Pom unit-iii, Principles of Management notes BBA I Semester OUBalasri Kamarapu
BBA notes, Osmania University, I sem, Principles of Management, PPT of Principles of Management, Osmania University BBA Notes, POM notes by NET qualified faculty
Planning is deciding in advance what to do, how to do it, when to do it and who to do it.
Planning bridges gap from where we are to, to where we want to be.
Pom unit-iii, Principles of Management notes BBA I Semester OUBalasri Kamarapu
BBA notes, Osmania University, I sem, Principles of Management, PPT of Principles of Management, Osmania University BBA Notes, POM notes by NET qualified faculty
Planning is deciding in advance what to do, how to do it, when to do it and who to do it.
Planning bridges gap from where we are to, to where we want to be.
Pom unit-iv, Principles of Management notes BBA I Semester OUBalasri Kamarapu
BBA notes, Osmania University, I sem, Principles of Management, PPT of Principles of Management, Osmania University BBA Notes, POM notes by NET qualified faculty
Business Services Support Limited offers online business management training courses. This power point presentation takes you through our introduction for management course for new managers. Visit our site www.businessservicessupport.com and find out more about our services
This documents provides a glance on the planning activity by illustrating the associated concepts such as,
Nature of Planning
Importance and purpose of planning process
Steps in Planning and Planning Premises
Types of plans
Objectives
Decision Making
Types of planning
Hierarchy of plans
Semester 1 PRINCIPLES OF MANAGEMENT Chapter 2 PLANNINGMAHUA MUKHERJEE
CALCUTTA UNIVERSITY CBCS SYLLABUS; CHAPTER 2 OF PRINCIPLES OF MANAGEMENT.
This will give the students a detailed insight on the planning and its requisites in managing an enterprise.
Pom unit-iv, Principles of Management notes BBA I Semester OUBalasri Kamarapu
BBA notes, Osmania University, I sem, Principles of Management, PPT of Principles of Management, Osmania University BBA Notes, POM notes by NET qualified faculty
Business Services Support Limited offers online business management training courses. This power point presentation takes you through our introduction for management course for new managers. Visit our site www.businessservicessupport.com and find out more about our services
This documents provides a glance on the planning activity by illustrating the associated concepts such as,
Nature of Planning
Importance and purpose of planning process
Steps in Planning and Planning Premises
Types of plans
Objectives
Decision Making
Types of planning
Hierarchy of plans
Semester 1 PRINCIPLES OF MANAGEMENT Chapter 2 PLANNINGMAHUA MUKHERJEE
CALCUTTA UNIVERSITY CBCS SYLLABUS; CHAPTER 2 OF PRINCIPLES OF MANAGEMENT.
This will give the students a detailed insight on the planning and its requisites in managing an enterprise.
Hybrid optimization of pumped hydro system and solar- Engr. Abdul-Azeez.pdffxintegritypublishin
Advancements in technology unveil a myriad of electrical and electronic breakthroughs geared towards efficiently harnessing limited resources to meet human energy demands. The optimization of hybrid solar PV panels and pumped hydro energy supply systems plays a pivotal role in utilizing natural resources effectively. This initiative not only benefits humanity but also fosters environmental sustainability. The study investigated the design optimization of these hybrid systems, focusing on understanding solar radiation patterns, identifying geographical influences on solar radiation, formulating a mathematical model for system optimization, and determining the optimal configuration of PV panels and pumped hydro storage. Through a comparative analysis approach and eight weeks of data collection, the study addressed key research questions related to solar radiation patterns and optimal system design. The findings highlighted regions with heightened solar radiation levels, showcasing substantial potential for power generation and emphasizing the system's efficiency. Optimizing system design significantly boosted power generation, promoted renewable energy utilization, and enhanced energy storage capacity. The study underscored the benefits of optimizing hybrid solar PV panels and pumped hydro energy supply systems for sustainable energy usage. Optimizing the design of solar PV panels and pumped hydro energy supply systems as examined across diverse climatic conditions in a developing country, not only enhances power generation but also improves the integration of renewable energy sources and boosts energy storage capacities, particularly beneficial for less economically prosperous regions. Additionally, the study provides valuable insights for advancing energy research in economically viable areas. Recommendations included conducting site-specific assessments, utilizing advanced modeling tools, implementing regular maintenance protocols, and enhancing communication among system components.
