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Effective Planning
1.
2.
3.
4. 1. PLANNING &
UNCERTAINTY
Major question:
How do I tend to
deal with
uncertainty, and
how can planning
help?
2.FUNDAMENTALS
OF PLANNING
Major Question:
What are mission
and vision
statements, and
what are three
types of planning
and goals?
3.PROMOTING GOAL
SETTING:
MANAGEMENT by
Objectives
Major Question:
What is MBO and
how can it be
implemented?
4.THE PLANNING/
CONTROL CYCLE
Major Question:
How does the
planning/ control
cycle help keep a
manager’s plans
headed in the
right direction?
5. - The Purpose of Planning is to help deal with uncertainty, both for the
organization and for your individual career.
-Do you have a sense of where you're going? No doubt what you're
looking for is something about which you say, "it's not just a job, it's a
career." Your career path is a sequence of jobs and occupations you
follow during your career.
-Michael J. Driver has suggested there are different possible career
paths, among them the linear career, the steady-state career, and the
spiral career.
• The linear career: climbing the stairs. The linear career resembles
the traditional view of climbing the stairs in the organization's hierarchy. That is,
you move up the organization in a series of jobs, generally in just one functional
area, such as finance- each of which entails more responsibility and requires
more skills. Of course, it's possible that a linear career will plateau. That is,
you'll rise to a certain level and then remain there; there will no further
promotions. Career plateaus actually happen a lot and need not signify
disgrace; they happen even to very successful managers.
Another possible, of course, is the declining career, in which a person reaches a
certain level and then after a time begins descending to the lower levels. This
could come about, for instance, because technology changes the industry
you're in.
• The steady-state career: staying put. Is almost opposite of linear
career: You discover early in life that you're comfortable with a certain
occupation and you stay with it. Or you accept a promotion for a while, decide
you don’t like the responsibility, and take a step down.
This kind of career is actually fairly commonplace: Sales representatives,
computer programmers, or physicians, for example, may decide they are happy
being "hand-on" professionals rather than managers.
• The spiral career: holding different jobs that build on one another.
The spiral career is, like the linear career, upwardly mobile. However, on this
career path, you would have a number of jobs that are fundamentally different yet still
build on one another, giving you more general experience and the skills to advance in
rank and status.
Of course, it's possible that you might (like some salespeople, actor, chefs,
or construction workers) favor a variant called transitory career. That is, you're the
kind of person who doesn't want the responsibility that comes with promotion. You're
a free spirit who likes the variety of experience that comes with continually shifting
sideways from job to job or place to place (or you're afraid of making the commitment
to doing any one thing).
A Variant is what is known as "portfolio career" or slash career," in which a
person puts together a portfolio of careers comprising multiple part- time jobs that,
when combined, are equivalent to a full-time position, such as Pilates instructor/art
dealer, attorney/minister, teacher/dancer/ puppeteer. And then, of course, there are
those who change ther professions entirely, perhaps by twitching departments within
their companies or by going back to school and retraining for something else.
6. - Planning , the first of four functions in the management process, involves
setting goals and deciding how to achieve them.
- Planning helps you check your progress, coordinate activities, think ahead,
and cope with uncertainty.
- Uncertainty is of three types- state, effect, and response. Organizations
respond to uncertainty in various ways.
-defined as setting goals and deciding how to achieve them.
-is coping with uncertainty by formulating future courses of action to achieve
specified results. When you make a plan , you make a blueprint for action that
describes what you need to do to realize your goals.
- is process that involves managers from all parts of the organization
- top managers, middle managers, and first-line managers
* in the formulation, implementation, execution of strategies and
strategic goals to advance the purposes of the organization.
* Thus, planning covers not only strategic planning (done by top
managers) but also tactical planning (done by the middle managers) and
operational planning (done by the first-line managers). Planning and strategic
management derive from an organization's mission and vision about itself.
7. 1. Establish the
organization
2. Formulate the
grand strategy
3. Formulate the
strategic plans, then
the tactical and
operational plans
4. Implement the strategic
plans
5. Control the
strategy
8. On the face of it, planning would seem to be a good idea- otherwise we
would not be devoting three chapters to the subject. But there are two
cautions to be aware of:
1.
time-starved managers may be quite resentful when superiors order
them to prepare a 5-year plan for their work unit.
