Planning involves defining objectives, establishing an overall strategy, and developing coordinated plans. It provides direction, coordination, reduces uncertainty and waste. While planning can create rigidity, the quality of planning and implementation are more important than the extent of planning. There are strategic, tactical, short and long term plans that vary in specificity, frequency of use, and flexibility. Management by objectives jointly determines goals and links rewards to attainment. The strategic management process identifies the mission and analyzes resources, opportunities, and threats to formulate and implement strategies and evaluate results.

1. Foundations of Planning
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2. PLANNING
 Definition:
Planning encompasses defining the
organization’s objectives or goals,
establishing an overall strategy for
achieving those goals and developing a
comprehensive hierarchy of plans to
integrate and coordinate activities .”
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3. PLANNING
 The Purpose of Planning:
 Gives direction
 Establishes coordination
 Reduces uncertainty
 Reduces overlapping / wasteful action
 Establishes objectives or standards
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4. Criticisms of Formal
Planning
 Planning may create rigidity.
 Plans cannot be developed for a
dynamic environment.
 Formal plans cannot replace
intuition and creativity.
 Planning focuses managers’
attention on today’s competition,
not on tomorrow’s survival
 Formal planning reinforces success,
which may lead to failure
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5. Planning Increases
Performance
 Generally produces positive financial
results
 Quality of the planning process and
the implementation efforts are
more important than the extent of
planning
 Environmental change can strongly
affect the impact of planning
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6. Types of Plans
FREQUENCY
BREADTH TIME FRAME SPECIFICITY OF USE
Strategic Long-term Directional Single use
Tactical Short-term Specific Standing
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7. Types of Plans
 Strategic -- organization wide,
overall objectives, position firm in
environment
 Tactical -- specify the details of
how overall objectives are to be
met
 Short term -- less than a year
 long term -- beyond five years
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8. Types of Plans
 Specific -- clearly defined
objectives
 Directional -- flexible plans
setting out general guidelines
 Single use -- meets the needs
of a unique situation
 Standing -- provides guidance
for repeatedly performed actions
BIMTECH FOUNDATION COURSE : PPM 8
JUNE 2010

9. Clear Low
Specific Plans
Flexibility
Objectives
General Directional Plans High
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10. Managerial Levels and
Plans
Strategic
Planning
Top
Executives
Middle-level
Managers
First-level
Operational Managers
Planning
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11. Management By Objectives
(MBO)
 What is MBO ?
A system in which specific performance
objectives are jointly determined by
subordinates and their superiors,
progress toward objectives is
periodically reviewed and rewards are
allocated on the basis of that progress.
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12. Management By Objectives
Common MBO elements
 Identify key job tasks
 Set specific and challenging goals
 Encourage active participation
 Prioritize goals
 Build in feedback
 Link rewards to goal attainment
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13. Management By Objectives
Overall
Organizational Objectives
Divisional
Objectives
Departmental
Objectives
Individual
Objectives
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14. MBO Downside
 Overly focussed on what is being
measured rather than final result
(quantity over quality)
 Individual rather than team focus
 Objectives become ceilings rather
than floors -- decreases further
motivation
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15. 1.
Identify Current Mission
4. 2.
Analyze Analyze the
Resources Environment
5. 3.
Strengths & Opportunities
Weaknesses & Threats
6.
Reassess Organization’s Mission
7.
Formulate Strategies
The
8.
Implement Strategies Strategic
Management
9.
Evaluate Results Process
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16. The Strategic
Management Process
 Identify the current mission and goals
 Analyze the Environment
 Environmental Opportunities – Threats
 Analyze the firm’s Resources and Skills
 Firm’s Strengths and weaknesses
 Reassess the mission and objectives
 Strategy Formulation
 Implement strategies
 Evaluation
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17. Mission
 The fundamental purpose of
an organization -- the
definition of success
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18. SWOT: Identifying
Organizational Opportunities
Organization’s Opportunities
Resources in the
Environment
Organization’s
Opportunities
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19. Competitive
Strategies
 Cost-leadership
 Differentiation
 Focus
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20. Comparison: Entrepreneurs and
Traditional Managers
Traditional Entrepreneur
Manager
Primary motivation Corporate rewards Independence
Time orientation Short-term goals 5-10 year growth of
business
Activity Delegation Direct involvement
Risk tendency Low Moderate
View toward Avoidance Acceptance
mistakes
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21. Project Management and
Process
 Contemporary planning tool
 Is a process of quality control to ensure a
project’s activities are done on time,
within budget, and according to
specification
 Project is a one-time-only set of activities
that has a definite beginning and ending
point in time
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