Planning in Organizations

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2nd PresentationIBM

Planning in Organizations

Dr Ali Sajid

30-9-2010



Management is like

writing in the snow.

You've got to keeprepeating the message

over and over.



• Management's goal should be

to do everything in theirpower to help others be assuccessful as possible.

• Management succeeds onlywhen the rest of theorganization succeeds .



Management's Task isnot to Control or

be a “Corporate Cheerleader” or “Crisis Handler” ; it is to

“Encourage Experimentation”,Create a

“Climate for Open Communication”,“Promote Constructive Dialogue”

& Give Employees

“License to Expose Failures” &“Promote Dissent”.

- Nick McGill and John Slocum, Organizational Dynamics



For a manager to be

Perceived as aPositive Manager,

they need a four to onepositive to negative contactratio.

- Ken Blanchard



Since managers are no

longer the guardians of the knowledge base, we

do not need the“Command-Control

Type Executive” .- Shoshana Zuboff

W d t thi k th t th g '



We used to think that the manager's job was to know all the answers.

But the new manager ought to knowthe questions, to be concerned

about them and involve others infinding answers.

Today's manager needs to be more of a facilitator - someone skilled ineliciting Answers from others –

Sometimes from Peoplewho do not even know what they

know.• - J. Naisbitt & P.Aburden



• The assets of most businesseswalk out of the door at the

end of each day.• The challenge tomanagement is to

“Create an environment whichwill Motivate them to want to

return the next day.- Lynn Yates, modified by Grant Bright



Managers are peoplewho do things right;

leaders are peoplewho do the right thing.

- Warren Bennis



The old style manager puts

the megaphoneto his or her mouth,

The new style manager puts

the megaphoneto his or her ear.



People perform better formanagers, who are not

interested in production alone,but who

Express interest in theirEmployee's Welfare,

keep in touch with them,& are approachable.



Maintain a

“Positive Attitude”

at work: Ask employees what theyenjoy about their work.

Too often, conversations center toomuch on mistakes and problems.

When you ask."What did you like about

that last project?"



You encourageemployees to become

conscious of how to get

Satisfaction from work.And they may think of ways to

do theirJobs Better.



Unfortunately,

some companies

worry more aboutBroken Machines

than they do

Broken People



Half the harm

that isDone in this world is

due to People,who want to feel

important.- T.S. Eliot



If you want to manage

somebody,manage yourself.

Do that well and you'llbe ready to stop

managing.And start leading.



Every manager/

Leader should be aCEO:

Chief Empowerment Officer.



Think about the Qualities of the“Best Managers”

you ever worked for.You'll find that most of them:

- Were approachable & easy to talk to

- Rarely became overexcited orflew off the handle- Didn't let a few problems poison theirwhole outlook took a friendly, pleasant,positive approach- Showed consideration for the feelingsof the people who worked for them



There's no reason that work hasto be done with seriousness....Professionalism can be worn

lightly.

Fun is a stimulant to people.They enjoy their work moreand work moreProductively.

Herb Kelleher, CEO, Southwest Airlines



Lead with yourheart (leadership.)

Guide with yourhead(management.)- Jim Cathcart



• The main challenge for

information agecorporations is the

retraining of manager,not the retraining of

workers.- John Naisbitt



The only realdisability in lifeis a:

“Bad Attitude”.

h h



Where there is an

open mind,

there will alwaysbe a frontier



“Good fortune iswhat happens whenopportunity meets

with Planning. ” Thomas Alva Edison

(1847 -1931 )

http://thinkexist.com/quotation/good_fortune_is_what_happens_when_opportunity/146543.html




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When Planning for a year,“Plant Corn”.

When Planning for adecade, “Plant Trees”.