Planning means that you must involve the subordinate you manage to
determine resources, opportunities, and goals. During the process, you
may need to go outside the work unit for information about products,
competitors, markets and the like.
9. How Planning Helps You: Fours Benefits
1. the preprinted score card
that golfers use when playing 18 holes of golf isn't blank. For each holes, the
card list the standard number of strokes ("par"), such as three or five, that a
good player should take to hit the ball from tee to the cup. The score card is
the plan for the game, with objectives for each hole. After you play the hole,
you write your own score in a blank space. At the end of the 18 holes, you
add all your scores to see how you performed compared with the standard for
the course.
-How well is your work going in a organization? You won't know
unless you have some way of checking your progress. That's why, like golfer,
you need to have some expectations of what you're supposed to do- in other
words, a plan.
2. Planning Helps You Coordinate Activities- " The right doesn't know what
the left is doing!" we may hear that expression used, for eample, when crisis
occurs and an organization's public relations department, legal department,
and CEO's office all give the press separate, contradictory statements.
Obviously, such an embarrassment can be avoided if the organization has a
plan for dealing with the media during emergencies. A plan defines the
responsibilities of various departments coordinates their activities for the
achievement of common goals- such as, at minimum, makingan organization
not look confused and disorganized.
10. 3. Planning Helps You Think Ahead- Alan R. Mulally, CEO of Ford Motor
Company, has big plans to restore Ford to its position as a leader in the global
auto industry. Those plans are embodied in the Ford Focus, described as
"Ford's first truly global car - a single vehicle designed and engineered for
customers in region of the world and sold under one name."
The small, fuel-efficient car is loaded with technology and safety features that
Mulally thinks will appeal to consumers in Europe, Asia, and Americas. His
management principles, instilled in the slogan " One Ford…One Team…One
Plan…One Goal," have already been demonstrated, first, in the Ford's shift
away from trucks and sport utility vehicles to cars, and second in dumping
luxury brands (Land Rover, Jaguar, Aston-Martin) that were distracting
management.
Similarly, the service or product with which you're engaged will probably at
some point reach maturity, and sales will begin to falter. Thus, you need to
look ahead, beyond your present phase of work, to try to be sure you'll be one
of the quick rather than one of the dead.
4. You don't care for unpleasant surprises? Most
people don't. (Pleasant surprises of course, are invariably welcome.) That'swhy tryingto plan for unpleasant
contingenciesis necessary. Planninghelps youdeal with uncertainty.
11. How do you personally respond to
uncertainty? Do you react slowly?
Conservatively? Proactively? Do you watch
to see what to see what others do?
Organizations act in similar ways.
Scholar Raymond E. Miles and Charles C. Snow suggest that organizations
adopt one of four approaches when responding to uncertainty in their
environment. they become Defender, Prospectors, Analyzers, or Reactors.
" Let's stick with What We Do Best, Avoid
Other Involvements" whenever you hear an organization's leader
say that " We're sticking with the basics" or " We're getting back to our
core business," that's the hallmark of a Defender Organization.
Defenders are expert at producing and selling narrowly defined
products or services. Often they are old-line successful enterprises,
such as Macy's and JCPenney, which in the 2010 era of consumer
frugality found themselves losing customers to dicounters like Walmart.
They do not tend to seek opportunities outside their present markets.
They devote most of their attention to making refinements in their
existing operations, such as slashing prices.
- " Let's Create Our Own Opportunities, Not Wait for Them to
Happen" A company described as " aggressive" is often a Prospector organization.
Prospectors focus on developing new products or services and in seeking out new
markets, rather than waiting for things to happen. Like 19th-century gold miners,
these companies are" prospecting" for new ways of doing things. The continual
product and market innovation has a price: Such companies may suffer a loss of
efficiency. Nevertheless, their focus on change can put fear in the hearts of
competitors. An example of a Prospector company is Gap, which announced it
would look for new sales by expanding abroad. Another such company is Apple.
