what is planning

1. A Global and Entrepreneurial Perspective
MANAGEMENT

2. PRINCIPLES OF MANAGEMENT
Sr. No. Chapter No. Chapter Heading
1 1 Management: Science, Theory and Practice (27th September 2010)
2 4 Essentials of Planning and Managing by Objectives (4th Oct)
3 5 Strategies, Policies and Planning Premises
4 6 Decision Making
5 7
The Nature of Organizing, Entrepreneuring,
and Reengineering
6 8 Organization Structure: Departmentation
7 9 Line/ Staff Authority, Empowerment and Decentralization
8 10 Effective Organizing and Organization Culture
9 14 Human Factors and Motivation
10 15 Leadership
11 16 Committees, Teams and Group Decision Making
12 18 The System and Process of Controlling
Sessionsal Evaluation External Evaluation
15 15 20 50 50
Quiz per Class Assignment & Presentation Mid-term Total Sessional External Exam

3. Chapter 2
Essentials of Planning and Managing
by Objectives

4. TABLE OF CONTENTS
1. TYPES OF PLANS
2. STEPS IN PLANNING
3. OBJECTIVES
4. EVOLVING CONCEPTS IN MANANGEMENT BY
OBJECTIVES

5. PLANNING
 Selecting missions and objectives as well as the
actions to achieve them, which requires decision
making, that is, choosing a course of action
amongst all alternatives
Planning
Implementation
of Plans
Controlling:
Comparing plans
with results
Corrective Action

6. TYPES OF PLANS
1. Mission or Purposes
2. Objectives or Goals
3. Strategies
4. Policies
5. Procedures
6. Rules
7. Programs
8. Budgets

7. TYPES OF PLANS
1. Mission or Purpose
“The basic purpose or function or tasks of an enterprise or agency or any part of it”
The mission statement should guide the actions of the organization, spell out
its overall goal, provide a sense of direction, and guide decision-making. It
provides "the framework or context within which the company's strategies are
formulated”
 For example; some purposes are as under;
Business
• The production and distribution of good and services
• To earn profits
Court
• Interpretation of laws and their application
University
• Teaching, research and providing services to the
community
Social
Service
• To serve humanity in general or any affected part of
society

9. TYPES OF PLANS
2. Objectives or Goals:
The end towards which the activity is aimed.
3. Strategy:
Came out from the military use. It may be defined as:
“The determination of the basic long term objectives of an enterprise and the
adoption of courses of action and allocation of resources necessary to achieve
these goals”
4. Policies:
“General Statements or understandings that guide or channelize thinking in
decision making”
5. Procedures:
“Plans that establish a required method of handling future activities”
 Procedures may or may not cut across the boundaries of different departments
 These may also include the activities of third party contractors
6. Rules
Rules spell out specific required actions or non actions, allowing no discretion

10. TYPES OF PLANS
7. Programs:
Programs are a complex of goals, policies, procedures, rules, task
assignments, steps to be taken, resources to be employed and other elements
necessary to carry out a given course of action; supported by budgets
or
 A program is a planned sequence and combination of activities designed to
achieve specified goals within set policies. Programs normally involve
 equipment
 materials
 money
 personnel and
 time
8. Budget:
“Budget is a statement of expected results expressed in numerical terms”
It includes the numerical statement in terms of expected cash flow, expenses
and revenues, capital outlays or labor or machine-hour utilization.

12. STEPS IN PLANNING
1. Being Aware of Opportunities:
 It’s a preliminary step and emphasizes on being aware of
the external environment before setting any objectives.
 It is recommended that a proper SWOT analysis of the
given situation to be done for the company/ department
 a realistic diagnosis of the situation would lead to setting
realistic objectives
2. Establishing Objectives:
 The objectives are set first for the enterprise and then for
each sub-unit.
 The goals are made long term and then broken down in
details to short term goals
 Objectives specify the end points for which the sequence
of activities is being carried out

13. STEPS IN PLANNING
3. Developing Premises:
 Premises: premises are assumptions about the environment in which
the plan is to be carried out
 Principle of Planning Premises: the more thoroughly individuals
charged with planning understanding and agree to utilize consistent
planning premises, the more coordinated enterprise planning would
be
 Forecasting is a major part of premising, it includes:
 What kinds of markets will be there
 What volume of sales
 What prices
 What products
 What technical developments
 Costs, wage rates, tax rates and policies
 What new plants?
 Political or social environment
 Long terms trends etc

