3 pom kc 6 sep. 2010
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3 pom kc 6 sep. 2010 3 pom kc 6 sep. 2010 Presentation Transcript

  • Principles of Management
    Planning & Organizing
  • PLANNING
  • Types of Plans
    Specify actions toachieve tactical plans(very short-term)
    OperationalPlans
    Steps for achieving strategic objectives(usually one year or less)
    TacticalPlans
    StrategicPlans
    Establish long-rangeobjectives
  • Types of Plans
    Mission / Purpose (Strategic Plans)
    The ‘reason for existence’ of an organization
  • Type of Plans
    Objectives/ Goals
    The end towards which activity of an organization is aimed, e.g.
    For a Business enterprise – profit, surplus creation;
    For an vocational NGO – to provide means of livelihood to maximum people in the area they are serving
    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 and actions.
  • Type of Plans
    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
  • Type of Plans
    Procedures
    Plans that are chronological sequences of required actions: task-oriented in nature;
    Cuts across department boundaries (sub-systems) in an organization: e.g. attendance, applying for leave
    Procedures and policies are inter related: e.g. authorization for paid leave
    Rules
    Specific actions or non-actions allowing no discretion
    What is acceptable and what is not?
  • Type of Plans
    Programmes
    Action plans (mainly non-routine or for changed activities) including, task assignments, steps to be taken, resources to be deployed etc. to achieve a (new/renewed) goal;
    Primary program may require supporting programs, spreading across the enterprise;
    Perfect coordination between supporting & primary programs essential to avoid delays, unnecessary costs and expected roll-out.
    Programs are a complex of (sub)goals, policies, rules and other elements necessary for the course of action e.g. obtaining ISO certification.
  • Type of Plans
    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 innovation – a “different” way to work
    Budgets serve for ‘Control’:
    Enforces discipline in execution of plans;
    Instills cost consciousness;
    Makes people (constantly) plan!
  • Being aware of
    challenges/
    opportunity
    Setting Goals/
    Objectives
    Planning premises
    Identifying
    alternatives
    Market, Customer’s
    wants, Competition,
    Own strengths
    & weakness
    What to accomplish
    & when
    Internal & external
    Environment/conditions
    Formulating
    Supporting
    plans
    Budgeting
    (Quantifying Plans)
    Comparing &
    choosing an
    alternative
    e.g., Sales budget
    Operational Expense budget,
    Capital expenditure budget
    e.g., plan to buy
    New machines, recruit & train
    Employees, develop product etc
    Decision
    making
    Steps in Planning
  • Planning Period
    Short term plans e.g. raw material buying plan in a factory
    Long term plans e.g. product development plan, plant/production facility installation;
  • Steps in Planning
    Being aware of
    Opportunity
    Setting Goals/
    Objectives
    Considering Market,
    Competition, Customer’s
    wants, Own strengths
    & weaknesses
    What to accomplish
    & when
    Objective = Important end towards which activities
    are directed; therefore needs verification at the end
    of the plan period.
  • Mission
    Overall
    Objectives &
    Key Result Areas
    Divisional Objectives
    Departmental Objectives
    Individual Objectives
    Hierarchy of Objectives
    Objectives set end results – they need to be supported by a hierarchy of sub-objectives, duly networked through the organization to avoid discord and wasted effort.
  • Hierarchy of Objectives
    The Organizational Objectives get trickled down into the objectives of :
    Divisions Departments  Individual objectives;
    The ‘cascade’ principle: seamless flow
    Mutual support & interlocking of goals is essential
    Managers must ensure that the components of the network fit each other;
    Departments/divisions can be ‘blind-sided’
  • Planning Premises & Strategies
    Setting Goals/
    Objectives
    Planning premises
    Identifying
    alternatives
    Comparing &
    choosing an
    alternative
    What to accomplish
    & when
    Decision
    making
    Internal & external
    environment
    Strategic Planning Process
    Strategy= determination of the purpose / the basic long-term
    objectives; the adoption of courses of action and
    allocation of resources required to achieve the aims.