Overview of the fundamental roles in Hydropower generation and the components involved in wider Electrical Engineering.
This paper presents the design and construction of hydroelectric dams from the hydrologist’s survey of the valley before construction, all aspects and involved disciplines, fluid dynamics, structural engineering, generation and mains frequency regulation to the very transmission of power through the network in the United Kingdom.
Author: Robbie Edward Sayers
Collaborators and co editors: Charlie Sims and Connor Healey.
(C) 2024 Robbie E. Sayers
Explore the innovative world of trenchless pipe repair with our comprehensive guide, "The Benefits and Techniques of Trenchless Pipe Repair." This document delves into the modern methods of repairing underground pipes without the need for extensive excavation, highlighting the numerous advantages and the latest techniques used in the industry.
Learn about the cost savings, reduced environmental impact, and minimal disruption associated with trenchless technology. Discover detailed explanations of popular techniques such as pipe bursting, cured-in-place pipe (CIPP) lining, and directional drilling. Understand how these methods can be applied to various types of infrastructure, from residential plumbing to large-scale municipal systems.
Ideal for homeowners, contractors, engineers, and anyone interested in modern plumbing solutions, this guide provides valuable insights into why trenchless pipe repair is becoming the preferred choice for pipe rehabilitation. Stay informed about the latest advancements and best practices in the field.
Welcome to WIPAC Monthly the magazine brought to you by the LinkedIn Group Water Industry Process Automation & Control.
In this month's edition, along with this month's industry news to celebrate the 13 years since the group was created we have articles including
A case study of the used of Advanced Process Control at the Wastewater Treatment works at Lleida in Spain
A look back on an article on smart wastewater networks in order to see how the industry has measured up in the interim around the adoption of Digital Transformation in the Water Industry.
Saudi Arabia stands as a titan in the global energy landscape, renowned for its abundant oil and gas resources. It's the largest exporter of petroleum and holds some of the world's most significant reserves. Let's delve into the top 10 oil and gas projects shaping Saudi Arabia's energy future in 2024.
Student information management system project report ii.pdfKamal Acharya
Our project explains about the student management. This project mainly explains the various actions related to student details. This project shows some ease in adding, editing and deleting the student details. It also provides a less time consuming process for viewing, adding, editing and deleting the marks of the students.
Hierarchical Digital Twin of a Naval Power SystemKerry Sado
A hierarchical digital twin of a Naval DC power system has been developed and experimentally verified. Similar to other state-of-the-art digital twins, this technology creates a digital replica of the physical system executed in real-time or faster, which can modify hardware controls. However, its advantage stems from distributing computational efforts by utilizing a hierarchical structure composed of lower-level digital twin blocks and a higher-level system digital twin. Each digital twin block is associated with a physical subsystem of the hardware and communicates with a singular system digital twin, which creates a system-level response. By extracting information from each level of the hierarchy, power system controls of the hardware were reconfigured autonomously. This hierarchical digital twin development offers several advantages over other digital twins, particularly in the field of naval power systems. The hierarchical structure allows for greater computational efficiency and scalability while the ability to autonomously reconfigure hardware controls offers increased flexibility and responsiveness. The hierarchical decomposition and models utilized were well aligned with the physical twin, as indicated by the maximum deviations between the developed digital twin hierarchy and the hardware.
Water scarcity is the lack of fresh water resources to meet the standard water demand. There are two type of water scarcity. One is physical. The other is economic water scarcity.
Cosmetic shop management system project report.pdfKamal Acharya
Buying new cosmetic products is difficult. It can even be scary for those who have sensitive skin and are prone to skin trouble. The information needed to alleviate this problem is on the back of each product, but it's thought to interpret those ingredient lists unless you have a background in chemistry.
Instead of buying and hoping for the best, we can use data science to help us predict which products may be good fits for us. It includes various function programs to do the above mentioned tasks.
Data file handling has been effectively used in the program.