Analyzers- " Let Others Take the Risks of Innovating and We'll Imitate
What Works Best" Analyzers take a "me too response to the world. By
and large, you won't find them called By and large, you won't find them
called trendsetters." Rather, Analyzers let other organizations take the
risks of product development and marketing and then imitate (or
perhaps slightly improve on) what seems to work best. For years,
Microsoft has been accused of taking this approach.
" Let's Wait Until There's a Crisis, Then We'll React" whereas the
prospector is aggressive and proactive, the Reactor is the opposite- passive and
reactive. Reactors make adjustments only when finally forced to by environmental
pressures. In the worst cases, they are so incapable of responding fast enough
that they suffer massive sales losses and are even driven out of business. Kmart,
for instance, failed to respond to Walmart's development of its distribution and
inventory management competencies, resulting in stalled growth and a significant
reduction in market share. Kmart's core business never recovered from this
reactive strategy. Now Sears, the shrinking retailer with which Kmart merged, is
trying to reconfigure itself in an age of iPhone apps and Twitter.
12. Miles and Snow also introduced the idea of the adaptive cycle, which portrays
business as continuously cycling through decisions about three kinds of
business problems: (1) entrepreneurial (2) engineering (3) administrative
Thus, a business that makes decisions in the entrepreneurial area that take it
in the direction of being a Prospector will in a short time also begin making
Prospector-oriented decisions in the engineering area, and so on. Thus, as
one scholar points out, "With enough cycles and insight, a given business
becomes a very good, comprehensively aligned Prospector, Analyzer, or
Defender. If a business lacks insight, or if it fails to take advantage of
alignment opportunities afforded by the adaptive cycle, it will be an
incongruent, poorly performing Reactor.
Red Bull- Austrian energy drink maker Red Bull, which was released into the
United States in 1997, believes in making unorthodox marketing moves, such
as creating a festival for homemade flying machines and building a half-pipe
for Olympic snowboarder Shaun White. In 2010, the company opened a $220
million soccer stadium in Harrison, New Jersey, as home for its recently
acquired Major League Soccer team, the New York Red Bulls. What strategy
type is being followed here?
13. Planning consists of translating an organization's mission into objectives. The
organization's purpose is expressed as a mission statement, and what it
becomes is expressed as a vision statement. From these are derived strategic
planning, then, tactical planning, then operational planning. This section also
discusses SMART goals- goals that are Specific, Measurable, Attainable,
Result-oriented, and have Target dates.
"Everyone wants a clear reason to get up in the morning" writes
journalist Dick Leider. "as Human we hunger for meaning and purpose in our
lives." And what is that purpose? Life never lacks purpose," says Leider. "
Purpose is innate- but it is up to each of us individually to discover or rediscover
it." An organization has a purpose, too- a mission. And manager must have an
idea of where they want the organization to go- a vision. The approach to
planning can be summarized in the following diagram, which shows how an
organization's mission becomes translated into objectives.
14. Mission
statement:
" what is our
reason for
being?"
Vision
statement: "
what do we
want to
become?"
Strategic
planning: done
by top managers
for the next 1-5
years
Tactical planning:
done by middle
managers for the next
6-24 months
Operational
Planning:
done by first-
line managers
for the next 1-
52 weeks
15. An organization's reason for being is expressed in a mission statement.
What the organization wishes to become is expressed in a vision
statement. From these are derived strategic planning, the tactical
planning, and finally operational planning. The purpose of each kind of
planning is to specify goals and action plans that ultimately pave the
way toward achieving an organization's vision.
Mission and Vision Statements
The planning process begins with two attributes: a mission statement
(which answers the question" What is our reason for being?") and a
vision statement (which answers the question" what do we want to
become?").
16. The mission statement- "What is our reason
for Being?" An organization's mission is its
purpose or reason for being. Determining the
mission is the responsibility of top management
and the board of directors. It is up to them to
formulate a mission statement, which express
the purpose of the organization.
" Only a clear definition of the mission and purpose
of the organization makes possible clear and
realistic…objectives, " said Peter Drucker. Whether
the organization is for-profit or nonprofit, the
mission statement identifies the goods or services
the organization provides and will provide.
