Chapter 3 focuses on the significance and elements of planning in management, defining it as the process of setting objectives and determining actions to achieve them. It outlines the components of planning such as mission, objectives, strategies, policies, and types of plans including strategic, tactical, and operational plans. The chapter also discusses the management by objectives approach and the decision-making process, highlighting the characteristics, types, and conditions of decision-making.

1. CHAPTER 3
PLANNING
• Presented By
• Dr. VENKATESHWAR RAO
Professor- Department of Management

2. Introduction
• Planning is the first task of a management and
forms the basis from which all the other tasks
are derived.
• Planning is deciding what objectives to
accomplish, the actions to be taken in order to
achieve them, the organizational position
assigned to do them and who would be
responsible for the actions needed.
• Koontz O’Donnell - "Planning is an intellectual
process, the conscious determination of
courses of action, the basing of decisions on
purpose, acts and considered estimates".
• planning is deciding in the present, what is to be
done in future

3. NATURE AND PURPOSE OF PLANNING
• 1. Planning is goal-oriented
• 2. Primacy of Planning:
• 3. Pervasiveness of Planning:
• 4. Efficiency, Economy and Accuracy
• 5. Co-ordination:
• 6. Limiting Factors:
• 7. Flexibility:
• 8. Planning is an intellectual process:

4. IMPORTENCE OF PLANNING
• 1. To manage by objectives
• 2. To offset uncertainty and change
• 3. To secure economy in operation
• 4. To help in co-ordination
• 5. To make control effective
• 6. To increase organizational
effectiveness

5. FEATURES OF PLANNING
1. It is primary function of
management.
2. It is an intellectual process
3. Focuses on determining the
objectives
4. Involves choice and decision
making
5. It is a continuous process
6. It is a pervasive function.

6. COMPONENTS OF PLANNING
i)Mission: The mission is a statement that reflects the
basic purpose and focus of the organization which
normally remain unchanged.
ii) Objectives-Goals :Both goal and objective can be defined
as statements that reflect the end towards which the
organization is aiming to achieve.
goal is an abstract and general - Objectives are statements
that describe-in precise, measurable, and obtainable
terms.
iii) Strategies: Strategy is the determination of the basic
long term objectives of an organization and the adoption
of action and collection of action and allocation of
resources necessary to achieve these goals.

7. COMPONENTS OF PLANNING
iv) Policy: A policy provides a broad guideline for
managers to follow when dealing with important
areas of decision making. Policies are general
statements that explain how a manager should
attempt to handle routine management
responsibilities.
v) Procedure: A procedure is a set of step-by-step
directions that explains how activities or tasks
are to be carried out.
vi) Programme: Programme consists of an ordered
list of events to be followed to execute a project.
vii) Budget: A budget predicts sources and
amounts of income and how much they are used
for a specific project.

8. TYPES OF PLANS
There are various types of plans which can be
categories on the basis of
I. Scope of plans
II. Operational of plans
III. Time period of plans
IV. Levels of plans.
I.SCOPE OF PLANS
• Strategic plans - These are broad plans
developed by top managers to guide the general
direction of the firm.
• Tactical plans - They have a moderate scope
and immediate timeframe. They are concerned
with how to implement the strategic plans that
are already developed.

9. TYPES OF PLANS
II. OPERATIONAL PLANS
They have the narrowest focus and they fall into
many types. They include:
• Standing plan- these are developed to handle
recurring and relatively routine situations.
When the same situations occur repeatedly,
managers have to develop policies, rules and
standard operating procedures to control the
way employees perform their tasks.
• Single use plans – these are developed to
handle non-programmed decision making in an
unusual or unique situation, e.g. specific
action plan to complete a project or
programme.

10. TYPES OF PLANS
III. TIME PERIOD OF PLANS
• Long-range plans – covers time periods
from 5 years. They are mostly associated
with activities such as major expansion of
facilities, development of top managers,
change of manufacturing systems etc.
• Intermediate plans – they are less than
five years and because of the uncertainty
associated with long-range plans.
• Short range plans – These cover time
periods of one year or less. They focus on
day to day activities.

