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1. Planning & Types of Plans
Management by Objectives
Strategic Planning
Session 10-12

2. L E A R N I N G O U T L I N E
• Define planning
• Types (Levels) of Planning
• Strategic Planning
• Intermediate Planning
• Operational Planning
• Planning Process/ Procedure
• Barriers to Effective Planning
• Planning Premises
• Forecasting
• Key to Planning

3. What Is Planning?
• Planning
– Planning is the primary function of management.
– It focuses on the future course of action.
– A primary managerial activity that specifies the objectives
to be achieved in future and selects the alternative course
of action to reach defined objectives. Thus, it involves:
• Defining the organization’s goals
• Establishing an overall strategy for achieving those goals
• Developing plans for organizational work activities.

4. What Is Planning?
• “Determination of future course of actions in
advance”
• It is the blue print of action and operation.
• Planning is intellectual process which is
concerned with deciding in advance what,
when, why, how, and who shall do the work.

5. Definitions:
• “Generally speaking, planning is deciding in advance
what is to be done”
-W H Newman
• “Planning is deciding in advance what to do, how to
do, when to do and who is to do it. Planning bridges a
gap between from where we are to where we want to
go”
-Harold, Koontz and O’Donnel
• “Planning is that function of manner in which he
decides in advance what he will do. It is a decision
making process of a special kind, its essence is
futurity.”
-Hayness and Massie

6. Why Do Managers Plan?
• Purposes of Planning
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy
– Sets the standards for controlling
• Benefits of planning
• Goal Focus
• Minimize Uncertainty
• Improve efficiency
• Facilitates to Control
• Innovation and Creativity
• Better Coordination
• Ensures Commitment
• Aid to Business Success
• Brings Systematization

7. How Do Managers Plan?
• Elements of Planning
– Goals (also Objectives)
• Desired outcomes for individuals, groups, or entire
organizations
• Provide direction and evaluation performance criteria
– Plans
• Documents that outline how goals are to be accomplished
• Describe how resources are to be allocated and establish
activity schedules

8. Plans can be classified as:
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(5) procedures
(6) rules
(7) programs
(8) budgets
(1) mission or purposes
(2) objectives or goals
(3) strategies
(4) policies

9. 1. The mission, or purpose, identifies the basic purpose or function or
tasks of an enterprise or agency or any part of it
2. Objectives, or goals, are the ends toward which activity is
aimed
3. Strategy is 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 are general statements or understandings that guide or
channel thinking in decision making
5. Procedures are plans that establish a required method of handling
future activities
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10. 6. Rules spell out specific required actions or non-actions,
allowing no discretion
7. 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
8. A budget is a statement of expected results expressed in
numerical terms
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11. Types of Plans

12. Types of Plans
• Strategic Plans
– Apply to the entire organization.
– Establish the organization’s overall goals.
– Seek to position the organization in terms of its
environment.
– Cover extended periods of time.
• Operational Plans
– Specify the details of how the overall goals are to be
achieved.
– Cover short time period.

13. Types of Plans (cont’d)
• Long-Term Plans
– Plans with time frames extending beyond three years
• Short-Term Plans
– Plans with time frames on one year or less
• Specific Plans
– Plans that are clearly defined and leave no room for
interpretation
• Directional Plans
– Flexible plans that set out general guidelines, provide
focus, yet allow discretion in implementation.

14. Specific Versus Directional Plans

15. Types of Plans (cont’d)
• Single-Use Plan
– A one-time plan specifically designed to meet the need of
a unique situation.
• Standing Plans
– Ongoing plans that provide guidance for activities
performed repeatedly.

16. Establishing Goals and Developing
Plans
• Traditional Goal Setting
– Broad goals are set at the top of the organization.
– Goals are then broken into sub-goals for each organizational
level.
– Assumes that top management knows best because they can
see the “big picture.”
– Goals are intended to direct, guide, and constrain from
above.
– Goals lose clarity and focus as lower-level managers attempt
to interpret and define the goals for their areas of
responsibility.

