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Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
Basics of Planning
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Basics of Planning

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  • 1. FOUNDATION OF PLANNINGChapter No. 07
  • 2. TOPICS TO BE COVERED…. What is Planning? What are types of Planning? Purpose of Planning Planning Performance Relationship Elements of Planning Types of Goals Level/Nature of Goals Types of Plans
  • 3. TOPICS TO BE COVERED…. What are SMART Goals? Goal Setting Process Concept of MBO
  • 4. WHAT IS PLANNING Planning A primary managerial activity that involves:• Defining the organization’s goals• Establishing an overall strategy for achieving those goals• Developing plans for organizational work activities.
  • 5. WHAT ARE TYPES OF PLANNING? Informal: not written down, short-term focus;specific to an organizational unit. Formal: written, specific, and long-termfocus, involves shared goals for theorganization
  • 6. PURPOSE OF PLANNING Provides direction Reduces uncertainty Minimizes waste and redundancy Sets the standards for controlling
  • 7. PLANNING PERFORMANCE RELATIONSHIP The Relationship Between Planning AndPerformance Formal planning is associated with: Higher profits and returns on assets. Positive financial results. The quality of planning and implementation affectsperformance more than the extent of planning. The external environment can reduce the impact ofplanning on performance, Formal planning must be used for several years beforeplanning begins to affect performance.
  • 8. ELEMENTS OF PLANNING Goals (also Objectives) Desired outcomes for individuals, groups, or entireorganizations Provide direction and evaluation performance criteria We may say that objectives are present part of long termgoals Plans Way or mean to do certain action. Predefined course of action to achieve organizational goals. Documents that outline how goals are to be accomplished Describe how resources are to be allocated and establish activity schedules
  • 9. TYPES OF GOALS Stated Goals versus Real Goals Broadly-worded official statements of theorganization (intended for public consumption)that may be irrelevant to its real goals (whatactually goes on in the organization).
  • 10. (McDonald’s Corporation)Execute strategic roadmap—“Plan to Win.”Grow the business profitably.Identify and develop diverse talent.Promote balanced, active lifestyles.
  • 11. LEVEL/NATURE OF GOALS1. Strategic Goals - What?Strategic decisions deal with the big picture of your business. The focus ofstrategic decisions is typically external to the business and usually futureoriented. Strategic decision-making creates the forward thrust in the business.It includes decisions about: What business are you in? What is your vision for the business? Whats your business identity? What do you stand for? Which direction is the business headed? How will the business compete? Corporations often capture their overall business strategy in a "Statement of Intent"and its an excellent term for describing what strategic decision-making is. Toooften people confuse strategic decisions with tactical decisions and fail to reallyexamine the big picture. It can lead to stagnation in the business and an inability tomove forward.
  • 12. 2. Tactical Goals - How?Tactical decisions involve the establishment of key initiatives to achievethe overall strategy. For example, if you have decided to be the Number1 provider in your market (a strategic decision) then you will developtactics (e.g. implement a marketing system, increase number oftherapists) to achieve that outcome. In a small business you may have 4or 5 key tactics that you are going to use to achieve your overallstrategy. Again this layer of decision-making can sometimes be overlooked yet it isthe glue that creates a strong connection between your long-term visionand your day-to-day activities. Tactical decision-making is the domain ofmission statements. Think in terms of the battlefields from which the term has emerged. Theoverall strategy, that is, what the army is there to do, is to win the war. Thenyou have a number of missions you send troops on, preferably diplomaticones, the cumulative effect of which is intended to win the war.
  • 13. 3. Operational Goals - How will we deploy resources?‘Operational decisions determine how activities actually get done. Theyare the grass roots decisions about who is going to do what andwhen. It includes: How will we spend our money this month? How will we service that client? What is our procedure for delivering an order? Who will be doing quality control? SOPs If you are making decisions involving processes and procedures theyare usually operational decisions. Operational decisions are oftenmade in real time and are the result of needing to make quickadjustments or change to achieve the desired outcome.
  • 14. TYPES OF PLANS
  • 15.  Strategic Plans Apply to the entire organization. Establish the organization’s overall goals. Seek to position the organization in terms of itsenvironment. Cover extended periods of time. Operational Plans Specify the details of how the overall goals are to beachieved. Cover short time period.
  • 16.  Long-Term Plans Plans with time frames extending beyond three years Short-Term Plans Plans with time frames on one year or less Specific Plans Plans that are clearly defined and leave no room forinterpretation Directional Plans Flexible plans that set out general guidelines, providefocus, yet allow discretion in implementation.
  • 17.  Single-Use Plan A one-time plan specifically designed to meet theneed of a unique situation. Standing Plans Ongoing plans that provide guidance for activitiesperformed repeatedly.
  • 18. WHAT ARE SMART GOALS? The acronym SMART stands forspecific, measurable, attainable, relevant andtimely. Using SMART creates a clear-cut path topreset goals. With a defined timeline to achievethe SMART standards, businesses are able toplan their future by examining the past.Through planning and organization.
  • 19. S Specific Smart goals are specificenough to suggest action.Save enough money to geta refrigerator, not justsave money.M Measurable You need to know whenyou’ve achieved your goal,or how close you are.Goals which arentmeasurable, like "Id liketo have more money," aremuch harder to achieve -and you dont even knowwhen you get there.A refrigerator costs $600,and you have $300already saved.A Attainable The steps towardreaching your goal needto be reasonable andpossible.I know I can save enoughmoney each week toarrive at my goal withinone year.R Relevant The goal needs to makecommon sense. You dontwant to struggle or worktoward a goal that doesntfit your need.You dont need to savemoney for 18 pairs ofshoes.T Time Bound Set a definite target date. The repairman says myrefrigerator wont lastanother year. I need anew fridge in the next sixmonths.
  • 20. GOAL SETTING PROCESS1. 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?
  • 21. CONCEPT OF MBOManagement By Objectives (MBO) Specific performance goals are jointly determinedby employees and managers. Progress toward accomplishing goals isperiodically reviewed. Rewards are allocated on the basis of progresstowards the goals. Key elements of MBO: Goal specificity, participative decision making, anexplicit performance/evaluation period, feedback
  • 22. STEPS IN A TYPICAL MBO PROGRAM1. The organization’s overall objectives and strategies are formulated.2. Major objectives are allocated among divisional and departmentalunits.3. Unit managers collaboratively set specific objectives for their unitswith their managers.4. Specific objectives are collaboratively set with all departmentmembers.5. Action plans, defining how objectives are to be achieved, are specifiedand agreed upon by managers and employees.6. The action plans are implemented.7. Progress toward objectives is periodically reviewed, and feedback isprovided.8. Successful achievement of objectives is reinforced by performance-based rewards.

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