PLANNING

Introduction
• Planning is the most basic of all management
functions.
• We plan to do official work , improve our
carrers , plan our investment ,built own
houses and so on.
• Planning is the process of selecting objective
&determining the course of action required to
achieve these objective.
• Planning bridges the gap from where we are
and where we want to go.
Let us look at what the following observations
suggest about planning.
Planning is outlining a future course of action
in order to achieve an objective.
Planning is looking ahead.
Planning is getting ready to do something
tomorrow.
Some definition of planning.
Koontz & Donnell-Planning is deciding in
advance what to do, how to do it ,when to do it,
and who is to do it.Plan involve selecting
enterprise objective and determining ways of
achieving them.
Terry-Planning is the selecting and relating facts,
and using of assumptions regarding the future in
visualization and formulation of proposed
activities.
Haimann – Planning is deciding in advance what
is to be done . When manager plans, he projects
a course of action for the future, attempt to
achieve a desired results.
The Nature and purpose of planning
Nature of planning:
Planning –a primary function
Planning –a dynamic process
Planning-based on objective and policies
Planning – a selective process
Pervasiveness of planning
Planning – an intellectual process
Planning is directed towards efficiently
Planning –Focus with future activities
Flexibility of Planning
Planning based on facts
 Identification of Opportunities

Establishment of objective

Development planning premises

Identification of alternatives

Evaluation of alternative

Selecting an alternative

Formulating derivative plans

Establishing sequence of activities

Types of Plans
• Operational Plan-single use plan
• Tactical Plan-for lower level
• Strategic Plan –look ahead over the upcoming
• Contingency Plan-during time of crisis
Advantages and Limitation of Planning
Helps in achieving objective
Better utilization of resources
Economy in operation
• Reduces uncertainty and risk
• Improves competitive risk
• Effective control
• Coordination
• Encourages Motivation
• Guides in decision making
• Provides decentralization
• Improves effeiciency
Limitation of Planning:-
Lack of accurate information
Time & Cost
Inflexibility
Delay during emergency period
False sense of security
Objective
• Nature of objective
Objective are the aims, purposes or goals
that an organization want to achieve over
varying periods of time.
One of the reason for the success of any
organization is their ability to set and
periodically update objective in all the level of
management.
i)Objective have been hierarchy:-
Socio-economic purpose
Mission of Organization
Overall objective of organization
Objective in key result area
Division Objective
Departmental objective
Unit objective
Individual objective
ii)Objective form a network
iii)Multiplicity of objective
iv)Objective have a time span
 Guidelines for Objectives setting
Objective setting is a difficult task which
requires intelligent coaching by superior &
extensive practices by subordinates.
 Objective should cover main features of job
 Objective must be clearly specified in writing
 Objective must set by considering the various
factors affecting their achievement.
 Objective should clearly indicate the
organization mission.
 Objective should be challenging and
reasonable.
 Objective should yield specific result when
achieved.
 Objective should be co ordinated with these
of other manager & organizational unit.
 Objective should provide timely feedback so
that necessary correction action can be taken.
 Objective should periodically review.
 Objective should clearly indicate the resources
& authority required for achieving it.
 Area of Objective Setting
• Organization has to set objectives in many
area . The selective objective must meet the
following three criteria.
 Objective should be consistent with the
values of management in organization.
 Objective should pin point the
organization strength & weakness.
 Objective must satisfy the external
environmental forces.
• Marketing standing
• Innovations
• Productivity
• Resources – Physical and financial
• Profitability
• Manager performance & development
• Worker performance ,attitude and
development
• Public responsibility
 Benefits of Objective Setting
• It sets specific targets for the employee to
achieve which are linked to
business/development plan
• It state how the performance of the employee
is to be measured to assess progress
• It provides the direction for the employee.
