Re 1 Sachet Story

1983, a 20-something chemistry student, Rang Nathan set out to sell shampoos with Rs.15000 in his pocket

A market with 200 brands, lorded over by the big daddy of them all, HLL Ltd.,

Non affordability by middle class- Rs. 60 shampoo, could afford Re 1

Visualizing this gap, created ‘CHIK’ sachet

Contd.,

Brilliant idea- “Return 5 shampoo sachets and get one chik free”

Idea clicked in rural households of TamilNadu Volumes tripled Revenues took care of distribution and the brand

name stuck Advertising first on regional satellite channels and

consolidated brands- Chik, Nyle, Fair ever Fairness Cream-Southern Markets

His Company “CAVINKARE”-250 Crore approx

Products division, Polymers division, Export divisions

Market dominated by Multinationals- How do you think he would have managed?

Contd.,

The Answer is

PROACTIVE THINKING AND CAREFUL PLANNING!

Planning

Planning is one of the four functions of management.

Planning sets objectives and identifies how to achieve them.

Planning improves focus and action orientation. Planning improves coordination and control. Planning improves time management.

Planning

Planning The process of setting objectives and determining

how to accomplish them.

Features of Planning

Planning is goal-oriented Planning is a primary function Planning is all-pervasive Planning is a mental exercise Planning is a continuous process Planning involves choice Planning is forward looking Planning is flexible Planning includes efficiency and effectiveness

dimensions

Planning

Steps in the Planning Process

Step 1. Define your objectives Know where you want to go;

Step 2. Determine current status vis-à-vis objectives

Step 3. Develop premises regarding future conditions and generate alternative scenarios for what may happen;

Contd.,

Step 4. Make a plan ; describe what must be done to implement this course of action

Step 5. Formulating derivative plans

Step 6. Implement the plan and evaluate results.

Approaches to Planning

Top-down approach Bottom-up approach Composite approach Team approach

Advantages of Planning

Action oriented—keeping a results-driven sense of direction

Priority oriented—making sure the most important things get first attention

Advantage oriented—ensuring that all re-sources are used to best advantage

Change oriented—anticipating problems and opportunities so they can be best dealt with

Limitations of Planning

Rigidity Costly and time consuming Employee resistance False sense of security Managerial deficiencies PEST factors

Effective Planning- Koontz O’Donnell

Climate Top management support Participation Communication Monitoring

Types of plans

Strategic plan Tactical plan Short-term plan Intermediate-term plan Long-term plan Standing plan Single-use plan

Types of plans Formal plan—specific goals are formulated,

committed to writing, and made available to organizational members.

Informal plan—Planned in the head, but not written down. There is little or no sharing of these plans with others.

Types Of Plans

Short-range plans usually cover a year or less.

Long-range Plans Usually cover three years or more

Types Of Plans

Strategic Plan identifies long-term directions for the organization.

Operational Plan identifies activities to implement strategic plans.

Marketing Plans Financial Plans Production Plans

Types of Plans

Proactive planning- Challenge the future, anticipating future contingencies and get ready with alternative routes for unforeseen circumstances

Reactive planning- The organization merely reacts to events as and when they arise

Standing plans

A plan that can be used over and over again by managers faced with recurring activities

Objectives Policies Procedures Rules Methods

Single-use plans

Plan designed for a specific activity or time period Programs Budgets Schedules Projects

Types Of Plans

Policy communicates broad guidelines for making

decisions A policy is a standing plan that communicates

broad guidelines for decisions and action.

Procedure

defines specific actions to be taken in a chronological sequence in a specific situation

Contd.,

Methods: Sub-units of procedure. Indicate the simplified and standardized techniques to be employed to carry out a task

Rules- Describes exactly how specific activities are to be carried out, leaving no scope for individual discretion and judgment.

