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
little or no sharing of goals
general and lacking in continuity
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. How Do Managers Plan? The Role of Goals and Plans in Planning
goals - desired outcomes
provide direction for all management decisions
represent the criteria against which actual work accomplishments can be measured
plans - outline how goals are going to be met

4. Types of Plans
strategic plans - apply to the entire organization
establish organization’s overall goals
seek to position the organization in terms of its environment
operational plans - specify the details of how the overall goals are to be achieved
tend to cover short time periods

5. Types Of Plans Frequency of Use Single use Standing Breadth Strategic
Operational
Time Frame
Long term
Short term
Specificity
Directional
Specific

6. directional plans - flexible plans that set out general guidelines
provide focus without limiting courses of action
standing plans - ongoing plans that provide guidance for activities performed repeatedly
include policies, procedures, and rules

7. Objectives
Strategies
Procedures
Rules
Budgets
HIERARCHY OF PLANS

8. Purposes or Mission
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

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-oriented
Future-oriented
Dynamic

10. 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.

11. 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

12. 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?

13. 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

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. 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.

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

18. Programmes
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'.

19. 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,

20. 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'.

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

22. 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

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 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

24. provide direction for all management decisions
Objectives and Goals
- desired outcomes
provide direction for all management decisions
represent the criteria against which actual work accomplishments can be measured
Objectives 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 hierarchy
Objectives form a network
Multiplicity of objectives
Long and short-range objectives

27. Objectives form a hierarchy
Board of
directors
Socio-economic purpose
Mission
Top level
managers
Top down approach
Bottom up approach
Overall objectives
of the organization
More specific overall objectives
(e.g. in key result areas)
Middle level
managers
Division objectives
Department & unit objectives
Lower level
managers
Individual objectives
Performance
Personal development objectives
Hierarchy of objectives
Organizational hierarchy

28. Areas that need objective:
market standing,
productivity,
physical and financial resources,
profitability,
innovation,
managerial performance and development,
worker performance and attitudes, and
public and social responsibility.

29. Establishing Goals
Approaches to Establishing Goals
traditional goal setting - overall goals established at the top of the organization
overall goals broken down into sub goals for each level of the organization
higher-level goals must be made more specific at lower levels
network of goals creates a means-ends chain
sub goals constrain subordinates’ behavior
assumes 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 managers
MBO 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 reviewed
rewards are allocated on the basis of this progress
MBO consists of four elements
goal specificity
participative decision making
explicit time period
performance feedback