Sometimes It also gives the reasons for providing
them(to make a profit or to achieve humanitarian
goals, for example).
Amazon. com's mission statement: " use the internet to offer
products that educate, inform, and inspire. We decided to
build an online store that would be customer friendly and
easy to navigate and would offer the broadest possible
selection… we believe that a fundamental measure of our
success will be the shareholder value we create over the long
term."
The vision Statement- " What Do We Want to Become?" A
vision is a long-term goal describing what an organization
wants to become. It is clear sense of the future and the
actions needed to get there. "Vision should describe what's
happening to the world you compete in and what you want
to do about it, " says one future article. " it should guide
decisions.
After formulating a mission statement , top managers need
to develop a vision statement, which expresses what the
organization should become, where it wants to go
strategically.
17. Amazon. com's statement: " Our vision is to earth's most customer-centric
company; to build a place where people can come to find and discover
anything they might want to but online.."
High
Low
B
A
Low Moderate
C
Impossible
Challenging
A. committed individuals with adequate ability
B. committed individuals who are working at
capacity
C. individual who lack commitment to high
goals
18. If too easy (as in "half the flight should arrive on time"), goals won't impel
people to make effort. If impossible ("all flights must arrive on time, regardless
of weather"), employees won't even bother trying. Or they will try and
continually fail, which end up hurting morale.
Result-oriented: Only a few goals be chosen- say, five for any work unit. And
they should be result- oriented- they should support the organization's vision.
In writing out goals, start with the word "To" and follow it with action-oriented
verbs- "complete," "acquired," increase" (" to decrease by 10% the time to get
passengers settled in their seats before departure").
Some verbs should not be used in your goal statement because they imply
activities- the tactics used to accomplish goals (such as having baggage
handlers waiting). For example, you should not use " to develop,"" to conduct,"
"to implement.“
Target dates: Goals should specify the target date or deadline dates when they
are to be attained. For example, it's unrealistic to expect an airline to improve
its on-time arrivals by 10% overnight. However, you could set a target date- 3 to
6 months away, say- by which this goal is to be achieved. That allows enough
time for lower-level managers and employees to revamp their systems and
work habits and gives them a clear time frame in which they know they are
expected to do.
19. Strategic goal
cutting costs and keeping fares
low is a key tactical goal for Southwest's middle
managers. For example, the organization cut costs in
its maintenance program by doing more work on a
plane when it's in for a check instead of bringing it in
three different times. In addition, it gets more use out of
its planes every day by limiting the turnaround time
between flights to 20 minutes, compared to up to an
hour for other airline.
Southwest also usually flies to less-congested airports,
thus saving time and money by avoiding traffic.
first-line managers also make sure
that seat assignments (boarding passes) are not given
out until an hour before the plane is due to leave to
make sure that the maximum number of passengers
will be on hand to fill the seats available. Recently,
Southwest has thrived on being the only U.S airline that
lets passengers check two pieces of luggage for free, a
policy that also helps lines move more briskly.
20.
21. Types of Plans: Standing Plans and Single- Use Plans
Plan Description
Standingplan foractivitiesthatoccurrepeatedlyoveraperiodoftime
Policy outlinesgeneralresponsetoadesignedproblemorsituation
Procedure outlinesresponsetoparticularproblemsorcircumstances
Rules designatesspecificrequiredaction
Single-useplan foractivitiesnotlikelytoberepeatedinthefuture
Program encompassesarangeofprojectoractivities
Project haslessscopeandcomplexitythanaprogram
Standing Plans: Policies, Procedures ad Rules- are
plans developed for activities that occur repeatedly
over a period of time. Standing plans consist of
policies, procedures, and rules.
• A policy is a standing plan that outlines the
general response to a designated problem or situation.
example: " this workplace does not condone swearing."
This policy is broad statement that gives managers a
general idea about what is allowable for employees
who use bad language, but gives no specifics.
• A procedure (or standard operating
procedure) is a standing plan that outlines the
response to particular problems or circumstances.
Example: white Castle specifies exactly how a
hamburger should be dressed, including the order in
which the mustard, ketchup, pickles are applied.