11. TYPES OF PLANS
IV.LEVELS OF PLANNING
• Corporate level Plans: The corporate level
plan contains top management decisions
pertaining to the organization’s mission
and goals, overall strategy and structure.
• Business level Plans: states the methods
the division or business it intends to use
to compete against its rivals in an
industry.
• Functional level Plans: These set out the
actions managers intend to take at the
level of departments.

12. PLANNING PROCESS/ STEPS IN PLANNING
1. Perception of Opportunities
2. Establishing Objectives:
3. Considering the Planning Premises:
4. Identification of alternatives
5. Evaluation of alternatives
6. Choice of alternative plans
7. Formulating of Supporting Plans
8. Establishing sequence of activities

13. MANAGEMENT BY OBJECTIVES (MBO)
– In 1957, Douglas McGregor suggested a new
approach to performance appraisal based on
the MBO concept.
– Research has shown that specific objectives
are related to higher performances as in
studies on goal setting by individuals.
• Goal setting is an element in employee
motivation.
• MBO – is a technique designed to achieve
the integration of individual and
organizational goals.

14. The Process of MBO
• Planning premises should have support of top
management and subordinates should
understand the process.
• Subordinates should have clear
understanding of Org. purpose, mission, goals
and strategies.
• Initial discussion between managers and
subordinates to formulate goals.
• Check points established to measure
progress.
• Evaluation of degree of goal attainment to
analyze results achieved.

15. Benefits of MBO.
1. Better managing
2. Clarify organization roles and
structures.
3. Encourages personal commitment:
4. Development of effective controls.
5. Improved communication
• Weakness of MBO.
1. Dangers of inflexibility.
2. Failure to give guidelines to goal-setters.
3. Difficulty of setting goals.
4. Failure to teach the philosophy of MBO.

16. CHAPTER-4
DECISION MAKING
Meaning and Definition:
• The word decision has been derived from
the Latin word "decidere" which means
"cutting off". Thus, decision involves cutting
off of alternatives between those that are
desirable and those that are not desirable.
• George R. Terry defined, "Decision-making is
the selection based on some criteria from
two or more possible alternatives".

17. Characteristics of Decision Making
1. Decision making implies that there are various
alternatives .
2. freedom to choose an alternative.
3. may not be completely rational but may be
judgmental and emotional.
4. Decision-making is goal-oriented.
5. Decision-making is a mental or intellectual
process
6. A decision may be expressed in words or from
behavior.
7. implies uncertainty about the final result of
each possible course of operation.

18. TYPES OF DECISIONS
I. PROGRAMMED AND NON-PROGRAMMED DECISIONS.
i) Programmed decisions: Programmed decisions are routine and
repetitive and are made within the framework of organizational
policies and rules.
ii) Non-Programmed Decisions: Non-programmed decisions are
decisions taken to meet non-repetitive problems. Non-programmed
decisions are relevant for solving unique/ unusual problems in
which various alternatives cannot be decided in advance.
II. STRATEGIC AND TACTICAL DECISIONS
i) Strategic Decisions: Strategic decisions a major choice of actions
concerning allocation of resources and contribution to the
achievement of organizational objectives.
ii) Tactical Decisions: Routine decisions or tactical decisions are decisions
which are routine and repetitive. They are derived out of strategic
decisions

19. DECISION MAKING PROCESS

20. DECISION MAKING UNDER VARIOUS CONDITIONS
a) Certainty: In a situation involving certainty, people are
reasonably sure about what will happen when they make a
decision
b) Uncertainty: In a situation of uncertainty, on the other
hand, people have only a meager database, they do not
know whether or not the data are reliable, and they are
very unsure about whether or not the situation may
change.
c) Risk: In a situation with risks, factual information may exist,
but it may be incomplete. To improve decision making one
may estimate the objective probability of an outcome by
using mathematical models On the other hand, subjective
probability, based on judgment and experience may be
used.

21. THE END
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