The automated cosmetic shop management system should deal with the automation of general workflow and administration process of the shop. The main processes of the system focus on customer's request where the system is able to search the most appropriate products and deliver it to the customers. It should help the employees to quickly identify the list of cosmetic product that have reached the minimum quantity and also keep a track of expired date for each cosmetic product. It should help the employees to find the rack number in which the product is placed.It is also Faster and more efficient way.
Cosmetic shop management system project report.pdf
MG6851
1. Unit II PlanningUnit II PlanningUnit II PlanningUnit II Planning
Prepared by
S.David Blessley
AP/Mechanical Engg.,
Kamaraj college of Engineering & Technology
Virudhunagar.
2. PlanningPlanningPlanningPlanning---- DefinitionDefinitionDefinitionDefinition
• According to Koontz and O’Donnell, Planning is deciding in advance what to do,
how to do, when to do it, and who is to do it. It is the selection among
alternatives of future course of action for the enterprise as a whole and each
department within it
• According to George R Terry, planning is the selecting and relating of facts and the
making and using of assumptions regarding the future in the visualization and
formulation of proposed activities believed necessary to achieve the desired
results
• The Haimann defines Planning is deciding in advance what is to be done . When a
manager plans, he projects a course of action for the future, attempt to achieve
consistent coordinated structure of operations aimed at the desired results
• Mary Cushing Niles defines, Planning is the conscious of selecting and developing
the best course of action to accomplish an objective. It is the basis from which
future management action springs
3. Nature of PlanningNature of PlanningNature of PlanningNature of Planning
• Planning is pervasive in nature
• Planning spreads around the entire organization. It differs at different levels and
different departments
• Top level management has to concentrate on overall planning, middle level on
executive planning and lower level supervisors on detailed day to day planning
• Planning is primary in nature
• Planning precedes over other managerial functions such as organizing, staffing,
directing and controlling
• Planning is the basic foundation from which all other functions arise. Without planning
there is nothing to organize, motivate and control
• Planning is continuous in nature
• Planning is continuous and it is a never ending process
• Feedback given by the control function creates a basis for new planning. There is
always a need for new plans on the basis of new demands and changes in the
environment
4. • Planning is flexible in nature
• When there is a change in the environmental conditions like changes in technology,
government policy, prices etc., planners have to make changes in the existing plan
• A plan should possess built in flexibility. As the future is uncertain, plans should be
flexible
• Planning is goal oriented
• Goals provide the basic guidelines for planning. Without any predetermined goal,
planning is meaningless
• Planning is an integrated process
• Planning involves effective integration of plans and actions of the managers
• Plans could be structured in such a way that lower level plans serve as a means to
accomplish higher level plans. Long range and short range plans are highly
independent and mutually supportive
• Planning is forward looking
• Planning means looking ahead and preparing for the future. Managers plan with a view
of tomorrow
5. • Planning is an intellectual process
• Planning requires imagination, innovation, foresight, creativity and sound judgement.
Logical thinking and systematic approach are essential for a good planner
• Internal and external factors influencing business activities must also be considered in
planning
• Planning involves choice
• It involves choice among various alternative courses of action
• The need for planning arises only when alternatives are available
• Managers have to choose the best alternative among various alternative courses of
action
• Planning includes efficiency and effectiveness dimensions
• Planning aims at utilizing physical and human resources economically and efficiently
6. • Planning determines the direction of an organization
• Planning determines where the organization is now and where it will be in future
• Without plans and goals, organizations have to work without considering what will
happen in the long run. Thus, planning reduces aimless activity and makes action more
meaningful.
• Planning provides a basis for team work
• When goals are defined properly, work assignments can be done easily and people can
begin to contribute individually and collectively to achieve the goal
• Planning is economical as it minimizes cost
• Effective planning eliminates guess work and unproductive effort
• It helps an organization to utilize its physical and human resources in an economical
way. Thus it saves time, effort, money and increases efficiency and effectiveness.
