3 pom kc 6 sep. 2010


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3 pom kc 6 sep. 2010

  1. 1. Principles of Management<br />Planning & Organizing<br />
  2. 2. PLANNING<br />
  3. 3. Types of Plans<br />Specify actions toachieve tactical plans(very short-term)<br />OperationalPlans<br />Steps for achieving strategic objectives(usually one year or less)<br />TacticalPlans<br />StrategicPlans<br />Establish long-rangeobjectives<br />
  4. 4. Types of Plans<br />Mission / Purpose (Strategic Plans)<br />The ‘reason for existence’ of an organization<br />
  5. 5. Type of Plans <br />Objectives/ Goals<br />The end towards which activity of an organization is aimed, e.g.<br />For a Business enterprise – profit, surplus creation;<br />For an vocational NGO – to provide means of livelihood to maximum people in the area they are serving<br />Strategies<br />Determination of the long term objectives and adoption of a course of action<br />Gives a frame work for linked action-plans, communicated systematically to guide thinking and actions. <br />
  6. 6. Type of Plans <br />Policies<br />“Plans” that are general directional statements (or understandings) that guide/help in decision making:<br />Repeat decisions taken ‘reflexively’;<br />Delegation of tasks without loss of control<br />Some discretion is permissible depending on circumstances thus encouraging initiative within limits and situational adjustments;<br />Issues with “Policy”<br />Seldom documented in writing<br /> Subject to interpretations<br />
  7. 7. Type of Plans <br />Procedures<br />Plans that are chronological sequences of required actions: task-oriented in nature;<br />Cuts across department boundaries (sub-systems) in an organization: e.g. attendance, applying for leave<br />Procedures and policies are inter related: e.g. authorization for paid leave<br />Rules<br />Specific actions or non-actions allowing no discretion<br />What is acceptable and what is not?<br />
  8. 8. Type of Plans <br />Programmes<br />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;<br />Primary program may require supporting programs, spreading across the enterprise;<br />Perfect coordination between supporting & primary programs essential to avoid delays, unnecessary costs and expected roll-out.<br />Programs are a complex of (sub)goals, policies, rules and other elements necessary for the course of action e.g. obtaining ISO certification.<br />
  9. 9. Type of Plans <br />Budgets<br />A statement of expected results expressed in “Numerical terms” e.g. financial operating budget = “profit plan”;<br />Budgets enforce precision in thinking:<br />Making a budget is ‘planning’ by itself;<br />Encourages innovation – a “different” way to work<br />Budgets serve for ‘Control’:<br />Enforces discipline in execution of plans;<br />Instills cost consciousness;<br />Makes people (constantly) plan!<br />
  10. 10. Being aware of <br />challenges/<br />opportunity<br />Setting Goals/<br />Objectives<br />Planning premises<br />Identifying<br />alternatives<br />Market, Customer’s<br /> wants, Competition,<br />Own strengths<br /> & weakness <br />What to accomplish<br />& when<br />Internal & external<br />Environment/conditions <br />Formulating <br />Supporting<br />plans<br />Budgeting<br />(Quantifying Plans)<br />Comparing &<br /> choosing an<br />alternative<br />e.g., Sales budget<br />Operational Expense budget,<br />Capital expenditure budget<br />e.g., plan to buy<br />New machines, recruit & train<br />Employees, develop product etc<br />Decision<br />making<br />Steps in Planning<br />
  11. 11. Planning Period<br />Short term plans e.g. raw material buying plan in a factory<br />Long term plans e.g. product development plan, plant/production facility installation;<br />
  12. 12. Steps in Planning<br />Being aware of<br /> Opportunity<br />Setting Goals/<br />Objectives<br />Considering Market,<br />Competition, Customer’s<br /> wants, Own strengths<br />& weaknesses<br />What to accomplish<br />& when<br />Objective = Important end towards which activities<br /> are directed; therefore needs verification at the end<br /> of the plan period.<br />
  13. 13. Mission<br />Overall <br />Objectives &<br />Key Result Areas<br />Divisional Objectives<br />Departmental Objectives<br />Individual Objectives<br />Hierarchy of Objectives<br />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.<br />
  14. 14. Hierarchy of Objectives<br />The Organizational Objectives get trickled down into the objectives of :<br />Divisions Departments  Individual objectives;<br />The ‘cascade’ principle: seamless flow<br />Mutual support & interlocking of goals is essential<br />Managers must ensure that the components of the network fit each other;<br />Departments/divisions can be ‘blind-sided’<br />
  15. 15. Planning Premises & Strategies<br />Setting Goals/<br />Objectives<br />Planning premises<br />Identifying<br />alternatives<br />Comparing &<br /> choosing an<br />alternative<br />What to accomplish<br />& when<br />Decision<br />making<br />Internal & external<br />environment<br />Strategic Planning Process<br />Strategy= determination of the purpose / the basic long-term <br /> objectives; the adoption of courses of action and <br /> allocation of resources required to achieve the aims.<br />
  16. 16. Stakeholder<br />Wishes &<br />Shareholder<br />demands<br />Current<br />External<br />situation<br />External<br />Opportunity<br />& Threat<br />Forecast<br />External<br />situation<br />Management<br />Orientation<br />Enterprise<br />Profile<br />Key success factors & <br />Alternative Strategies<br />Purpose &<br />Major objectives<br />of enterprise<br />Current<br />resource<br />situation<br />Internal<br />Strengths &<br />Weakness<br />Strategic<br />choice<br />Planning Premises & Strategies<br />The Strategic Planning Process<br />
  17. 17. Planning Premises<br />Porter’s Five Forces : a <br />model for analysis of the<br />external influences <br />
  18. 18. Planning Premises: forecast of demand<br /><ul><li>Estimate of future demand is made by qualitative methods, time-series methods and/or causal methods:
  19. 19. Qualitative relies on judgment of experts to translate to quantities;
  20. 20. Time-series statistically interpolate demand on historical data;
  21. 21. Causal method  seek co-relation on cause and effect basis between two (or more) variables to quantify demand;
  22. 22. However, all forecasting methods are limited by:
  23. 23. Handling of un-quantifiable factors e.g. national pride
  24. 24. Unrealistic assumptions fuelled by a desire to succeed
  25. 25. Excessive data required (often unobtainable) to make accurate forecasts
  26. 26. Uncertainty with environmental changes: Technology, Govt. Policy, International alignments, New materials/sources, Climate etc.
