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planning

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  • 1. PLANNING Source: Principles of Management By TRIPATHI & REDDY 2 UNIT
  • 2. OBJECTIVE OF STUDY <ul><li>Nature and Purpose of Planning. </li></ul><ul><li>Importance of Planning. </li></ul><ul><li>Forms of Planning. </li></ul><ul><li>Types of Plans. </li></ul><ul><li>Steps in Planning. </li></ul><ul><li>Limitation of Planning. </li></ul>
  • 3. Nature and Purpose of Planning <ul><li>Beginning of the process of management. </li></ul><ul><li>Planning is an intellectual process . </li></ul><ul><li>Decision Making is an integral part of planning. </li></ul><ul><li>Manager has to decide on Goals, assumption, resource </li></ul><ul><li>Planning is a continuous process. </li></ul><ul><li>( principle of navigational change ) </li></ul><ul><li>Plan must be flexible. </li></ul><ul><li>Flexibility in FIVE major areas </li></ul><ul><li>Technology, Market ,Finance, Personnel and organization </li></ul><ul><li>Planning is an all-pervasive function. </li></ul>
  • 4. Importance of Planning <ul><li>Minimizes Risk and Uncertainty </li></ul><ul><li>Leads to success </li></ul><ul><li>Focuses attention on the organization’s goals </li></ul><ul><li>Facilitates Control </li></ul>
  • 5. Forms of Planning <ul><li>Strategic Planning </li></ul><ul><li>1. Decides major goals and policies of allocation of resources to achieve the goals. </li></ul><ul><li>2.Done at the HIGHER level of management </li></ul><ul><li>3. It is LONG-TERM </li></ul><ul><li>4.Generally based ON LONG-TERM FORECAST about technology, political environment and is more certain. </li></ul><ul><li>Tactical Planning </li></ul><ul><li>1 . Decides the detailed use of resources for achieving each goals. </li></ul><ul><li>2.Done at the LOWER level of management </li></ul><ul><li>3. It is SHORT-TERM </li></ul><ul><li>4.Generally based PAST PERFORMANCE of the organization and is less uncertain. </li></ul>
  • 6. Forms of Planning <ul><li>Strategic Planning </li></ul><ul><li>5. It is less detailed because it is not involved with the day-to-day operations of the organisation.. </li></ul><ul><li>Tactical Planning </li></ul><ul><li>5. It is more detailed because it is involved with the day-to-day operations of the organisation.. </li></ul>
  • 7. Types Of Plan Objectives Strategies Single-Use Plan (Programmes and Budgets) Standing Plan (Policies ,Procedures, Methods and Rules) For Non-repetitive Activities For Repetitive Activities
  • 8. Objectives <ul><li>Objectives are the goals which the management wishes the organization to achieve. ( Specific Targets ) </li></ul><ul><li>Objective should be distinguished from other words “Vision”, ”Purpose” and “Mission” </li></ul><ul><li>Vision: is the dream that an entrepreneur creates in his /her waking hours of his/her preferred future. </li></ul><ul><li>Purpose: The primary role defined by the society in which it operates. ( Broad Aim ) </li></ul><ul><li>Mission: It is the unique aim that sets the organisation apart from others of its types. (specialization) </li></ul>
  • 9. Characteristics of Objectives <ul><li>Objectives are multiple in number. </li></ul><ul><li>( Market standing,innovation,prductivity,profitability, manager performance and development,workers performance and attitude, Public responsibility) </li></ul><ul><li>Objectives are either tangible or intangible. </li></ul><ul><li>Objectives have a priority. </li></ul><ul><li>E. g.: Finance department, University </li></ul><ul><li>Objectives are generally arranged in hierarchy </li></ul><ul><li>(Corporate Objectives, divisional objectives, section objective, individual objectives) </li></ul><ul><li>Objectives sometimes clashes with each other </li></ul>
  • 10. Requirement of sound objectives <ul><li>Objectives must be both clear and acceptable </li></ul><ul><li>Objectives must support one another </li></ul><ul><li>(T here must be close-Knit between long-range and short term objectives ) </li></ul><ul><li>Objectives must be precise and measurable </li></ul><ul><li>Objectives should always remain valid </li></ul>