17. The Downside of Traditional Goal Setting

18. Planning in the Hierarchy of Organizations

19. Contemporary Issues in Planning
• Criticisms of Planning
– Planning may create rigidity.
– Plans cannot be developed for dynamic environments.
– Formal plans cannot replace intuition and creativity.
– Planning focuses managers’ attention on today’s
competition not tomorrow’s survival.
– Formal planning reinforces today’s success, which may
lead to tomorrow’s failure.

20. Establish objectives
Develop Strategies
Determination of
premises
Determination of
alternatives
Evaluation of
alternatives
Selecting a course
of action
Formulation of
derivative plans
Implantation of
plans
Reviewing the
planning process
How does a manager Plan?
Planning Process:

21. Analyze Opportunities
• Not a step of Planning, It is pre-step of planning.
• Essential to make a successful plan.
• SWOT analysis
Setting objectives
• First and real starting point of planning.
• Management has to define objectives in clear manner by
considering organizational resources and opportunities
because a minor mistake in setting objectives might affect in
implementation of plan.
• Objectives must be specific, clear and practical.
• They should be time bound and expressed in numerical terms.

22. Determination of premises
• Premises are the assumptions about the future in which the
planning is implemented.
• They provide environment and boundaries for the implementation
of plan in practical operation.
• These premises may be tangible and intangible and external.
(a) Tangible and intangible: Tangible premises involve capital
investment, unit of production, units sold, cost per unit, time
available etc. Similarly, intangible premises involve employees
moral, goodwill, motivation, managerial attitude, etc.
(b) Internal and external: Internal premises involve money,
materials, machines and managements. In the similar manner,
external factors involve competitors strategy, technological
change, government policy, social and cultural beliefs etc.

23. Determination of alternatives
• It is essential to identify all the possible hidden
alternatives.
• The information about alternative courses of action
may be obtained from primary and secondary
sources.
• There must be search for the best alternative.
• The management must develop alternatives through
the support of experienced and intellectual experts
in management sectors.

24. Evaluation of alternatives
• Evaluate the alternatives from their expected cost
and benefits.
• This is the logical step to evaluate each alternative
from its plus and minus points.
• Each alternative is studied and evaluated in terms of
some common factors such as risk, responsibility,
planning premises, resources, technology etc.
Selecting a course of action

25. Formulation of derivative plans:
• It is essential to formulate action or derivative plans
for each step of work and to all departments of the
organization.
• These action plans involve formulation of policies,
rules, schedule and budget to complete defined
objectives.
• Thus, formulation of derivative plans is an essential
step in planning process.
• It is difficult to implement main plan without
formulation of derivative plan.

26. Implementation of plans
• Without this step, other this procedure of plan will remain as
paper work.
• This step brings all the procedure of plan into action.
• For implementation plan, management has to take some
steps such as to communicate with subordinates who initiate
to plan into action; provide necessary instruction and
guidance; make arrangement of all resources like materials,
machines, money, equipments etc; make timely supervision
and control over subordinates.
Reviewing the planning process

27. Management by Objectives
 Management by objectives is a comprehensive
managerial system that integrates many key
managerial activities in a systematic manner and
that is consciously directed toward the effective and
efficient achievement of organizational and
individual objectives
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28. Systems Approach to MBO
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29. Benefits of Management by
Objectives
 Motivate
 Clear Goals
 Improve managing through results- oriented planning
 Clarify organizational roles, structures and the delegation of
authority
 Encourage personal commitment to their own and
organizational goals
 Facilitate effective controlling, measuring results, and
leading to corrective actions
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30. Failures of Management by Objectives
 List some failures and limitations of MBO
 What would you do to overcome the failures?
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31. STRATEGIC PLANNING

32. What is strategic planning?
• A continuous and systematic process
• To define how an institution will move, over a period
of years, from where it is to where it wants to be
• By deciding
– institutional directions
– intended results
– how results are to be accomplished and
– how success is to be measured and evaluated

33. Why have a strategic plan?
• To develop a common understanding within the institution
• To explain the institution to outsiders
• To present the big picture rather than short term or partial
pictures
• To seize the initiative rather than simply react
• To define goals and objectives
• To set priorities, including for resource allocation
• To enable activity planning consistent with broad goals and
priorities
• To provide a basis for institutional evaluation

34. What is in a strategic plan?
• Situation analysis
– what is the external context in which the institution works?
• The institution
– what is the nature and role of the institution within that external context?
• Clear statement of direction
– what are the vision, mission and objectives?
• Strategies
– how will the objectives be achieved?
• Evaluation
– how will the effectiveness of the institution be assessed?