  27. 27. Coping with uncertainties require:
  28. 28. Sensitivity analysis & “What if” scenarios (trust instinct!);
  29. 29. Planning for contingencies – with defined cut-in milestones.</li></li></ul><li>Planning Premises & Strategies<br />Comparing &<br /> choosing an<br />alternative<br />Decision<br />making<br />Formulating <br />Supporting<br />plans<br />Budgeting<br />(Quantifying Plans)<br />Say, Sales budget<br />Operational Expense budget,<br />Capital expenditure budget<br />Say, plan to buy<br />Equipment, recruit & train<br />Employees, develop product etc<br />Decision Making = is the core of the planning process; a plan<br /> does not come into being unless a ‘decision’ i.e. certain<br /> commitments of resources, managerial time and money<br /> are made and risks are taken.<br />
  30. 30. ORGANISING<br />
  31. 31. Organising<br />Organising is the process of defining and grouping activities and establishing authority relationships among them to attain organizational objectives.<br />
  32. 32. Importance of Organizing<br />Plan implementation<br />Assignment of authority, responsibility, and accountability<br />Division of work<br />Establish relationships among individuals, groups & departments<br />Allocation and deployment of organizational resources<br />
  33. 33. Chain of Command<br />AUTHORITY < RESPONSIBILITY<br />
  34. 34. Chain of Command<br />AUTHORITY > RESPONSIBILITY<br />
  35. 35. Chain of Command<br />AUTHORITY = RESPONSIBILITY<br />
  36. 36. Span of Control<br />Span of 8<br />(Classical)<br />Span of 4<br />(Contemporary)<br />
  37. 37. Classical Viewpoint<br />SPAN OF 8<br />Base level = 4096<br />Managers (levels 1-4) = 585<br />
  38. 38. Contemporary Viewpoint<br />SPAN OF 4<br />Base level = 4096<br />Managers (levels 1-6) = 1365<br />
  39. 39. Centralization & Decentralization<br />
  40. 40. Centralization & Decentralization<br />
  41. 41.
  42. 42.
  43. 43. Departmentalization<br />Putting specialists together<br />Direction of a manager<br />Departmentation<br />Process<br />Setting up and establishing departments<br />
  44. 44. Organizing Process<br />
  45. 45. Identify Activities<br />Production<br />Delivery<br />Selling<br />Maintaining Personnel<br />Training<br />Accounting<br />Advertising<br />Recruitment<br />Purchasing<br />Compensating<br />Budgeting<br />Quality Control<br />
  46. 46. Classify Activities in Departments<br />MARKETING<br />OPERATIONS<br />FINANCE<br />HUMAN RESOURCES<br />>Selling<br />>Advertising<br />>Delivery<br />>Production<br />>Purchasing<br />>Quality control<br />>Accounting<br />>Budgeting<br />>Compensating<br />>Recruitment<br />>Training<br />>Maintaining personnel<br />
  47. 47. Purpose of the Structure<br />Defines relationships between tasks and authority<br />Defines formal reporting relationships, levels of hierarchy, span of control<br />Defines individual departments<br />Defines systems that affects the organization<br />
  48. 48. Formal System<br />Planned structure<br />Lines of responsibility, authority, and position<br />Establish patterned relationships among components<br />Can be described through:<br />Organizational Chart<br />Policy Manual<br />Departments<br />
  49. 49. Informal System<br />Based on needs, sentiments, and interests of people<br />Vulnerable to expediency, manipulation and opportunism<br />More subtle and invisible in the organizational chart<br />Can be classified as:<br />Horizontal = same department or same level<br />Vertical = different levels<br />Mixed = combination of both<br />
  50. 50. Formal vs Informal Organizations<br />Not formally planned<br />Arise spontaneously as a result of interactions<br />Not depicted in a chart<br />Stressed by human relation theory<br />Have planned structure<br />Deliberate attempts to create patterned relationships<br />Usually shown by a chart<br />Advocated by traditional theory<br />FORMAL<br />INFORMAL<br />