Planning in management

1. PLANNING

2. Definition
“Planning is deciding in advance what to do, how to do it, when
to do it and who is to do it.”
(Koontz and O’Donnel)

3. Planning Encompasses:
• Defining the organization’s objectives or goals.
• Establishing an overall strategy for achieving
those goals.
• Developing a comprehensive hierarchy of plans to
integrate and coordinate activities.

4. Planning questions
• Where are we now?
• Where do we want to be?
• Gap?
• How can we get there from here?

5. Nature
• Planning is goal oriented
• Primary function
• All pervasive: every department and levels
• Mental exercise: imagination,foresight and sound
judgement
• Continuous process
• Involves choice
• Forward looking
• flexible

6. Advantages of Planning
• Planning provides direction
• Planning provides a unifying framework
• Planning is economical: eliminate wastages
• Planning reduces risk of uncertainity
• Planning establishes objectives or standards that
facilitate control.
• Planning facilitates decision making: different
alternatives
• Planning encourages innovation and creativity

7. Disadvantages of Planning
• Planning may create rigidity i.e. it prevents innovation
• Plans can’t be developed for a dynamic environment.
• Formal plans can’t replace intuition and creativity.
• Planning focuses managers’ attention on today’s
competition, not on tomorrow’s survival i.e.
managerial deficiencies.
• Formal planning reinforces success, which may lead
to failure.
• Planning is costly and time consuming.

8. Steps for Effective planning(Koontz
and O’Donnell)
• Climate
• Top management support
• Participation
• Communication: Goals,premises,policies
• Integration: Plans must be properly balanced
• Monitoring: As per the external environment

9. Exhibit 4-1 Types of Plans
Breadth Time frame Specificity Frequency
of use
Strategic Long term Directional Single use
Tactical Short term Specific Standing

10. Strategic and Tactical Plans
• Strategic plans are plans that apply to the entire organization,
establish the organization’s overall objectives, and seek to
position the organization in terms of its environment.
• Tactical plans (sometimes referred to as operational plans)
are concerned with the implementation of strategic plans by
coordinating the work of different departments in the
organisation.
• Strategic and tactical plans differ in three primary ways—
their time frame, scope, and whether they include a known
set of organizational objectives.

11. Short-term and Long-term
Plans
• Short-term plans are plans that cover less than one year.
• Long-term plans are plans that extend beyond five years.
• Their differences lie in the length of future commitments and
the degree of variability organizations face.

12. Specific and Directional Plans
• Specific plans have clearly defined objectives and leave no room
for misinterpretation.
• Directional plans are flexible plans that set out general guidelines.

13. Single-use and Standing
Plans
• Single-use plans are used to meet the needs of particular or
unique situation.
e.g.development of a product.
• Standing plans are ongoing, and provide guidance for
repeatedly performed actions in an organization.

14. Planning process
• Establishing objectives:
identify goals, internal as well as external conditions,
Objectives should state what is to achieved, where action needs to be taken,
who is to perform it, how it is undertaken , when it is to be accomplished.
• Developing premises: assumptions about the environment in which plans are
made.
• Evaluating alternatives and selection
• Formulating derivative plans: The plan derived for various departments,
units, activities etc in a detailed manner.
• Securing cooperation and participation of employees.

15. What Is MBO?
• MBO is a system in which specific performance
objectives are jointly determined by subordinates
and their supervisors, progress toward objectives
is periodically reviewed, and rewards are
allocated on the basis of that progress.

16. Cascading of Objectives
Overall
organizational
objectives
Divisional
objectives
Departmental
objectives
Individual
objectives

17. The Common Elements in a MBO
Program
• Goal specificity
• Participative decision making
• An explicit time period
• Performance feedback.

18. How does a manager set employee
objectives?
• Identify an employee’s key job tasks.
• Establish specific and challenging goals for each key task.
• Allow the employee to actively participate.
• Prioritize goals.
• Build in feedback mechanism to assess goal progress.
• Link rewards to goal attainment.

19. Potential Problems
• Employees tend to focus on the goals by which they will be judged.
• Specific goals encourage individual achievement rather than a
team focus.
• Specific goals may have a tendency to limit employees’potential
and discourage efforts for continuous improvement.

20. Identify the
organization’s
current mission,
objectives, and
strategies
Analyze the
environment
Identify
opportunities
and threats
Analyze the
organization’s
resources
Identify
strengths and
weaknesses
Reassess the
organization’s
mission and
objectives
Formulate
strategies
Implement
strategies
Evaluate
results
The Strategic Management Process
1.
2. 3.
4. 5.
6.
7. 8. 9.

21. • Environmental scanning refers to screening large amounts of
information to detect emerging trends and create a set of scenarios.
• Competitive intelligence refers to accurate information about
competitors that allows managers to anticipate competitors’actions
rather than merely react to them.

22. SWOT Analysis
• Opportunities are positive external environmental
factors, and threats are negative ones.
• Strengths are internal resources that are available
or things that the organization does well.
• Weaknesses are those resources that an
organization lacks or activities that it does not do
well.
• Core competency refers to any of the strengths that
represent unique skills or resources that can
determine the organization’s competitive edge.

23. Organization’s
resources
Opportunities in the
environment
Organization’s opportunities

24. 1.The growth strategy
A strategy in which an organization attempts too increase the
level of its operates; can take the form of increasing sales
revenue, number of employees, or market share.
2.The stability strategy
A strategy that is characterized by an absence of significant
change.
3.Retrenchment strategy
A strategy is reducing its size, usually in an environment of
decline.
4.Combination strategy
A strategy that is the simultaneous pursuit by an organization of
two or more of growth, stability, and retrenchment strategies.
Grand Strategies

25. 1. Cost leadership strategy(low-cost producer)
The strategy an organization follows when it wants to be
the lowest-cost producer in its industry.
2. Differentiation strategy
The strategy an organization follows when it wants to be
unique in its industry within a broad market.
3.Focus strategy
The strategy an organization follows when it wants to
establish an advantage in a narrow market segment.
Competitive strategies