Single-Use Plans ProgramsAna aggregate of several related action plans that have been

designed to accomplish a mission within a specified time period ScheduleIt is a kind of time table of work, specifying the date when a task is

to begin and the time need to complete each task Project Plans

specify activities, resources, and timetables for completing projects

Budget plan that commits resources to projects or activities

Zero-based Budget allocates resources as if each budget was brand new

Planning Tools And Techniques

Forecasting tries to predict the future. Contingency planning creates back-up plans for when things go

wrong. Benchmarking identifies best practices used by others. Staff planners provide special expertise in planning. Participatory planning improves implementation capacities.

Planning Tools And Techniques

Forecasting Attempts to predict the future

Twenty Five-Year Forecasts from The Economist Intelligence Unit:

• U.S. GDP will grow 2.7% per year; EU15 countries 1.9%; Japan 1%. • Aging populations will be a drag on economies. • Emerging markets will have higher growth; Russia and Brazil 3%, India and China 6%. • In 2030 the United State will be biggest economy in world, China second, Japan third, India fourth.

Planning Tools And Techniques

Contingency Planning creates back-up plans for when things go wrong

Benchmarking uses external comparisons to gain insights for

planning. Best Practices

are methods that lead to superior performance.

Planning Tools And Techniques

Participatory Planning includes the persons who will be affected by

plans and/or who will implement them.

Semantic Confusion!

Mission: The organization’s purpose or fundamental reason for existence

Vision: A widely descriptive image of what a company wants to be or wants to be known for

Value: The set of cherished notions and beliefs that guides every move that a company makes

Contd.,

Objective: End point of a a management program

Goal: A future target or end result that an organization wishes to achieve

What may happen in traditional objective setting.

Establishing Goals and Developing Plans

Management By Objectives (MBO) Specific performance goals are jointly determined by

employees and managers. Progress toward accomplishing goals is periodically

reviewed. Rewards are allocated on the basis of progress

towards the goals. Key elements of MBO:

Goal specificity, participative decision making, an explicit performance/evaluation period, feedback

Steps in a Typical MBO Program1. The organization’s overall objectives and strategies are

formulated.

2. Major objectives are allocated among divisional and departmental units.

3. Unit managers collaboratively set specific objectives for their units with their managers.

4. Specific objectives are collaboratively set with all department members.

5. Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees.

6. The action plans are implemented.

7. Progress toward objectives is periodically reviewed, and feedback is provided.

8. Successful achievement of objectives is reinforced by performance-based rewards.

Does MBO Work?

Reason for MBO Success Top management commitment and involvement

Potential Problems with MBO Programs Not as effective in dynamic environment that

require constant resetting of goals.

Overemphasis on individual accomplishment may create problems with teamwork.

Allowing the MBO program to become an annual paperwork shuffle.

Characteristics of Well-Designed Goals Written in terms of outcomes,

not actions Focuses on the ends, not

the means. Measurable and quantifiable

Specifically defines how the outcome is to be measured and how much is expected.

Clear as to time frame How long before

measuring accomplishment.

Challenging yet attainable Low goals do not motivate. High goals motivate if they

can be achieved. Written down

Focuses, defines, and makes goals visible.

Communicated to all necessary organizational members Puts everybody “on the

same page.”

Steps in Goal Setting

1. Review the organization’s mission statement.

Do goals reflect the mission?

2. Evaluate available resources.

Are resources sufficient to accomplish the mission?

3. Determine goals individually or with others.

Are goals specific, measurable, and timely?

4. Write down the goals and communicate them.

Is everybody on the same page?

5. Review results and whether goals are being met.

What changes are needed in mission, resources, or goals?

Comparison of entrepreneurs and traditional supervisors.

MANAGEMENT TIPS Time management tips

Do say “No” to requests that divert you from what you really should be doing.

Don’t get bogged down in details that you can address later or leave for others.

Do have a system for screening telephone calls, e-mails, and requests for meetings.

Don’t let drop-in visitors or instant messages use too much of your time.

Do prioritize what you will work on in terms of importance and urgency.

Don’t become calendar bound by letting others control your schedule.

Do follow priorities; work on the most important and urgent tasks first. Continually work to optimize your time.”