  • 11. Advantage of objectives <ul><li>Provide basis for planning </li></ul><ul><li>Acts as a motivators for individuals and department. </li></ul><ul><li>Eliminates haphazard actions </li></ul><ul><li>Facilitates the coordinated behavior of various groups. </li></ul><ul><li>It functions as a basis for managerial control </li></ul><ul><li>Facilitate the better management of the enterprise </li></ul><ul><li>Lessen the misunderstanding and conflicts and facilitate the communication </li></ul><ul><li>Provide legitimacy of organization's activities </li></ul>
  • 12. Strategies <ul><li>Two important activities involved in strategy formulation are…. </li></ul><ul><li>Environmental appraisal </li></ul><ul><li>Political and legal factors </li></ul><ul><li>Economic factors </li></ul><ul><li>( level of eco development & distribution of income, trend in prices ,exchange rate ,BOP, supply of labour, material, capital ) </li></ul><ul><li>Competitive factors </li></ul><ul><li>Social and cultural factors </li></ul><ul><li>Corporate Appraisal </li></ul><ul><li>( leadership, excellent product design, efficient distribution and customer service, logistics, effective sales promotion, ability to influence legislation ) </li></ul>
  • 13. Single-Use Plan ( Non-Repetitive Activities ) <ul><li>Single-use plans are developed to achieve a specific ends; when that end is reached ,then the plan is dissolved. </li></ul><ul><li>Programmes: are the precise plan or definite steps in proper sequence which needs to be taken to discharge a given task. </li></ul><ul><li>E.g. Introducing new product in market, deputing employees for training </li></ul><ul><li>(Ingredients of Programme: time phasing and Budgeting) </li></ul><ul><li>Budgets: It is the plan for the future period of time containing the statements of expected results in numerical terms. </li></ul><ul><li>E.g. Sales Budget, Production budget, Cash Budget, Revenue and expenses budget </li></ul>
  • 14. Standing Plan <ul><li>There are Four Types of Standing Plan </li></ul><ul><li>(A) Policies </li></ul><ul><li>(B) Procedures </li></ul><ul><li>(C) Methods </li></ul><ul><li>(D) Rules </li></ul>
  • 15. (A) Policy <ul><li>“ Policy is a verbal, written, implied overall guide, setting up boundaries that supply the general limits and direction in which the managerial actions will takes place “ . -George R Terry </li></ul><ul><li>Advantages of Policy </li></ul><ul><li>1. Ensure the Uniformity of actions in respects of various matters at various organizational points. </li></ul><ul><li>2. Speed up the decisions at the lower levels </li></ul><ul><li>3.It is easier to delegate the authority to the subordinates </li></ul><ul><li>4. Policies give a practical shape to the objectives by elaborating and directing the way in which the predetermined objectives are to be attained </li></ul>
  • 16. Types of Policy <ul><li>On the basis of sources </li></ul><ul><li>1. Originated Policies </li></ul><ul><li>2. Appealed Policies </li></ul><ul><li>3. Implied Policies </li></ul><ul><li>4.Externally imposed Policies </li></ul><ul><li>On the basis of functions </li></ul><ul><li>On the basis of organizational level </li></ul><ul><li>( Major Company policies, Minor derivative policy applicable to segments ) </li></ul>
  • 17. Guideline for effective policy-making <ul><li>Should be in writing and understood by all. </li></ul><ul><li>Reflects the objectives of organization , define method and action. </li></ul><ul><li>Top managers and Subordinates should participate in its formulation </li></ul><ul><li>Must strike a balance between stability and flexibility. </li></ul><ul><li>Policies should not pull in different directions </li></ul><ul><li>Should not be detrimental to the interest of society </li></ul><ul><li>Should cover as many contingencies as possible </li></ul><ul><li>Policies should be periodically reviewed </li></ul>