• A rule is a standing that designates specific
required action. Example: " No smoking is allowed
anywhere in the building." This allows no room for
interpretation.
Single- Use Plans: Programs and Projects
Single-use plans are plans developed for
activities that are not likely to be repeated
in the future. Such plans can be programs
or projects.
• A program is a single- use plan
encompassing a range of projects or
activities. Example : the U. S. government
space program (which was to be closed by
end of 2010) and several projects,
including the Challenger project and the
Hubble Telescope project.
• A project is a single -use plan
of less scope and complexity than a
program. Example: the space shuttle
Discovery was one project in the
government's space program.
22.
23. There are three types of
objectives:
1.IMPROVEMENT OBJCTIVES
PURPOSE Express performance to be
accomplished in a specific way for a
specific area.
Example: "increase sport- ulity sales by
10%." "reduced food spoilage by 15%.“
2.PERSONAL DEVELOPMENT
OBJECTIVES
PURPOSE Express personal goals to
be realized
Example: "attend 5 days of leadership
training". "learn basic of Microsoft Office
software by June 1."
3.MAINTENACE OBJECTIVES
PURPOSES Express the intention to
maintain performance at previously
established levels
Example: "Continue to meet the
increased sales goals specified last
quarter." "Produced another 60,000
cases of wine this month."
II. Development Action Plan
Once objectives are set, managers at
each level should prepare an action
plan for attaining them. Action plan may
be prepared for both individuals and for
work units, such as departments.
III. Periodically Review
Performance
You and your manager should
meet reasonably often- either
informally as needed or formally
every 3 months- to review
progress, as should you and your
subordinates. Indeed, frequent
communication is necessary so
that everyone will know how well
he or she is doing in meeting the
objectives.
During each meeting, ,managers
should give employees feedback,
and objectives should be updated
or revised as necessary to reflect
new realities. If you were
managing a painting or
landscaping business, for
example, changes in the weather,
loss of key employees, or a
financial downturn affecting
customer spending could force
you to reconsider your objectives.
IV. Give Performance Appraisal
and rewards,
If Any at the end of 6 or 12
months, you and your
subordinates should meet to
discuss results comparing
performance with initial
objectives. Deal with results, not
personalities, emotional issues,
or excuses.
Because of purpose
of MBO is to motivate
employees, performance that
meets the objectives should be
rewarded with compliments,
raises, bonuses, promotions, or
other suitable benefits. Failure
can be addressed by redefining
the objectives for the next 6 or
12 month period, or even by
taking stronger measures, such
as demotion. Basically, however,
MBO is viewed as being a
learning process. After step 4,
the MBO cycle begins anew.
24. Cascading Objectives: MBO from the Top Down
For MBO to be successful, three things have to happen:
I. Top Management Must Be Committed "When top-
management commitment [to MBO] was high," said one
review, "the average gain in productivity was 56%. When
commitment was low, the average gain in productivity was
only 6%.
2. It Must Be Applied Organization wide The program has to
be put in place throughout the entire organization. That is, it
cannot be applied in just some divisions and departments; it
has to be done in all of them.
3. Objectives Must "Cascade" MBO works by cascading
objectives down through the organization; that is, objectives
are structured in a unified hierarchy, becoming more
specific at lower levels of the organization. Top managers
set general
organizational objectives, which are translated into
divisional objectives, which are translated into departmental
objectives. The hierarchy ends in individual objectives set
by each employee.
The Importance of Deadlines
There's no question that college is a pressure cooker for
many students. The reason of course is the seemingly never-ending
deadlines. But consider: would you do all the course work you're doing
and realize the education you're getting if you didn't have deadlines?
As we saw under the "T" (for "has Target dates") in
SMART goals, deadlines are as essential to goal setting in business
as they are to your college career. Because the whole purpose of
planning and goals is to deliver to a client specified results within a
specified period of time, deadlines become a great motivator, both for
you and for the people working for you.