14. STEPS IN PLANNING
4. Determining Alternative courses:
 It is important to search for and examine alternative
courses of action, especially those not immediately
apparent
5. Evaluating Alternative courses:
 The alternatives are evaluated in the light of premises and
goals, in terms of the profits, timelines, risks, uncertainty
etc
6. Selecting a Course:
 This is the point of decision making. Evaluation often leads
to more than one better/ advisable courses. Some times
one best course is selected and one is kept for
contingency (mostly in production and security
departments)
 Some times two courses are adapted simultaneously

15. STEPS IN PLANNING
7. Formulating derivative plans:
 Derivative plans are almost invariably required to support
the basic plan
8. Quantifying plans by budgeting:
 The overall budget of an enterprise represents the sum
total of income and expenses, with resultant profit or
surplus and the budgets of expenses, capital investment
etc
COORDINATION OF SHORT AND LONG RANGE PLANS

16. Board of
Directors
Top level
Managers
Middle level
Managers
Lower level
Managers

17. OBJECTIVES
Objectives are the ends towards which the organizational and
individual activities are directed.
The objectives are required to be “Verifiable” so as to
determine the contribution of every manager towards those
may be measured and verified
THE NATURE OF OBJECTIVES
 Hierarchy of objectives:
 The objectives form a hierarchy, ranging from the broad aim to
specific individual objectives
 The topmost and the most important objective is the purpose
or mission
 The purpose or mission is to get translated in overall
objectives
 And then there are more specific objectives or the “Key result
areas”; in which performance is essential for the success of
the enterprise

18. OBJECTIVES
 And then there are more specific objectives or the “Key result
areas”; in which performance is essential for the success of
the enterprise
 The key result areas may be;
 Market standing
 Innovation
 Productivity
 Physical and financial resources
 Profitability
 Manager performance and development
 Worker performance and attitude
 Service
 Quality

19. OBJECTIVES
 Setting Objectives and the organizational hierarchy:
 Managers at Different levels are concerned with different
kinds of objectives
 Board of Directors and Top level managers
 Determine the purpose and the key result areas
 Middle level managers
 VP or Director of department etc are involved in setting of key result area
objectives, division objectives and departmental objectives
 Lower level managers
 They set the objectives of the department and units as well as of their
subordinates
 Managers at each level set their personal objectives as well
 Top-down approach: Objectives are management driven
 Bottom-Up approach: Objectives must be set by the sub ordinates,
which will keep them committed to and motivated towards the
objectives.

20. Non verifiable Objectives
• To make a reasonable profit
• To improve communication
• To improve productivity of the
production department
• To develop better managers
Verifiable Objectives
• To achieve a ROI of 12% at the
end of the current fiscal year
• To issue a two page monthly
newsletter beginning July 1,
2010, involving not more than 40
working hrs of preparation (after
the first issue)
• To increase production output by
5% by Dec 31, 2010 without
additional costs by maintaining
the current quality level
• To design and conduct a 40 hr in
house program on
“management”, to be completed
by October 1, 2010, involving not
more than 200 Whrs of the
management dev staff and with
at least 90% of the 100
managers passing the exam

21. OBJECTIVES
 Multiplicity of Objectives:
 Managers may get many objectives at the same time
 It is wise to set the priority levels to all the objectives
 The number of objectives assigned to a manager
depends on how much would be performed by himself
and how much would he be delegating to the
subordinates and then would supervise and control
 HOW TO SET OBJECTIVES:
 The objectives must be specific, measurable, attainable,
realistic and timed
 Objectives must be challenging and priorities must be
assigned to each of them
 Should also be communicated and stated very clearly
 Objectives should promote personal and professional
growth and development

22. EVOLVING CONCEPTS OF MBO
 MANAGEMENT BY OBJECTIVES:
 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
 BENEFITS:
 People feel motivated when clear goals are effectively
communicated to them
 Improvement of managing through results-oriented planning
 Clarification of organizational roles and structures as well as
delegation of authority according to the results expected by the
people occupying the roles
 Encouragement of commitment to personal and organizational goals
 Development of effective controls that measure results and lead to
corrective actions

23. EVOLVING CONCEPTS OF MBO
 FAILURES OF MBO
1. Failure to understand the philosophy of MBO by the managers or
teams.
 The benefit it provides to the teams also needs to be clearly explained
 Its philosophy is built on the concepts of self control and self
direction
2. Failure to give guidelines to goal setters is another
problem
 Managers need to know the enterprise goals, company policies
and planning premises
3. The verifiable goals should also be flexible
 The goals should be attainable and no unethical means should be
adopted to achieve them
 Unethical activities should be punished
4. Emphasis of short-run goals on long-run goals
5. In some areas, quantitative goals could not be set, but their
importance could also not be negated for eg company image etc