 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-orientedFuture-orientedDynamic
10 Mission 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.
11 Objectives or goalsEnds towards which activity is aimedAre not only end point of planning but the end towards which organizing, staffing, leading & controlling are aimed
12 Reflect 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?
13 PoliciesA 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
14 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.
15 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.
16 RulesA 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.
17 One important advantage with rules is that they permit managers to simplify the decision-making process.
18 ProgrammesA programme is a comprehensive plan that includes a complex set of goals, procedures, rules, work assignments resource flow and generally covers a large 'territory'.
19 BudgetsBudget 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,
20 It 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'.
21 Planning In The Hierarchy Of Organizations StrategicPlanningOperationalTopExecutivesMiddle-LevelManagersFirst-LevelManagers
22 Steps 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
23 COMPARING 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
24 provide direction for all management decisions Objectives and Goals- desired outcomesprovide direction for all management decisionsrepresent the criteria against which actual work accomplishments can be measuredObjectives give meaning and purpose to the organization. Without objectives, without something to achieve, organization would be purposeless and chaotic.plans - outline how goals are going to be met
25 The terms 'objective' and 'goal' indicate an end result to be sought and accomplished. Three widely quoted definitions of objectives are given below:Objectives are goals established to guide the efforts of the company and each of its components.An organizational goal is a desired state of affairs which the organization attempts to realize.Objectives indicate the 'end point of a management programme'.
26 Characteristics of Objectives Objectives have the following features:Objectives form a hierarchyObjectives form a networkMultiplicity of objectivesLong and short-range objectives
27 Objectives form a hierarchy BoardofdirectorsSocio-economic purposeMissionTop levelmanagersTop down approachBottom up approachOverall objectivesof the organizationMore specific overall objectives(e.g. in key result areas)Middle levelmanagersDivision objectivesDepartment & unit objectivesLower levelmanagersIndividual objectivesPerformancePersonal development objectivesHierarchy of objectivesOrganizational hierarchy
28 Areas that need objective: market standing,productivity,physical and financial resources,profitability,innovation,managerial performance and development,worker performance and attitudes, andpublic and social responsibility.
29 Establishing GoalsApproaches to Establishing Goalstraditional goal setting - overall goals established at the top of the organizationoverall goals broken down into sub goals for each level of the organizationhigher-level goals must be made more specific at lower levelsnetwork of goals creates a means-ends chainsub goals constrain subordinates’ behaviorassumes that top managers know what is best for the organization
30 management by objectives (MBO) -MBO provides a systematic and rational approach to management MBO is based on the assumption that people perform better when they know what is expected of them and can relate their personal goals to the organizational objectives.specific performance goals are jointly determined by employees and their managersMBO emphasizes participation in setting goals that are tangible, verifiable and measurable.
31 MBO focuses attention on what must be accomplished (goals) MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods).MBO, by concentrating on key result areas translates the abstract philosophy of management into concrete results.progress toward accomplishing these goals is periodically reviewedrewards are allocated on the basis of this progressMBO consists of four elementsgoal specificityparticipative decision makingexplicit time periodperformance feedback