• Planning adopts to the changes in environment
• Modern managers must continually anticipate changes which will require discarding
old ways and adopt new ones
• It includes changes in technology, changes in government policy, price, men, materials
etc.,
Purpose/Objectives of PlanningPurpose/Objectives of PlanningPurpose/Objectives of PlanningPurpose/Objectives of Planning
7. • Planning provides coordination
• Planning coordinates the activities of the organization towards defined objectives
• Planning reduces risks
• Planning helps management to anticipate the future and prepare for risks
• As objectives, polices, strategies are formulated with consideration of internal and
external environment, changes of mistakes and future risks are minimum
• Planning facilitates decision making
• Decision making involves searching of various alternative courses of action, evaluating
them and choosing the best one
• Plans serve as the criterial for evaluating the different alternatives so that best one
may be chosen
• Planning encourages innovation and creativity
• Planning forces managers to find new and improved products in order to remain
competitive
• Planning helps managers to visualize the problems early and take suitable remedial
steps
8. • Planning improves morale
• A combination of factors which collectively produce a healthy situation in which people
work with satisfaction is said to be morale
• Planning increases individual motivations by providing a sense of direction and by
reducing the inner frustrations and interpersonal conflicts
• Planning facilitates control
• Planning establishes objectives or standards that facilitate control
• There is nothing to control without planning
9. Planning process/stepsPlanning process/stepsPlanning process/stepsPlanning process/steps Being aware of opportunities
Establishing objectives
Considering planning premises
Identifying alternatives
Evaluating alternative courses of action
Choosing best alternative course of action
Formulating derivative plans
Numerising plans by budgeting
10. • Being aware of opportunities
• An awareness of opportunities in the external and within the organization is the starting
point for planning
• Managers should analyze opportunities in light of prevailing market conditions, strategies
of competitors, customer’s likes and dislikes and organization’s strengths and
weaknesses.
• Planning requires realistic diagnosis of opportunities
• Establishing objectives
• Objectives should be established for the organization as a whole and then broken down
into departmental and sectional objectives
• Objectives of each lower unit must contribute to the objectives of next higher unit
• Employees should be given opportunity to suggest their ideas in the goal setting process
• Considering planning premises
• Planning premises nothing but the environmental conditions on which the plan is to be
executed
• Future market, customer taste, tax rates, govt. policies, political and social environments
are examples of planning premises
• Changes in premises will necessitate an alternation in the plans
11. • Identifying alternatives
• The planner should try to find out all the possible alternatives and their probable
sequences
• The main aim of identifying alternative solutions is to make the best decision
• Eg. If management wants to fill up a vacancy, it should consider alternatives like whether
to promote within or to recruit from outside
• Evaluating alternative courses of action
• Once alternative plans have been decided, they should be evaluated in the light of
premises, goals, costs quality etc.,
• As, so many variables are involved in the evaluation of alternative plans, evaluation
phase is a difficult one.
• Choosing a best alternative
• At this stage, the manager selects a course of action which will prove to be the best in
terms of achieving organizational objectives
• Formulating derivative planes
• The selected course of action is put into practice and develop its derivative plans such as
policies, procedures, rules etc.,
12. • Numerizing plans by budgeting
• Final step is to convert the selected coarse of action into budgets
• Budget created for whole organization is called overall budget
• Each division or department has its own budget. The sum of sub division’s budget should
be equal to the overall budget.
14. • Mission or Purpose
The mission or purpose identifies this basic function or task of the organization.
E.g. University-Purpose is to impart teaching and research.
Industry-Purpose is to produce and distribute goods and services
Court-Purpose is interpretation of law and its application
• A mission statement links the organization activities to the needs of the society
.The mission statement of Microsoft is:
“To enable people and businesses throughout the world to realize their full
potential. We consider our mission statement a commitment to our customers”.
15. Objectives
“Objectives are the goals, aims or purposes that the organizations wish to achieve
over varying periods of time”.
The final results to be achieved by performing various activities are known as
objectives
A managerial objective is the intended goal which describes scope and suggests
direction to the efforts of a manager”.
16. Strategies
• A strategy is a plan which provides an optimal match between the firm and
external environment.
Strategies represent general program of actions in order to achieve the main objectives
Eg. Producing low price mobiles with dual sim
Policies
• A policy is a general guideline for decision making.
• Policy is a verbal, written or implied overall guide, setting up
boundaries that provide the general limits and directions in which managerial
action will take place”.
Eg. Policy to purchase material after getting quotations from three suppliers
17. Procedures
• Policies are carried out by means of more detailed guidelines called procedures
.• A procedure is a detailed set of instructions / systematic steps for
performing a sequence of actions / handling activities.