When “Planning for Life” “Train & Educate”

People.” Chinese Proverbs Quotes

Planning is bringing the future into the present so

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Planning is bringing the future into the present sothat you can do something about it now ”

Alam Lakein

“Let our advance worrying become advancethinking & planning ” Winston Churchill

“Productivity is never an accident. It is always the

result of a commitment to excellence, intelligentplanning , N focused effort .” Paul J. Meyer

“If anything is certain, it is that change is certain.The world we are planning for today will not existin this form tomorrow. ”

• Philip Crosby

“Failing to plan is planning to fail ” Proverb Quotes

h l f d




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• Without leaps of imagination, or dreaming, welose the excitement of possibilities. Dreaming,after all, is a form of planning .”

• Gloria Steinem

• “Good fortune is what happens whenopportunity meets with planning .”

• Thomas Elva Edison

• “Being busy does not always mean real work.The object of all work is production or accomplishment and to either of these ends

there must be forethought, system, planning ,intelligence, & honest purpose, as well as perspiration. Seeming to do is not doing.

• Thomas Elva Edison










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“Meekness: Uncommon patience in planning arevenge that is worth while. ”

Ambrose Bierce

“Success is blocked by concentrating on it andplanning for it... Success is shy - it won't comeout while you're watching. ”

Tenessee Williams

Leaders who are not planners are simply caretakers and gatekeepers." ~

Perry Smither





http://thinkexist.com/quotation/success_is_blocked_by_concentrating_on_it_and/225283.html




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• Planning ahead is a measure of class. Therich and even the middle class plan for future generations, but the poor can planahead only a few weeks or days. ”

Gloria Steinem

Good plans shape good decisions. That's whygood planning helps to make elusivedreams come true. ”

Anonymous






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• “Think ahead. Don't let day-to-day operationsdrive out Planning. ”

• Donald Rumsfeld

• “Strategic P lanning for the future is the mosthopeful indication of our increasing social

intelligence. ” • William Hastie




http://thinkexist.com/quotation/strategic_planning_for_the_future_is_the_most/330883.html


















http://www.dailycelebrations.com/desire.htm




• Create a definite plan for carrying out your desire and begin at once, whether you ready or not, to put

this plan into action .• ~ Napoleon Hill

• Bite off more than you can chew, then chew it.Plan more than you can do, then do it.

Anonymous

• Good plans shape good decisions. That's why goodplanning helps to make elusive dreams come

true. ” Anonymous


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Plans are only good intentions unless theyimmediately degenerate into hard work.

Peter Drucker (1909 - 2005)

When we are Planning for posterity, we oughtto remember that virtue is not hereditary ”

By; Thomas Paine



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It is a bad plan that admits of no modification. Publilius Syrus (~100 BC) , Maxims

“ No-one gets an iron-clad guarantee of success. Certainly, factors like opportunity,luck and timing are important. But the

backbone of success is usually found in old-fashioned, basic concepts like hard work,determination, good Planning &

perseverance. ” By: Mia Hamm



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• He who every morning plans the transactionof the day and follows out that plan, carries

a thread that will guide him through themaze of the most busy life. But where no plan is laid, where the disposal of time is

surrendered merely to the chance of incidence, chaos will soon reign.

Victor Hugo (1802 - 1885)

• Plans are only good intentions unless theyimmediately degenerate into hard work.

• Peter Drucker (1909 - 2005)








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•

Even the longest

journey beginswith a single step. –

• Chinese Proverb



“Planning is

bringing future intopresent

so that you can do

somethingabout it now”

- Alan Lakein

f



What many mgrs fail to

recognize is thatEffective Planning

is good investment &is less costly to org

than

No planning at all

Nature & Importance of Managerial Planning



Nature & Importance of Managerial Planning

•All mgrs must plan.

• Planning is intellectual activity &Maj component of managerial task.

•Planning is “Futuristic Activity” directed toward anticipating, predicting,& dealing with change.



Planning Functions.

A set of related steps bywhich mgt determine

„What is to be done &

„How it will be done ?

“ I i b hi h



“ I t is process by which mgr

anticipate futuredevelopments &

identify courses of actionnecessary to achieveorganizational &

divisional objectives”

Planning



Planning• Planning is always a staff function-mgrs does not recognize its importance.

