International Ma, Planning & MBO

8/3/2019 International Ma, Planning & MBO

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-John


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The Nature and purpose of IB


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Forms of International Business

Parentcountry

Hostcountr

yGoods & service

Parent

country

Hostcountr

y

Primarily technical

Known how

Parentcountry

Hostcountry

Managerial & technical knownhow

Parentcountr

y

Hostcountr

y

Materialservices andPersonnel

Material servicesand Personnel

Exportation

Licensing

agreement

Managementcontracts

Joint venturesand strategic

alliances


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Capital & Known howParent

country

Hostcountr

y

Hostcountr

y

Subsidiaries


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5John


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Index

What is Planning?Wagon wheel..

Why Plan?

Planning Process..

Nature of Planning.. Essentials..

Importance..

Advantages..

Disadvantages..

Conclusion..

Questions..

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What Is Planning?*Planning is a management tool to choose a desiredfuture (goal) and develop an approach to achieve it.

7

*The process of setting goals, developing strategies, and outlining

tasks and schedules to accomplish the goals
http://www.businessdictionary.com/definition/process.htmlhttp://www.investorwords.com/2187/goal.htmlhttp://www.investorwords.com/4775/strategy.htmlhttp://www.businessdictionary.com/definition/task.htmlhttp://www.investorwords.com/4405/schedule.htmlhttp://www.investorwords.com/4405/schedule.htmlhttp://www.businessdictionary.com/definition/task.htmlhttp://www.investorwords.com/4775/strategy.htmlhttp://www.investorwords.com/2187/goal.htmlhttp://www.businessdictionary.com/definition/process.html


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Why Plan? Establish Direction

Identify Expectations

Improve Teamwork

Heighten Performance

Performance Standard

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Planning Process

Perception ofopportunities

Establishingsequence

of activities

Establishingobjectives

Planningpremises

Identification ofalternatives

Evaluation ofalternatives

Choice ofAlternative plans

Formulating ofSupporting plans


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Nature of planning

Current Status

PlanningRequired

Gap

DesiredStatus

st

atus

TimeT1 T2


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Essentials of PlanningMission: Statement that defines the purpose

and outlines the overall intent, or reason forbeing.

Vision: Mental image of the successfulaccomplishment of the Mission

Goal:An end (desired future) toward which

effort is directed in support of the Mission.

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Importance of Planning

PLANSObjectives,& howto achieve them

What kind oforganisationstructure?

What kind ofpeople arerequired?

How effectively tolead people?

By furnishingstandards of

control

Necessary for

Which helps toknow

Which affects thekind of direction

In order toassure successof plans


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Key Planning Elements Engage those to be involved

Work from common understanding

Address critical issues

Agree on how the plan is to be operationalized

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Smart PlanningMake SMARTPlans

Specific Measurable

Action oriented

Realistic

Time- and Resource-constrained15


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Classify and Prioritize Classify by type:

Essential: Must be done

Problem-solving: Ought to be done

Innovative: Nice to be done

Prioritize by: Relative importance

Time sequence

Cost-benefit relationship

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Identify Obstacles

Identify and form plan to overcome Physical Obstacles

Conditional Obstacles Psychological Obstacles

Unproductive Activities

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Advantages of planning.Planning better defines the course of action that we propose to

undertakePlanning gives a rough estimate of the time required for a project

Planning gives us a fairly good idea about the expenses involved

in the project. In fact a budget is only a financial plan

Planning helps us to get prepared for emergencies that may arise

during the course of the project

A well thought out plan gives us a clear idea about want is to be

done every day, every week and every month

Planning helps avoid duplication of labor

A plan gives everyone a clear idea of their respective role in the

project


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Disadvantages of Not PlanningWaste of Time , Money and Effort..

Lack Of Co-ordination..

High Risk and Uncertainty..

Confusion..