35. What are the key terms?
• Vision
• Mission (or purpose)
• Objectives
• Strategies
• Activities
• Products (or outputs)
• Outcomes (or results)
• Performance indicators

36. Vision
• Our dream of the future
• What we strive to achieve
• The picture of the long term
• Related to our institution and its work

37. A bad vision statement
“A world that is at peace, just, environmentally
responsible, economically advanced, culturally
diverse and mutually supportive”

38. A good vision statement
“A society in which human rights are
respected, protected and fulfilled”

39. Mission
• The general statement of purpose guiding our
activities
• A definition of our mandate – what we are
and what we do
• Our institution’s particular role in achieving
the vision

40. A bad mission statement
“To be a bank that doesn’t think like a bank. A
bank that knows that yesterday isn’t
today….and that today becomes yesterday
tomorrow”
Actual 1997 “Corporate Vision Statement” for a major
banking/finance company

41. A good mission statement
“We achieve our vision through promoting
and monitoring human rights compliance and
seeking remedies for victims of human rights
violations.”

42. Objectives
• What, in general terms, we actually seek to achieve during the
life of this strategic plan
• Higher level statements of key institutional goals to be pursued
in carrying out the institution’s mission
• Should be limited in number, no more than six or seven
• Should reflect institutional priorities

43. Some possible objectives
• To increase public awareness of and support for human rights
• To assist and encourage government to ensure that all laws,
policies and programs are human rights compliant
• To expose human rights violations and assist victims to obtain
remedies
• To encourage the development of human rights law and
mechanisms internationally and domestically

44. Strategies
• How we seek to achieve our objectives
• Operational approaches
• Our priorities
• Can be linked to the objectives as a whole or to each
objective individually
• Should reflect institutional priorities

45. Linking strategies to objectives
Objective: to increase public awareness of and
support for human rights
Strategies:
• Ensure a high media profile for human rights issues
• Encourage the development of school curriculum to
educate children on human rights
• Coordinate community education activities with civil
society organizations

46. Activities
• What we will actually do to implement the strategies
• Can be linked to the strategies as a whole or to each
strategy individually
• Should be at a general descriptive level:
– “we will conduct five human rights training programs a year”
– NOT “we will conduct five human rights training programs a
year on these dates and at these places”

47. Products
• What we actually produce
– publications
– reports
– media releases
– training programs
– speeches
• Sometimes called “outputs”

48. Results
• What our activities accomplished
– Better knowledge of human rights law among school
students
– Greater public awareness of key human rights issues
in our country
– More positive government responses to victims of
human rights violations
– Well trained human rights advocates and activists
• Sometimes called “outcomes”

49. Performance indicators
• Provide information about the degree to which the
actual results of our activities meet the planned
objectives
• Critical to enable evaluation of the implementation of
the plan and of the effectiveness of the institution
• Quantitative (how many) and qualitative (how well)
measures of performance
• Can measure products (outputs) but better to measure
results (outcomes)

50. Strategic plans and activity plans
• Strategic plans and activity plans complement each
other
• The strategic plan is the big picture plan that guides the
institution over several years, setting the broad
priorities for action
• The activity plan or implementation plan is the annual
plan that sets out how the strategic plan will be
implemented in the year and what specific activities will
be conducted and where and when and how

51. A good strategic plan will
• Be written down
• Be relevant to the institution and its context
• Be realistic and not merely idealistic or aspirational
• Be easy to understand
• Be clear to implement
• Have specific time frames over a significant period
• Provide clear accountability for implementation
• Recognize that things will change and be able to adapt to those
changes
• Be endorsed by the highest governing body in the institution

52. Premising And Forecasting
 Planning Premises are the anticipated
environments in which plans are expected to
operate
 Environmental Forecasting
 Values and areas of forecasting
 Forecasting with the Delphi technique
What are the typical steps of the technique?
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53. THANK YOU