• It increases staff motivation.
• It improve the communication among the all.
 SMART - Objectives
 S-Specific
 M-Measurable
 A-Achievable
 R-Relevant
 T-Time Bound
 Managing By Objectives(MBO)
• MBO was abstracted by peter.F.Druckaer and
was first put into practice by Harold smiddy –
He is a long time president of General Electric
company.
• MBO is a management system in which each
member of the organization effectively
participates and involves himself.
• George Odiorne-It is a process whereby the
superior and the subordinate managers of an
enterprise jointly identify its common goal.
• Koontz & Weihrich-MBO is a comprehensive
managerial system that integrates many key
managerial activities in a systematic manner.
we can understand that MBO is a process
whereby superiors and subordinates sit together
to identify the common objective and set the
results which are to be achieved by
subordinates.
 Features of MBO
• MBO focuses attention on what must be
accomplished and not how to accomplish the
objectives. It is goal oriented rather than work
oriented approach.
• It will lead to effective management
• MBO tries to combine the long – term goal to
short term goal of organization.
• MBO involves the participation of subordinate
mangers in the goal setting process.
• A high degree of motivation and satisfaction is
available to employee through MBO .
• Periodic review of performance
• MBO increases the organization capability of
achieving goals at all levels
• MBO emphasis is not only goals but also
effective performance.
• MBO is not a set of rules ,procedures.it is a
particular way of thinking about management.
 Process of MBO
• Setting the preliminary Objective
• Fixing key result area
• Setting subordinate objective
• Recycling objective
• Matching resources with objective
• Periodic performance reviews
• Appraisal
 Benefits of MBO
• Improvement of managing
• Clarification of organization
• Personnel satisfaction
• Team work
• Development of effective control
• Fast decision making
 Weakness of MBO
• Failure to teach the philosophy of MBO
• Failure to give guidelines to goals setters
• Difficulty of setting goals
• Emphasis on short term goals
• Danger of inflexibility
• Time consuming
• Increased paper work
Strategies, Policies & Planning Premises
• Nature and purpose of Strategies
According to Alfred D.Chandler, ‘Strategy is
determination of basic long – term objective and
adoption of course of action and allocation of resources
to achieve these goals”
A strategy may also be defined as a special type
of plan prepared for meeting the challenge posted by the
activities of competitors & other environmental factor.
• Nature of strategy:-
 It will be related to external environmental-
objective setting, action & resources required.
 It combination of internal & External factor ,Internal
–strength and weakness.
 Designed to meet demand on particular situation.
 May involve contradictory action.
 Forward looking, flexible & dynamic
 It is generally formulated by top level management
Need & Important of strategies:-
 It more helpful for facing environmental
challenges.
 It provides a long term guide towards the
achievement of objective.
 Ensure more efficient & effective utilization of
resources-time,money,manpower
 It facilitates the coordination control.
Strategic Planning Process:-
Mission & Objective, Environmental
analysis, Corporate analysis, Identification of
alternation, Review & control
Major Kind of strategies and Polices
Growth,Finance,Organization,Products and
services, Market
 Policies
According to the L.M.Prasad policy is the
statement or general understanding which
provide the guidance in decision making.
Weihrich & Koontz – Policies are general
statement of understanding which guide or
channel thinking in decision making
Nature of policy:-
 Relationship to organizational objective
 Clarity of policy
 A policy is a guide to thinking in decision
making
 Polices should be written
 Balance of policy
 Communication of policies
 Planned formulation
• Need or Importance or Purpose of policy:-
 To operationalize objective
 To save time and effort
 To facilitate delegation authority
 To speed up the decision making
 To control the administration
Types of Polices:-
• Formulation policies
• Apprealed policy
• Imposed Policy
• Implied Policy
• Written Policy
 Planning Premises
The assumption about future derivative
from forecasting and used in planning .It not
only assumption about the future, but also
predictions.
Classification of planning premises:
1. Internal and External premises
2. Tangible and intangible
3. Controllable and uncontrollable