• Hesitant to perform & seek out planning tasksbecause most silent aspect of

Planning is that it is “Iterative Process” .

• Check & recheck.

• Tedious process- & no one enjoys tedium.



Focus of Planning• Planning focus on future, what is to be

accomplished and how?• Objectives for future &Appropriate means for achieving these objectives.

• Outcome of “Planning function is plan”

• “Plan - A written document that specifies courses of action firm will take”.



Planning

• Process of Establishing Objectives &determining how best to achieve them.• Defining

– Orgl objectives or goals, – Establishing overall strategy for achievingthese goals &

– Developing a Comprehensive hierarchy of plan to integrate & coordinate activities.



• Specific Benefits of Planning: – Coordinating efforts – Preparing for change – Developing performance standards – Developing managers

The Importance of Planning



p g

Why is Planning SoImportant ?

Tocoordinate

efforts

To preparefor change

Todevelop

managers

To develop performance

standards

Considerations Required When



qManagers Initiate Planning

ManagersMust:

Determine the priorityof objectives

Establish time framesfor objectives

Resolve conflictsamong objectives

Create measurementsfor objectives

Manager’s Means of Implementing Plans



g p g

Manager sAuthority + Manager s

Persuasion + OrganizationalPolicies =

Implementationof Plans

I h t Ti F D Pl E i t ?



In what Time Frame Do Plans Exists?

• Short-Range Plans, from a day to an year • Intermediate Range Plans , 1 to 3 years• Long Range Plans , 3 to 5 years, also

called: Strategic Plans ,• Plans differ from org to org



PLANS ACCORDING TO EXTENT OF RECURRING USE

OrganizationalPlans

Single-UsePlans

StandingPlans

Programs

Projects

Budgets

Policies

Standard Operatingprocedures

Rules

Levels of Plans



Levels of Plans Strategic Plans

Detailed action steps mapped out to reach strategic goals

Tactical Plans Means charted to support implementation of the

strategic plan & achievement of tactical goals

Operational Plans Means devised to support implementation of

tactical plans and achievement of operational goals.

Single Use Plans Aimed at achieving a specific goal that, once

reached, will most likely not recur in future.



Program A comprehensive plan that coordinates a

complex set of activities related to a major non-

recurring goal that coordinates:

A set of limited Scope activities that need

to be divided into Several major projects in order to

reach a major nonrecurring goal.

Levels of Plans



Levels of Plans Standing Plans: Pr ovides: Ongoing guidance for performing recurring

activities

Policy A general guide that specifies that broad parameters within which

organization members are expected to operate in pursuit of

organizational goals.

“Service ” A document specifying behaviors that will maintain “Good

Standard of Service , Employees urged to maintain positive eye contact,

use roper vocabulary with guests (e.g. ,“Good Morning,” “Certainly, „l”ll be happy to, “, “My pleasure”)

• Procedure A prescribed Series of related steps to be



• Procedure A prescribed Series of related steps to be

taken under certain recurring circumstances.

• Well-established & formalized procedures -

called Standard Operating Procedures (SOPs ).

• Rule A statement that spells out specific actions

to be taken or not taken in a given situation



Planning Process

Step 1-Setting Objectives



Step 1-Setting Objectives• Setting Objectives: Addresses issue of what

one hopes to achieve.• May be set in performance area, i.e. P ersonnel

to be trained/recruited etc.

Important elements of Planning process.• Actions - means or specific activities planned to

achieve objectives.

• Resources -Constraints on Course of Actione.g. Total cost to be incurred in development of some products. –



Step 2- Identifying & Assessing ConditionsAffecting Objectives

• Recognize imp variables that:Influence Objectives -

Purchasing Power of Customers &Actions of Competitors,

Enemy move etc.