It's possible, of course, to let deadline mislead you into
focusing too much on immediate results and thereby ignore overall
planning just as students will focus too much on preparing for a test in
one course while neglecting others. In general, however deadlines can
help you keep your eye on the "big picture" while simultaneously
paying attention to the details that will help you realize the big picture.
Deadlines can help concentrate the mind, so that you make quick
decisions rather than put them off.
Deadlines helps you ignore extraneous matters (such as
cleaning up a messy desk) in favor of focusing on what's important
realizing the goals on time and on budget. Deadlines provide a
mechanism for giving ourselves feedback.
25.
26. THE PLANNING/CONTROL CYCLE
How does the planning/control
cycle helps you keep in control, to make
sure you're headed in the right direction.
Once you've made plans, how do you stay
in control to make sure you're headed in
the right direction? Actually, there is a
continuous feedback loop known as the
planning/control cycle. (The "organizing"
and "leading" steps within the Planning-
Organizing- Leading-Controlling sequence
are implied here.) The planning steps (1
and 2) and two control steps (3 and 4), as
follows: (1) Make the plan. (2) Carry out
the plan. (3) Control the direction by
comparing results with the plan. (4) Control
the direction by taking corrective action in
two ways-namely, (a) by correcting
deviations in the plan being carried out, or
(b) by improving future plan.
THE PLANNING/ CONTROL CYCLE
This describes a constant feedback loop
designed to ensure plans stay headed in
the right direction.
27.
28. Step I: The Plan
About 60% of all personal computers are bought by
corporate customers and other big technology purchasers.
Because of the hefty investment involved, these customers
favor suppliers that let them see major product plans a year in
advance. However, Steve Jobs has determined that he favors
selling technology directly to customers rather than to
corporate buyers and chief technology officers.
By keeping a new product secret, Apple, stimulates a
great deal of public curiosity. "There's a great deal of mystery
and speculation about what it will be," says one seasoned
marketing executive. "That's created a marketing aura for
them." Such was the plan, for example, when Apple and
Hewlett-Packard made a deal to repackage Apple's iPod digital
music player and sell it under the H-P label.
29. Step 2: Carrying Out the Plan
Following its plan to keep new products secret to
generate marketing buzz, Apple often didn't tell H-P
about new iPod models until the day before they were
introduced to the public. It also insisted that H-P work
on iPods under tight security, even though Apple's
versions were already displayed on store shelves.
The same has been true with other Apple
products, with employees being sworn to secrecy for
years. When, for example, the company decided to
open its own chain of retail stores, an exact replica of
a 6,000-square-foot store was built entirely inside a
sealed-off warehouse away from Apple's main
Cupertino, California, headquarters.
When Apple decided to switch to Intel
microprocessors, engineers worked on the project for
5 years under hush-hush conditions to adapt the
Macintosh operating system to intel chips.
30. Step 3: Comparing Results
The use of mystery "helps Apple attract crowds at its retail
store and generally garner much more visibility than its
relatively modest advertising budget would suggest, "Says a
Wall Street Journal story." While new wares from Dell Inc. or
H-P rarely get front- page treatment, Mr. Jobs has repeatedly
appeared on the covers of Time, Newsweek, and Fortune
showing off a new iPod or Macintosh computer."
The same was true in 2010, when Apple announced
its electronic tablet, the iPod. Secrecy was particular boon to
Apple's fast-growing iPod product line. Consumers showed
their willingness to abandon their old iPod in favor of newer
ones that Apple unveiled with great publicity and fanfare. (On
the negative side, Hewlett-Packard decided to terminate its
iPod partnership with Apple, in part because of the secrecy
issue.)
31. Step 4: Taking Corrective Action.
Leaks have occurred, and Apple has learned that secrecy
requires strong measures. Thus, Apple has fired and later
sued employees who leaked news about unannounced
products. It has even sued Web sited that have published
gossip about Apple products. The company also assigns
different departments dissimilar code names for the same
product, so it can easy track where leaks come from.
Employees are outfitted with special electronic badges that
grant them access only to specific areas within the fortress-
like Apple corporate headquarters.
YOUR CALL
Can you think of a more effective way to generate consumer
interest in a forthcoming product than just keep it secret?
What kind of planning/control cycle issues would it raise?