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PLANNING
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What does a manager do?
Plans
Organise
Motivates
Communicates
Directs and co-ordinates Controls
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The Functions of
Management
7-2
Managers
Planning
activities toachieve the
organization's
objectives
Organizing
resources andactivities to
achieve the
organizationsobjectives
Staffing
theorganization
with qualified
people
Directing
employeesactivitiestoward
achievement
of objectives
Controlling
theorganizations
activities
to keep it
on course
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Planning Defined
A systematic process of reaching a desired state
by establishing goals and formulating strategies
to achieve them. Planning involves selecting missions and
objectives and the actions to achieve them.
Planning precedes any other managerial function
Plans need to be made utilizing the least of the
resources.
Planning is required in each and every job
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Planning
Planning involves selecting objectives orgoals and the course of actions to achievethem:
Provides the bridge to take us from where weare to where we want to go;
Is a rational approach to achieving pre-selected objectives - based on innovation,
knowledge and purpose;
Decision making in choosing the best fromalternative courses of action and is integral to
planning;
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Plans as foundation of
Management
Plans
What kind ofresourcesneeded?
What kind of people
& org. structureto have?
How to lead themto reach planned
goals?
How to control incase of deviationfrom plan ?
The primacy of Planning
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Steps in Planning
Being aware ofchallenges
Market, Customers
wants, Competition,Own strengths& weakness
Setting Goals/Objectives
What to accomplish
& when
Planning premises
Internal & externalEnvironment/conditions
Identifyingalternatives
Comparing &choosing analternative
Decision
making
Budgeting(Numberizing Plans)
e.g., Sales budget
Operational Expense budget,Capital expenditure budget
FormulatingSupporting
plans
e.g., plan to buy
Equipment, recruit & trainEmployees, develop product etc
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Determining planning
premises
Establish objectivesDevelop Strategies
Establish policies
Develop program for
accomplishments
Establish schedulesand budgets
Establish proceduresIdentify potential
problems
Develop preventive&/or contingent
action
Coordinate
throughout the
planning
How does a manager Plan?
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Features/Characteristics of Planning:
Planning is goal-oriented. Planning is looking ahead.
Planning is an intellectual process. Planning involves choice & decision making.. Planning is the primary function of management /
Primacy of Planning. Planning is a Continuous Process. Planning is needed by all. Planning is designed for efficiency. Planning is Flexible. Basic to all managerial functions.
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Types of Plan
A plan is a specific action proposed to help the organization achieve itsobjectives.
There are different types of plan. Some of the important types are given anddiscussed below.
Strategic Plans
Strategic plans are detailed action steps mapped out to reach strategicgoals.
Strategic plans address the broad issues such as changing conditions,allocation of resources, international competition, etc.
Generally such goals are developed by top management after consultingboard of director and middle management. The time horizon of strategicgoals exceeds 3 to 5 years.
.
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Tactical Plans These are important to the success of strategic plans and cover
intermediate time horizon usually encompassing 1 to 3 years.
Such plans are developed by middle managers after consultinglower-level managers.
Tactical plans are more specific and concrete than strategic plans.
Operational Plans Such plans clearly specify the things needed to be done in the short
run, in order to achieve the operational goals.
These plans are developed by lower-level managers afterconsulting the middle managers.
The time period of operational plans is less than one year, such as
few months, weeks or even days.
The success of strategic and tactical plans depends upon theachievement of operational goals.
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Types of Plans
7-3 Operational
Plans
Tactical
Plans
Strategic
Plans
Specify actions to
achieve tactical plans
(very short-term)
Designed to implement
strategic objectives
(usually one year or less)
Establish long-range
objectives
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Specific Plans
Specific plans require clarity and a sense of
predictability that often do not exist thereforethey are not preferable.
Directional Plans Directional plans refer to the flexible plans that
set out general guidelines. Such plans are preferable in dynamic
environment where management must beflexible in order to respond to unexpectedchanges. Managers use the directional plans toremain focused and do not lock themselves intospecific goals or course of action.