Conflict of Authority and Disorganization..

etc


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Without PLANNING therecan be lots of Activitiesbut NO realPROGRESS.(Success)


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04-Planning-RegionX-RSLS.ppt 21


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TABLE OF CONTENTS1. TYPES OF PLANS

2. STEPS IN PLANNING

3. OBJECTIVES4. EVOLVING CONCEPTS IN MANANGEMENT BY

OBJECTIVES


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PLANNING Selecting missions and objectives as well as the actions

to achieve them, which requires decision making, thatis, choosing a course of action amongst all alternatives

PlanningImplementation

of Plans

Controlling:Comparing plans with

results

Corrective Action


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TYPES OF PLANS

1. Mission or Purposes

2. Objectives or Goals

3. Strategies4. Policies

5. Procedures

6. Rules

7. Programs

8. Budgets


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TYPES OF PLANS1. 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 itsoverall 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 thecommunity

SocialService

To serve humanity in general or any affected part ofsociety


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TYPES OF PLANS2. 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 theadoption of courses of action and allocation of resources necessary to achievethese goals

4. Policies:General Statements or understandings that guide or channelize thinking indecision 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


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TYPES OF PLANS7. 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 carryout a given course of action; supported by budgets

or

A program is a planned sequence and combination of activities designed to achievespecified 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 andrevenues, capital outlays or labor or machine-hour utilization.


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Being aware of opportunities

In the light of:

The Market

Competition

what customers want

Our Strengths

Our weaknesses

Setting Objectives orGoals

ConsideringPlanning Premises

Choosing analternative

Comparing alternativesin the light of goalssought

IdentifyingAlternatives

FormulatingSupporting Plans

Quantifying plans byMaking Budgets


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STEPS IN PLANNING1. Being Aware of Opportunities:

Its a preliminary step and emphasizes on being aware of theexternal environment before setting any objectives.

It is recommended that a proper SWOT analysis of the givensituation to be done for the company/ department

a realistic diagnosis of the situation would lead to settingrealistic 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


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STEPS IN PLANNING3. 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 consistentplanning premises, the more coordinated enterprise planningwouldbe

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


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STEPS IN PLANNING4. Determining Alternative courses:

It is important to search for and examine alternative coursesof 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 etc6. Selecting a Course:

This is the point of decision making. Evaluation often leadsto 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

STEPS IN PLANNING


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STEPS IN PLANNING7. Formulating derivative plans:

Derivative plans are almost invariably required to supportthe 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 andthe budgets of expenses, capital investment etc

COORDINATION OF SHORT AND LONG RANGE PLANS


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Board ofDirectors

Top levelManagers

Middle levelManagers

Lower levelManagers

Hierarchy of Objectives

OBJECTIVES


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OBJECTIVESObjectives are the ends towards which the organizational and

individual activities are directed.

The objectives are required to be Verifiable so as to determinethe contribution of every manager towards those may bemeasured and verified

THE NATURE OF OBJECTIVES

Hierarchy of objectives:

The objectives form a hierarchy, ranging from the broad aim tospecific 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 resultareas; in which performance is essential for the success of the

enterprise

OBJECTIVES


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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

OBJECTIVES


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OBJECTIVES

Setting Objectives and the organizational hierarchy:

Managers at Different levels are concerned with different kindsof 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 areaobjectives, division objectives and departmental objectives

Lower level managers

They set the objectives of the department and units as well as of theirsubordinates

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.


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Non verifiable Objectives

To make a reasonable profit

To improve communication

To improve productivity of theproduction 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 (afterthe first issue)

To increase production output by5% by Dec 31, 2010 withoutadditional costs by maintainingthe current quality level

To design and conduct a 40 hr inhouse program on management,

to be completed by October 1,2010, involving not more than 200

Whrs of the management devstaff and with at least 90% of the100 managers passing the exam

OBJECTIVES


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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 dependson how much would be performed by himself and howmuch 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 beassigned to each of them

Should also be communicated and stated very clearly

Objectives should promote personal and professionalgrowth and development

EVOLVING CONCEPTS OF MBO


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MANAGEMENT BY OBJECTIVES: A comprehensive managerial system that integrates many key

managerial activities in a systematic manner and is consciouslydirected toward the effective and efficient achievement oforganizational and individual objectives

BENEFITS:

People feel motivated when clear goals are effectively communicatedto them

Improvement of managing through results-oriented planning

Clarification of organizational roles and structures as well asdelegation 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 tocorrective actions



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FAILURES OF MBO1. 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 selfdirection

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 f lexible

The goals should be attainable and no unethical means shouldbe 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


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International Ma, Planning & MBO

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