Additional Steps

4. Implementing Plan (organizing & leading)5. Monitoring Plans

Implementation(controlling)6. Evaluating plans Effectiveness

(controlling )



By Duration



By Duration

• Short-range Plans : Cover actions to be completed

over short time periods, & long-range plans cover longer time period.

• Long-range: Usually done at upper-mgt levels,while shot-range planning takes place chiefly onlower levels of organizational structure.

• Standing plans or repeat-use plans -usually long-range plans. Used over & over again to help guide

behavior of members of org.

By Function



By Function

•Developed for key orgal functions: – Defense – Manufacturing

– Finance – Engineering – R&D

• Assist mgt in understanding interactions amongmajor areas of operations.

•Help in spotting Potential Conflicts & Problems &in dealin with them.



How To Plan- (Action Planning Model)



How To Plan (Action Planning Model)

• Action Planning Model: H as eight phases or steps.

– Objectives – Tasks

– Human resources

– Facilities & resources – Procedures for implementation

– Cost estimates

– Time schedule – Follow up & review

Objectives



Objectives • First step - to identify purpose of Planning.

• Setting objectives in concrete form helps todetermine direction of plan.

• Good objective should be

– Achievable – Measurable – Operational-not abstract

Tasks



Tasks

• After objective, determine tasks tobe done.

• What do you need to do to achievethese objective.

Human Resources



Human Resources• Determine people, who should be involved in

furthering plan.

• Answer following questions,

– Who will authorize plan? – Who will have to coordinate in plan?

– Who will develop plan?

– Who will approve plan?

• This phase relates to manning of plan (who)

Facilities & Resources• Review other resources & facilities



• Review other resources & facilitiesneeded for implementing plan.

• Resources will vary, depending onnature of project involved.List available resources for production

plan – Raw material – Fitting & supplies – Production equipment – Auxiliary equipment – Standby equipment – Handling equipment

– Packing materials

Procedures For Implementation



Procedures For Implementation

• Determine methods to be employed

for putting plan into action- for Executing plan.

Actual implementation of plan & whatit will take to get plan moving.

Strong interrelationship among

different phases of planning process,objectives, resources & methods &means to be employed.

Cost Estimates



Cost Estimates

• Determine cost estimates or budget of plan.

• Cost considerations are prime factors in all

plans.

• Should be utmost concern to getting job donemost efficiently, effectively & on time.

• Within budget & resources you have.

Time Schedule



Time Schedule • Set up timetable for planned operations.

• Specific dates & deadlines.

• Drawn up for various phases of plan.

• Deadlines must be realistic

Follow-Up & Review



Follow Up & Review

• Establish “Built -in Control Mechanisms”

for follow-up & control.

Ensure up to date info abt:

Status of Plan & Progress reports:

So that necessary adjustmentscan be made on time.

Barriers To Planning &



What To Do About It?

• Most common barriersMgt ego & attitude

– Time& cost – Intellectual activity – Clarity of objectives – Inadequate information – Mgt philosophy & external forces

Mgt Ego & Attitude



• Business failures & poor decisions arerarely result of too much planning.

• Mgt ego to say-

“I don t need plan, I amsure I can handle

whatever develops”

Time & Cost



Basically a Tool toPreventive Action,Pay offs of “Good

Planning”are far

“Greater than Costs”.

Intellectual Activity

E i ll l i i b



• Essentially mental activity but many mgrs are morecomfortable in Taking action than in

“Thinking Abt Problems” .

• Find it difficult to deal with “Abstractions” &

“Think conceptually” in terms of:“Models & Relationships among complex

variables in Hypothetical Situations .

Mgrs -subject to constant pressures & demands ontheir time to point that they do not have any timeleft for real, uninterrupted thinking, let alone

planning.

Clarity of Objectives



Clarity of Objectives

• Obstacle to Better Planning is:

“Lack of clear obj” &“Sharp definition of problems”

toward which planning is being directed.

• Worse when:• “Problems & Obj• “Not only unclear, but also wrong” .

Inadequate Info



• Having too Much, too Little, or Wrong

info can be barrier to“Planning Process” .