Eg. Customer to bring the defective mobile set to the company and get report
from the inspection dept. that the product is defective
18. • Rules are detailed and recorded instructions that a specific action can or
cannot be performed in a given situation.
• Rules are more rigid than policies.
• Rules generally pertain to the administrative area of a procedure.
Rules
E.g. •The company will take the mobile for inspection only if the customer
produces sales bill
• Sanctioning traveling bills etc.,
19. Programme
• A programme is a sequence of activities directed towards the
achievement of certain objectives.
• A programme provides the definite steps which will be taken to
accomplish a given task in due time.
E.g.
• Purchasing new machines.
• Introducing new product in the market.
20. Budgets
• A budget is a single use plan.
• It is drafted for a particular period of time (e.g. Annually, quarterly, etc.)
• A budget is a statement of expected results expressed in quantitative terms
i.e. money, man hours, product units etc.
• It provides a standard by which actual operations can be measured and
variation could be controlled
21. objectives
• Objectives are the ends toward which the activities of an
organization are directed. This objectives of an organization are set
by its top level management
• Objectives are vital for organizations as organizations exists for a
purpose and objectives define and state the purpose
• Setting objectives is a part of the planning process.
22. Nature of objectives
• Hierarchy of objectives
• There are two different approaches for setting objectives.
• Top down approach
• Bottom up approach
• In top down approach, the top management determines objectives for
subordinates.
• In bottom up approach, the subordinates help managers in setting objectives
• The hierarchy of objectives in an organization is explained through means-end
chain.
• Objectives state an aim or goal i.e., they are ends; plans provide a frame work
to attain objectives i.e., they are means
• The objectives of each lower level become means to ends of the next higher
level in the organization
• Thus, each level of objectives stand as ends relative to the levels below it and
mean relative to the levels above it.
23. • Objectives are multiple in nature
• An organization can have a number of objectives
• Sometimes, there arise conflicts between objectives. In such cases, the firm has to set
priorities
• When several objectives are involved, managers have to integrate all the objectives
into a single one.
• Long range-short range objectives
• Long range objectives are extending over a period of 10 years whereas short range
objectives have a period of 1 year
• Short range objectives are set to achieve long range objectives. Short range objectives
are more specific and detailed than long range objectives
• Objectives should be specific and measurable
• Objectives should be expressed in quantitative terms such as increasing profit by 3%
and decreasing scrap by 2%
• It is difficult to express all the objectives in quantitative terms. Vague objectives have
no motivating effect on employees
• Objectives should be quantitative as well as qualitative
24. • Objectives are interdependent
• Objectives should be interdependent and must support one another so that they may be
achieved simultaneously
• Objectives must cover key result areas
• Key result areas are those activities that contribute most to company’s performance. Objectives
cannot be set for all areas of company and it covers only the key result areas
• Objectives should have defined time period
• Objectives should specify the time period over which they will be achieved. Time period is a
dead line stating the date on which objectives will be achieved
• Objectives should have priority
• Sometimes, achievement of one objective is relatively more important than the achievement of
other. In such a case, managers should give priority to important objectives
• Objectives should be challenging but realistic
• When objectives are too difficult, employees cannot attain the goals. Which results in fear and
dissatisfaction. Meanwhile, when goals are too easy, it will not serve the purpose
• Objectives should be linked to rewards
• People who attain goals should be rewarded. Rewards help in committing employees to achieve
objectives
25. Approaches to objective setting
• Traditional approach
• In traditional approach, objectives were set by top management and it is a one way
process. It is also called as authoritarian approach
• This approach results in reducing employee morale, commitment and responsibility
• Modern approach
• In modern approach, objectives are jointly set by superiors and subordinates. One such
approach is Management by Objectives (MBO)
Definition of MBO
MBO is defined as a process whereby the superior and subordinate managers of an
enterprise jointly identify its common goals, define each individual’s major areas of
responsibility in terms of results expected of him and use these measures as guides for
operating the unit and assessing the contribution of each of its members
MBO is a comprehensive managerial system that integrates many managerial activities in a
systematic manner and that is consciously directed towards the effective and efficient
achievement of organizational and individual objectives
26. Process of MBO
• Set Objectives
• Objectives must be specified for every managerial position at all levels of management
• Objectives are set for specific managerial positions and not for the individuals who
occupy the positions
• Identify key result areas
• The part of the organization that is critical to the organizations success is known as key
result areas
• Eg. In an industry where the raw material and machinery are the major cost
contributors, the managers key result areas may be raw material cost, waste and
machinery utilization
• Participatory or joint objective setting
• In objective setting, superiors and subordinators jointly set objectives for the
subordinates
• The emphasis is on participation of the subordination. This participation ensures that
the objectives set are realistic and set in agreement with the subordinates
27. • Make action plan
• Action plans represent the means by which an objective is achieved
• The objectives can be achieved only if the manager converts them into specific ones.