  • 18. Procedures <ul><li>Policies </li></ul><ul><li>Guide to both thinking and actions of people at higher level </li></ul><ul><li>Helps in fulfilling the objectives </li></ul><ul><li>are broad and allow some discretion </li></ul><ul><li>Often established without any detailed study </li></ul><ul><li>Procedure </li></ul><ul><li>Guide to action only for people at lower level </li></ul><ul><li>Shows the way to implement the policies </li></ul><ul><li>Are specific and lay down the sequence of definite act </li></ul><ul><li>Often established after thorough study and analysis of work </li></ul>A Procedure Provides a detailed set of instructions for performing a sequence of actions involved in doing a certain piece of work
  • 19. Advantages & Limitation of Procedure <ul><li>Advantages </li></ul><ul><li>Standard way of performing a task </li></ul><ul><li>Work simplification and elimination of unnecessary steps </li></ul><ul><li>Facilitates control over performance </li></ul><ul><li>Enable the employee to improve their efficiency </li></ul><ul><li>Limitation </li></ul><ul><li>Limits the scope for innovation </li></ul>
  • 20. Methods and Rules <ul><li>Methods: </li></ul><ul><li>Prescribed way in which one step of a procedure it to be performed. </li></ul><ul><li>It helps in increasing the effectiveness and usefulness of procedure. </li></ul><ul><li>Rules: </li></ul><ul><li>Detailed or recorded that a specific actions must /must not be performed in a given situations. </li></ul><ul><li>e.g. Sanctioning overtime, travelling allowance ,Uniform way of handling employee </li></ul>
  • 21. Steps in Planning <ul><li>1. Establishing verifiable goals or set the goals to be achieved. </li></ul><ul><li>2. Establishing Planning premises. </li></ul><ul><li>3. Deciding the planning period. </li></ul><ul><li>4. Finding alternative courses of action. </li></ul><ul><li>5. Evaluating and selecting a course of action. </li></ul><ul><li>6. Developing derivative plans. </li></ul><ul><li>7. Measuring and controlling the progress. </li></ul>
  • 22. STEP 1. Set the goals to be achieved <ul><li>Desired sales volume or sales growth </li></ul><ul><li>Development of a NEW product </li></ul><ul><li>More abstract goals like becoming more popular in the community. </li></ul><ul><li>Setting the goals will depend on a number of factor… </li></ul><ul><li>1.Mission </li></ul><ul><li>2. Value </li></ul><ul><li>3. Actual and potential abilities of the organisation </li></ul>
  • 23. STEP 2. Establishing Planning Premises <ul><li>Planning Premises: assumptions about the future </li></ul><ul><li>(A) Internal and External Premises. </li></ul><ul><li>(B) Tangible and Intangible Premises. </li></ul><ul><li>(C) Controllable and Non-controllable Premises. </li></ul>
  • 24. Steps 3: Deciding the planning period <ul><li>Factor influencing the choice of the period… </li></ul><ul><li>(A) Lead time in development and commercialization of a new product </li></ul><ul><li>(B) Time Required to recover the capital investments or the pay back period. </li></ul><ul><li>(C) Length of the commitment already made. </li></ul>
  • 25. <ul><li>Steps 4: Finding the alternative courses of action </li></ul><ul><li>E.g. Technological Know-How, Product distribution </li></ul><ul><li>Steps 5: Evaluating and selecting the best course of action </li></ul><ul><li>Steps 6: Developing the derivatives Plan </li></ul><ul><li>Derivative Plan: Broad goals must be translated into day-to-day operations of the organization. </li></ul><ul><li>Steps 7: Measuring and controlling the progress </li></ul>
  • 26. Limitation of Planning <ul><li>1. Planning is an expensive and time-consuming process. </li></ul><ul><li>2. Planning sometimes restricts the organization to the rational and risk-free opportunities. </li></ul><ul><li>3. The scope of planning is limited in organization with rapidly changing situations. </li></ul><ul><li>4. Flexibility of planning can not be maintained. </li></ul><ul><li>5. Difficulty of formulating accurate premises. </li></ul><ul><li>6. Planning may sometimes face peoples resistance to it. </li></ul>
  • 27. Thank You

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