Getting right info,

in right amount at right time“Prerequisite”

for “Effective Planning”. Fundamental Roles mgrs assume is:

“Informational Role”.

Mgt- Philosophy & External Forces



• Major determinant of “Effectiveness of Planning”

Process:Values, Philosophies &

Attitudes of Top mgttowards Planning Activity.

Mgrs should understand



Mgrs should understand

“Orientations, Biases & ValueJudgments “Of Key Mgrs &

Executives”. • Enables them to Deal with

Potentialinterdepartmental conflicts.



• While Attitudes of all

mgrs affect planning process,external forces are of equal

importance.Mgrs must seriously consider

Them in Planning.

Strategic PlanningS t ti f li d ff t f t



• Systematic, formalized effort of org toestablish basic Orgl purposes,

objectives, policies & strategies toachieve obj & basic company process.

• It is actually process wherebycorporate obj for future are identifiedin response to perceived opportunities

& threats, whereby activities areselected & resources allocated to meet

these objectives.



Recognize Causes of Managerial FailureManagerial failure in planning is caused by several factors.

• Failure to consider each of:“People whom mgr s plan will affect” .

• Failure to mgr to provide “alternativeoptions” in case original plan is not adopted.

• Failure of “Mgr to Anticipate Change” .

• Unwillingness of Mgr to “Take calculatedRisks” . Risk taking always associated with

planning, integral part of mgt.Contd…



Recognize Causes of Managerial Failure

5. Mgr s failure to “Establish Priorities” .

6. Mgr s failure to make “Plans known to thoseinvolved” .

5. Failure to establish appropriate measurementswhen plan is prepared.

Ten Commandment for Effective Planning



1. Review & incorporate policy guidelines into planning process.

2. Policy determination should precede planning.3. Marshall organizational resources – such as info,

people, capital, & equipment – specifically for planning.

4. Recognize budgeting as both “Planning & control process.

5. Consider time element in planning.6. Involve people, who are affected by plan in

planning process.



Ten Commandment for Effective Planning

6. Define task assignments, delegations of authority &responsibilities for individuals for individuals involved.

7. Develop priorities among various plans put into actions.8. Be prepared to resolve conflicts arising during plan

implementation.9. Put plans in writing this p will improve planning itself, action.

Incorporate reasoning in every plan.10. Maintain plans through specific review & control processes.

Provide for appropriate monitoring & evaluation by settingdeadlines & making necessary changes.

Major Components of Planning



Major Components of Planning

Goal. A future target or end result that an org whishes toachieve.

Plan the means devised for attempting to reach a goal.

Mission The org purpose or fundamental reason for existence

Mission Statement A broad declaration of the basic,unique purpose and scope of operations that distinguishthe org from others of its type.

The Overall Planning Process



The Overall Planning Process

Mission Goals Plans

Goal Attainment

(organizationalEfficiency &Effectiveness)



Mission

• An orgs mission statementcontains an outline of orgs

beliefs or general guidelinesthat it will use in pursuing its

mission, sometimes referred toas company creeds.

Effective Mission Statements



Focus onMarkets Rather Than Products

Are

Motivating

AreSpecific

Are

Achievable

Effective

MissionStatements

How Often Plans Are To Be Reviewed &



Revised?

• Depends on resources available• Degree of accuracy• Usually

– Longer time span of plan, longer period between reviews & revisions .

• Conversely, – More important plan is to org,s immediate

success, more closely it will be monitored.

Specific Vs Directional Plans



Specific Vs. Directional Plans

• Plans that are clearly defined &leave no room for interpretation arespecific plans.

• Flexible plans that set out generalguidelines are directional plans.

Centralized Vs Decentralized Plans



Centralized Vs Decentralized Plans• Centralized- done by a single group,

corporate planning. – Not usual for large orgs.

• Decentralized- used where each division or department is responsible for planning itsown operations, with little if any guidancefrom central planning unit.