The action plan spells out the various steps or activities to be performed and the
specific time within these must be performed
• Review progress and take corrective action
• Regular progress review is one of the main features of MBO
• In the absence of a review system, the MBO system cannot function perfectly
• Review may be held at intervals of every three, six or twelve months
• In MBO the purpose of evaluating performance is to provide corrective feedback to the
concerned person
• Appraise performance
• The final step in the MBO process is appraisal
• The main purpose of appraisal is to assess the individual’s potential, his compensation
for career planning and identification of training and development needs
• Goals set by each individual and his superior will be different because of the fear of
facing appraisal program.
28. Policies
• A policy is a broad statement formulated to provide guidance in decision
making. It defines the area or limits within which decisions can be made.
• A policy is the statement or general understanding which provides the
guidance in decision making to members of an organization in respect to
any course of action
29. Nature of policy
• Relationship to organizational objectives
• Clarity of policy
• A policy is a guide to thinking in decision making
• Policies should be written
• Communication of policies
• Consistency of policies
• Balance of policy
• Planned formulation
30. Types of policies
On the basis of source of formulation
• Formulated policies
• Formulated policy is originated by the top level managers and it flows down the
level of management. It is also called as originated policy
• The top level managers lays down a policy which serves as the guide for the
managers at lower levels of the organization
• Appealed policy
• Policy formulated based on request or appeal from low level managers
• The subordinates may make a request for policy to deal with an existing problem
which is not covered by the formulated policy
• Imposed policy
• Policy which is imposed by external agents like government, trade union etc.,
which cannot be avoided
• Eg. In public sector commercial banks in india, recruitment and selection are done
by Banking service commission and not by corresponding bank of individual
31. Types of policies
On the basis of being written, policies can be classified as
• Written policies
• Written policies are formal and explicit declarations in writing. They are very clear and clearly
reveal the intention of the management. They are definite and cannot be interpreted otherwise
• Implied policies
• Sometimes policies may not be clearly stated and the actions of managers at the higher levels
provide guidelines for actions at lower levels
• Therefore implied policies are oral understandings which can be inferred from the decisions of
managers.
32. Planning Premises
Planning premises are the anticipated environment in which plans are expected to
operate
Classification of Planning premises
Planning premises may be classified as follows
• Internal and external
• Tangible and intangible
• Controllable and uncontrollable
• Internal and external premises
• Internal premise exists within the business enterprise
• They relate to premises about the company’s internal policies and Programmes,
capital budgeting proposals, sales forecasts, personnel forecasts (skills and
abilities of personnel) etc.
• These premises may be strengths or weaknesses of the organization.
33. • External premises originate from factors outside the organization. These are the
indirect- action environmental factors (social, political, technological etc.) which affect
the organization.
• They are also non-controllable premises beyond the control of the organization. The
external environmental factors represent opportunity or threat to the organization.
• Controllable and non controllable premises
• Controllable premises are within the control of a business enterprise, such as, men,
money, materials, policies, procedures, Programmes etc.
• They can be controlled by a business enterprise to ensure better sales of products.
• Semi-controllable premises are those which can be partially controlled by a business
enterprise like, labour position in the market, prices of the product, market share of
the company etc
• The extent to which prices can be increased or decreased depends upon market
sentiments, prices charged by competitors, cost structure of the company etc.
• Thus, change in prices can be controlled but subject to constraints of the variables that
affect the price of the product.