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Single-use Plan
Single-use plan is one-time plan specifically designed to
achieve particular goal that, once achieved, will mostlikely not recur in the future. Such plan is developed tomeet the needs of a unique situation.
a. Program
A single use plan aimed at carrying out a special projectin an organization that if accomplished will contribute tothe long term success of organization. Programs arecomposed of several different projects and may takemore than 1 year to complete.
b. Project A project is a plan that organizes a set of limited-scope
activities that do not need to be divided into severalmajor parts in order to reach a significant nonrecurringgoal.
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Standing Plans Standing plans are ongoing plans that aimed at providing guidance
for performing recurring activities. There are three important types of
standing plans which are: policies, procedures, and rules. a. Policy Policy is guideline that establishes parameters for making decisions.
It specifies the broad limits with in which organizational membersare expected to operate. So it means that policy does not mentionthe specific action but provides a parameter for action.
b. Procedures Procedure is a series of related actions that must be taken to
accomplish a particular task. Policy does not allow much flexibility ordeviation because they provide detailed step-by-step instructions asto what should be done. In this way procedures outline more specificactions than policies do.
c. Rules An explicit statement that tells managers what they can or cannot
do. Rules do not allow any room for interpretation because it clearlyspecifies the actions needed to be done in a particular situation
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Types of Plans
Mission / PurposeThe basic functionor reason for existence of
an enterprise/ organization
Case in point:Missionof Indira Institute
To train our students to become the best business
minds and entrepreneurs today, who will leadtheir companies successfully into the futuretomorrow , locally, nationally and globally.
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Type of Plans (Contd)
Objectives/ GoalsThe end towards which activity of an
organization is aimed, e.g. For a Business enterprise profit, surplus creation;
For a Management Institute: The number ofemployable/useful trainees;
Strategies Determination of the long term objectives and
adoption of a course of action
Gives a frame work for linked action-plans,communicated systematically to guide thinking andactions.
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Types of Plans (contd)
Policies
Plans that are general directional statements (or
understandings) that guide/help in decision making:
Repeat decisions taken reflexively;
Delegation of tasks without loss of control.
Some discretion is permissible depending on
circumstances thus encouraging initiative within limits
and situational adjustments;
Issues with Policy
Seldom documented in writing
Subject to interpretations
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Types of Plans (contd)
Procedures
Plans that are chronological sequences ofrequired actions: task-oriented in nature;
Cuts across department boundaries (sub-systems) in an organization: e.g. customer
complaint handling procedure;Procedures and policies are inter related: e.g.
authorization for paid leave Policy governs quota, responsible authority etc.
Procedure governs application, grant and record-keeping.
Rules
Specific actions or non-actions allowing nodiscretion Caution: rules (and procedures too) limit initiative!
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Types of Plans (contd) Programs
Action plans (mainly non-routine or for changedactivities) including, task assignments, steps tobe taken, resources to be deployed etc. toachieve a (new/renewed) goal;
Primary program may require supporting programs,spreading across the enterprise;
Perfect coordination between supporting & primaryprograms essential to avoid delays, unnecessarycosts and expected roll-out.
Programs are a complex of (sub)goals, policies,rules and other elements necessary for thecourse of action e.g. obtaining ISO certification.
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Types of Plans (contd)
Budgets
A statement of expected results expressed in
Numerical terms e.g. financial operating budget =
profit plan;
Budgets enforce precision in thinking:
Making a budget is planning by itself;
Encourages innovationa different way to work
Budgets serve for Control: Enforces discipline in execution of plans;
Instills cost consciousness;
Makes people (constantly) plan!
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Advantages of Planning
Better coordination
More efficient control of operation
Easier delegation
More economical use
Better decision making
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Barriers in effective Planning1. Difficulty of accurate premising
2. Problem of rapid change3. Internal Inflexibilities
Psychological Inflexibilities
Policy & Procedural InflexibilitiesCapital investment
4.External InflexibilitiesPolitical climate
Trade unionTechnological Change
5. Time & cost Factor
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