– Common in large-scale orgs with multiple product line.

– Danger of overlaps even conflicts in planning



Management by Objectives



Management by Objectives (MBO) is a process through which

specific goals are set collaboratively for the organization as awhole and every unit and individual within it.

Goals- then used as a basis for planning, managing org

activities, & assessing and rewarding contributions.

MBO usually incorporates considerable participation among

managers and subordinates in setting goals at various levels.

Steps in the MBO



1. Develop overall organizational goals

2. Establish specific goals for various dept,subunits, and individuals

3. Formulate action plans

4. Implement plans and maintain self-control

5. Review progress periodically

6. Appraise performance

Strengths and Weaknesses of MBO

STRENGTHS WEAKNESS



1. Aids Coordination of goals and plans

1. Tends to falter without strong,continual commitment from topmanagement

2. Helps clarify prioritiesand expectations

1. Necessitates considerabletraining or managers

3. Facilitates vertical andhorizontalcommunication

3. Can be misused as a punitivedevice

4. Fosters employeesmotivation

4. May cause overemphasis of quantitative goals



Strategic - Management

Includes Strategic -planning, implementation,

& control.



Strategic- Planning

• It involves decisions made by topmanagement.

• Involves ultimate allocation of largeamounts of resources such as money, labor,or physical capacity.

• Has significant long term impact.• Focuses on orgs interaction with external

environment.

Strategic Planning



Strategic Planning

• Strategic planning includesthose activities that involvesdefining an org”s mission,

setting its objectives, &developing strategies to enableit to operate successfully in its

environment.

Strategic Planning



StrategicPlanning

Making decisions about thelong-term goals and

strategies of an organization

Strategic GoalsMajor targets or end results that relate to the long-

term survival, value, and growth of theorganization

StrategyA pattern of actions and resource allocations designed to achieve

the goals of the organization

The Budgeting ProcessManagement objectives for the organizations.



Management objectives for the organizations.

Sales budget

• Forecast of quantities sold• Forecast of dollar income

Other income• Interest income

• Miscellaneous income LessProduction budget

•Units to be produced•Cost of materials•Direct labor costs

•Factory overhead

Marketing Budget•Promotion costs

•Selling expenses byterritories

Administrativeexpense budget

•For each operatingdepartment

Miscellaneousexpense budget

•Interest on loans•Other

Results in

Financial budget• Budgeted balance sheet

• Supporting budgets

Barriers To Goal Setting & Planning



• Major Barriers

• Inappropriate Goals• Improper rewards system• Dynamic & complex

environment• Reluctance to establish

goals

• Resistance to change• constraints



Barriers To Goal Setting & Planning

• Overcoming Barriers

Understanding purposesof goals & planning

• Communication &participation

• Consistency, revision &updating effectiverewards system

Potential Obstacles to Planning



Several Potential obstacles threaten - ability of org to develop effective plans.

One barrier is a rapidly changing environment,- makes planning more difficult

because plans must be altered frequently.

View among some managers that planning is unnecessary.

Org can take several steps to reduce obstacles to planning. One step isconveying strong top mgt support for planning process.

Planning staff A small group of individuals who assist top level managers in

developing the various components of planning process.

Contingency planning is development of alternative plans for use in the event

that environmental condition evolve differently than anticipated, rendering

original plans unwise or unfeasible.

Efficiency of Plans• Its Contribution to “Purpose & Objectives



• Its Contribution to “Purpose & Objectives,offset by costs & other factors required to

formulate & operate it”.

• Plans are efficient if they achieve their purposeat a reasonable cost, when cost is measured notonly in terms of time & money or production

but also in degree of individual or groupsatisfaction.

Issues in Planning



Issues in Planning

1. Being aware of Opportunities2. Establishing Objectives3. Determining Alternative Courses

4. Evaluating Alternative Courses5. Selecting a Course6. Formulating Derivative Plans

7. Numberizing Plans By Budgeting

Planning in Organizations

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