Planning in Management lecture 04_class

Planning in Management lecture 04_class

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  PLANNING
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  MANAGEMENT PLANNINGMANAGEMENT PLANNING ItsNature Types of Plans Time Spans of Plans Steps in Planning Process Importance of Planning Barriers to Planning Management By Objectives
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  INTRODUCTIONINTRODUCTION Planning is oneof the major functions of the management process. A planning problem arises only when an alternative course of action is discovered. In this sense, it is essentially decision- making; although, as will be seen, it is also much more. Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it.
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  Planning bridges thegap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen. Planning is an intellectually demanding process; it requires that we consciously determine courses of action and base our decisions on purpose, knowledge, and considered estimates.
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  PLAN AND PLANNINGPLANAND PLANNING PLANPLAN A plan is a framework for goal accomplishment. It usually outlines how the organization intends to move towards its goals in a logical and systematic fashion. PLANNINGPLANNING Planning is the process of developing organizational plans. Planning is the process of thinking about what you want and how you are going to accomplish it; determining in advance what is to be done; preparing for the future by making decisions now. Planning represents management’s attempts to anticipate the future and guard itself against the threat of change, which man is urgently aware of because of his/her time sense.
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  NATURE OF PLANNINGNATUREOF PLANNING The essential nature of planning can be highlighted by describing its four major aspects; The Contribution of Planning To Purpose and ObjectivesThe Contribution of Planning To Purpose and Objectives Every plan and all its supporting plans should contribute to the accomplishment of enterprise purpose and objectives. The Primacy of PlanningThe Primacy of Planning Managerial planning seeks to achieve a consistent, coordinated structure of operations focused on desired ends. Since managerial operations in organizing, staffing, leading, and controlling are designed to support the accomplishment of enterprise objectives, planning logically precedes the execution of all other managerial functions.
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  NATURE OF PLANNINGNATUREOF PLANNING The Pervasiveness of PlanningThe Pervasiveness of Planning Planning is a function of all managers, although the character and breath of planning will vary with their authority and with the nature of policies and plans outlined by their superiors. If we recognize the pervasiveness of planning, we can more easily understand why some people distinguish between policy-making and administration, or between the “manager” and the “administrator” or “supervisor”. The Efficiency of PlansThe Efficiency of Plans We measure the efficiency of a plan by its contribution to our purpose and objectives, offset by the costs and other factors required to formulate and operate it. Plans are efficient if they achieve their purpose at a reasonable cost, labor hour, and other resources.
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  VisionVision A vision refersto the category of intentions that are broad, all-inclusive, and forward thinking. A vision describes aspirations for the future, without specifying the means that will be used to achieve those desired ends. MissionMission Mission or mission statement describes how the organization reacts to or meets the interest of its stakeholders. HIERARCHY OF PLANSHIERARCHY OF PLANS
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  GoalsGoals Goals are attemptsto make a mission statement more specific and concrete. A goal is the future state or position that an organization wants to attain within a specific period of time. ObjectivesObjectives Objectives are operational definition of goals. The main characteristics of objectives are as follows: => They can be measured. => They reduce conflict. HIERARCHY OF PLANSHIERARCHY OF PLANS
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  The failure ofsome managers to recognize the variety of plans has often caused difficulty in making planning effective. Keeping in mind that a plan encompasses any course of future action, we can see that plans are varied. STRATEGIC PLANSSTRATEGIC PLANS Strategic plans are the plans developed to achieve strategic goals. More precisely, a strategic plan is a general plan outlining decisions of resources allocation, priorities, and action steps necessary to reach strategic goals. TACTICAL PLANSTACTICAL PLANS A tactical plan, aimed at achieving tactical goals, is developed to implement specific parts of a strategic plan. Tactical plans typically involve upper and middle management and, compared with strategic plans, have a somewhat shorter time horizon and a more specific and concrete focus. OPERATIONAL PLANSOPERATIONAL PLANS An operational plan focuses on carrying out tactical plans to achieve operational goals. Developed by middle and lower-level managers, operational plans have a short-term focus and are relatively narrow in scope. Each one deals with a fairly small set of activities.
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  OPERATIONAL PLANSOPERATIONAL PLANS Operationalplans can be classified into two major groups; single-use plan and standing plan. SINGLE-USE PLANSSINGLE-USE PLANS Single-use plans are developed to carry out a course of action that is not likely to be repeated in the future. There are two types of single-use plans, as follows: Programs Projects STANDING PLANSSTANDING PLANS Whereas single-use plans (programs and projects) are for nonrecurring situations, standing plans are used for activities that recur regularly over a period of time. Here, we are discussing three types of standing plans: Policies Standard Operating Procedure Rules & Regulations
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  CONTINGENCY PLANSCONTINGENCY PLANS Anotherimportant element of an effective planning system is contingency plans. Contingency planning is the development of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate. For example, suppose a rapidly expanding franchise food company has made plans to build 100 new units during each of the next four years. Its top managers realize, however, that a shift in the economy might call for a different rate of expansion. Therefore, the firm develops two contingency plans; (1) if the economy begins to expand beyond some specific level (contingency event), then (contingency plan) the rate of the company’s growth will increase from 100 to 150 new store per year; (2) if inflation increases substantially, the expansion rate will drop from 100 to 75 new stores per year. The organization has now specified two crucial contingencies (expansion or inflation in the economy outside the expected range) and two alternative plans (increased or decreased growth).