  • Stakeholder
    Wishes &
    Shareholder
    demands
    Current
    External
    situation
    External
    Opportunity
    & Threat
    Forecast
    External
    situation
    Management
    Orientation
    Enterprise
    Profile
    Key success factors &
    Alternative Strategies
    Purpose &
    Major objectives
    of enterprise
    Current
    resource
    situation
    Internal
    Strengths &
    Weakness
    Strategic
    choice
    Planning Premises & Strategies
    The Strategic Planning Process
  • Planning Premises
    Porter’s Five Forces : a
    model for analysis of the
    external influences
  • Planning Premises: forecast of demand
    • Estimate of future demand is made by qualitative methods, time-series methods and/or causal methods:
    • Qualitative relies on judgment of experts to translate to quantities;
    • Time-series statistically interpolate demand on historical data;
    • Causal method  seek co-relation on cause and effect basis between two (or more) variables to quantify demand;
    • However, all forecasting methods are limited by:
    • Handling of un-quantifiable factors e.g. national pride
    • Unrealistic assumptions fuelled by a desire to succeed
    • Excessive data required (often unobtainable) to make accurate forecasts
    • Uncertainty with environmental changes: Technology, Govt. Policy, International alignments, New materials/sources, Climate etc.
    • Coping with uncertainties require:
    • Sensitivity analysis & “What if” scenarios (trust instinct!);
    • Planning for contingencies – with defined cut-in milestones.
  • Planning Premises & Strategies
    Comparing &
    choosing an
    alternative
    Decision
    making
    Formulating
    Supporting
    plans
    Budgeting
    (Quantifying Plans)
    Say, Sales budget
    Operational Expense budget,
    Capital expenditure budget
    Say, plan to buy
    Equipment, recruit & train
    Employees, develop product etc
    Decision Making = is the core of the planning process; a plan
    does not come into being unless a ‘decision’ i.e. certain
    commitments of resources, managerial time and money
    are made and risks are taken.
  • ORGANISING
  • Organising
    Organising is the process of defining and grouping activities and establishing authority relationships among them to attain organizational objectives.
  • Importance of Organizing
    Plan implementation
    Assignment of authority, responsibility, and accountability
    Division of work
    Establish relationships among individuals, groups & departments
    Allocation and deployment of organizational resources
  • Chain of Command
    AUTHORITY < RESPONSIBILITY
  • Chain of Command
    AUTHORITY > RESPONSIBILITY
  • Chain of Command
    AUTHORITY = RESPONSIBILITY
  • Span of Control
    Span of 8
    (Classical)
    Span of 4
    (Contemporary)
  • Classical Viewpoint
    SPAN OF 8
    Base level = 4096
    Managers (levels 1-4) = 585
  • Contemporary Viewpoint
    SPAN OF 4
    Base level = 4096
    Managers (levels 1-6) = 1365
  • Centralization & Decentralization
  • Centralization & Decentralization
  • Departmentalization
    Putting specialists together
    Direction of a manager
    Departmentation
    Process
    Setting up and establishing departments
  • Organizing Process
  • Identify Activities
    Production
    Delivery
    Selling
    Maintaining Personnel
    Training
    Accounting
    Advertising
    Recruitment
    Purchasing
    Compensating
    Budgeting
    Quality Control
  • Classify Activities in Departments
    MARKETING
    OPERATIONS
    FINANCE
    HUMAN RESOURCES
    >Selling
    >Advertising
    >Delivery
    >Production
    >Purchasing
    >Quality control
    >Accounting
    >Budgeting
    >Compensating
    >Recruitment
    >Training
    >Maintaining personnel
  • Purpose of the Structure
    Defines relationships between tasks and authority
    Defines formal reporting relationships, levels of hierarchy, span of control
    Defines individual departments
    Defines systems that affects the organization
  • Formal System
    Planned structure
    Lines of responsibility, authority, and position
    Establish patterned relationships among components
    Can be described through:
    Organizational Chart
    Policy Manual
    Departments
  • Informal System
    Based on needs, sentiments, and interests of people
    Vulnerable to expediency, manipulation and opportunism
    More subtle and invisible in the organizational chart
    Can be classified as:
    Horizontal = same department or same level
    Vertical = different levels
    Mixed = combination of both
  • Formal vs Informal Organizations
    Not formally planned
    Arise spontaneously as a result of interactions
    Not depicted in a chart
    Stressed by human relation theory
    Have planned structure
    Deliberate attempts to create patterned relationships
    Usually shown by a chart
    Advocated by traditional theory
    FORMAL
    INFORMAL