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  TIME SPANS OFPLANSTIME SPANS OF PLANS LONG - RANGE PLANSLONG - RANGE PLANS Long-range plans determine organizational strategy and mission. A long-range plan is a component of a strategic plan, and usually associated with a functional strategy. This type of plan covers many years, perhaps even decades. INTERMEDIATE PLANSINTERMEDIATE PLANS Intermediate plans are somewhat less tentative and less subject to change, and they usually cover periods from one to five years. This is a component of the long-range plans. SHORT - RANGE PLANSSHORT - RANGE PLANS Short-range plans are sets of plans dealing with a time frame of one year or less. These short-range plans have more impact on the manager’s day-to-day activities than long range or intermediate plans. These plans schedule activities. There are two types of short-range plans: Operational/Action plans :: Operational plans are those that have been systematically developed and derived from a broader framework of plans. Reaction Plans :: Reaction plans are plans designed to allow the company to react to an unforeseen circumstance.
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  STEPS IN PLANNINGSTEPSIN PLANNING BEING AWARE OF OPPORTUNITY In Light of: The Market Competition What Customers Want Our Strengths Our Weaknesses SETTING OBJECTIVES OR GOALS Where we want to be ? What we want to accomplish ? When we want to accomplish ? 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 ? COMPARING ALTERNATIVES IN LIGHT OF GOALS SOUGHT Which alternative will give us the best chance of meeting our goals at the lowest cost and with the highest profit ? CHOOSING AN ALTERNATIVE Selecting the course of action that we shall pursue. FORMULATING SUPPORTING PLANS Such as Plans To: Buy Equipment Buy Materials Hire and Train Workers Develop A New Product NUMBERIZING PLANS BY MAKING BUDGETS Develop such Budgets as: Volume and Price of Sales Operating Expenses Necessary for Plans Expenditures for Capital Equipment
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  IMPORTANCE OF PLANNINGIMPORTANCEOF PLANNING TO OFFSET UNCERTAINTY AND CHANGETO OFFSET UNCERTAINTY AND CHANGE Future uncertainty and change make planning a necessity. The future is seldom very certain, and the further in the future the results of a decision must be considered, the less the certainty. TO FOCUS ATTENTION ON OBJECTIVESTO FOCUS ATTENTION ON OBJECTIVES Because all planning is directed toward achieving enterprise objectives, the very act of planning focuses attention on these objectives. Well-considered overall plans unity interdepartmental activities. TO GAIN ECONOMICAL OPERATIONTO GAIN ECONOMICAL OPERATION Planning minimizes costs because of the emphasis on efficient operation and consistency. No one who has watched the assembly of automobiles in one of the larger factories can fail to be impressed with the way that the parts and subassemblies come together. TO FACILITATE CONTROLTO FACILITATE CONTROL Managers cannot check on their subordinates’ accomplishments without having goals and programs against which to measure. There is no way to control without plans to use as standards.
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  MANAGEMENT BY OBJECTIVESMANAGEMENTBY OBJECTIVES Management By Objectives (MBO) can be defined as a comprehensive managerial system that integrates many key managerial activities in a systematic manner, and is consciously directed toward the effective and efficient achievement of organizational and individual objectives.    PURPOSEPURPOSE The purpose of MBO is generally to give subordinates a voice in the goal-setting and planning processes and to clarify for them exactly what they are expected to accomplish in a given time span.
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  MANAGEMENT BY OBJECTIVESMANAGEMENTBY OBJECTIVES PROCESSPROCESS The basic mechanism of the management by objectives is shown bellow through some stages: • Establishment of Organizational Goals and Plans at The Top Level of Management. • Clarification of Organizational Role. • Setting Subordinates’ Objectives. • Evaluation. • Recycling Objectives. BENEFITSBENEFITS Some benefits of the management by objectives (MBO) are listed bellow:  Better Managing. Clarified Organization.          Personal Commitment. Development of Effective Control.
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  BARRIERS TO PLANNINGBARRIERSTO PLANNING INAPPROPRIATE GOALSINAPPROPRIATE GOALS Goals that are illegal, impossible, unattainable etc. IMPROPER REWARD SYSTEMIMPROPER REWARD SYSTEM People are often rewarded for poor goal setting behavior and punished for proper goal-setting behavior. DYNAMIC AND COMPLEX ENVIRONMENTDYNAMIC AND COMPLEX ENVIRONMENT Rapid change, technological innovation, and competition increase the difficulty in assuming future as well as in goal setting.
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  BARRIERS TO PLANNINGBARRIERSTO PLANNING RELUCTANCE TO ESTABLISH GOALSRELUCTANCE TO ESTABLISH GOALS Reluctance of some managers to establish goals for themselves and their units. The reason for such reluctance may be lack of confidence or fear of future. RESISTANCE TO CHANGERESISTANCE TO CHANGE Planning essentially involves changing something about the organization. But it is seen that often such changes are not accepted. CONSTRAINTSCONSTRAINTS Constraints, that limit what an organization can do, are also major barriers in planning. Common constraints include a lack of resources, government restrictions, and strong competition.
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  OVERCOMING THE BARRIERSOVERCOMINGTHE BARRIERS Understanding The Purpose of Goals andUnderstanding The Purpose of Goals and Planning.Planning. Communication and Participation.Communication and Participation. Consistency, Revision, and Updating.Consistency, Revision, and Updating. Effective Reward System.Effective Reward System.
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  END OF THEENDOF THE PRESENTATIONPRESENTATION