• Non-controllable premises lie beyond the control of the business enterprise. Wars,
natural calamities and external environmental factors (economic policies, taxations
laws, political climate etc.) are the non-controllable premises.
34. • Tangible and intangible premises
• Tangible premises are those which can be expressed in quantitative terms such as
monetary unit, unit of product, labour hour, machine hour etc.,
• Intangible premises are those which cannot be measured quantitatively. The example
of such premises is the reputation of the concern, public relations, employee morale,
motivation
35. Decision making
• Decision making is defined as the process of choosing a course of action
from among alternatives to achieve a desired goal.
• The manager of an organization decides what he thinks to be the best among
various alternatives. Thus decision making is a blend of thinking, deciding and
acting
36. Decision making process
• Identification of problem
• Begins with the identification of problem
• Problems generally arise due to gap between what is and what should be
• A well defined problem is half solved. Thus, the manager should find the causes of a
problem. There may be multiple causes for a problem and the manager has to identify
the major cause
• Managers can look into the management report, check progress against budgets,
compare results against ideas by competitors and efficiency of the employees etc.,
• Diagnosis and analysis of the problem
• In order to diagnose the problem correctly, the manager must obtain all relevant facts
and analyze them correctly. The most important part of diagnosing problem is to find
out the real cause or source of the problem
• After diagnosing, next phase is to analyse the problem. It involves classifying problem
and gathering information
• Thus analysis of a problem requires to find who would make decision, what information
would be needed, from where the information is available etc.,
• Past events may be analyzed to get a clear idea about the problem
37. • Search for alternatives
• Next step in decision making is develop alternatives. There are almost many alternatives
to any course of action are available. thought hard enough.
• The ability to develop alternatives is often as important as being able to select
correctly from among them. Concept of the limiting or strategic factor will help
Managers to choose beat alternative.
• A limiting factor is something that stands in the way of accomplishing a desired
objective. Recognizing the limiting factors in a given situation makes it possible to
narrow the search for alternatives to those that will overcome the limiting factors.
• Principle of the limiting factor states that by recognizing and overcoming those factors
that stand critically in the way of goal, the best alternative course of action can be
selected.
38. • Evaluation of Alternatives : Once appropriate alternatives have been found, the next
step in planning is to evaluate them and select the one that will best contribute to
the goal.
• In comparing alternative plans for achieving the objective, people are likely to think
exclusively of Quantitative factors. These can be measured in numerical terms, such
as time or various fixed and operating costs. Success of the venture would be
endangered if intangible or qualitative factors are ignored.
• Qualitative or intangible factors are factors that are difficult to measure numerically
such as the quality labor relations, risk of technological change or the international
political climate.
• Illustrations pointing out the importance of giving attention to both
quantitative and qualitative factors
Instances in which an excellent quantitative plan was destroyed by an unforeseen war
Fine marketing plan made inoperable by a long transportation strike
Rational borrowing plan hampered by an economic recession.
39. Strategic planning
Strategy is the determination of basic long term objectives and adoption of
course of action and allocation of resources to achieve these goals
A strategy may also be defined as a special type of plan prepared for
meeting the challenge posted by the activities of competitors and other
environmental forces
Strategy is a course of action through which an organization relates itself
with environment so as to achieve its objectives
40. Strategic planning process
• Mission and objectives
• Strategic planning process starts with the determination of organizational mission and
objectives.
• Mission is the basic purpose for which the organization has been started
• Objectives are the end results which an organization tries to achieve
• Strategic planning process focuses on an organization’s long term relationship to its
external environment
• Environmental analysis
• An organization should know the kind of environment in which it has to work
• The Factors likely to affect the organization is prepared and analysed to identify
opportunities and threats
• basic objective of strategies is to integrate the organization with its environment
• Corporate analysis
• Environmental analysis is mainly concerned with external factors whereas corporate
analysis refers to internal environment
• It enables the organization to improve its strengths and to minimize its weakness
41. • Corporate analysis is carried out in such a way that by identifying the factors which are
critical for the success of the present business of the organization and then evaluating
these factors whether they are contributing in positive way or in negative way.
• Identification of alternatives
• Strategic alternatives are developed on the basis of an analysis of both external and
internal environment
• Usually, this process bring large number of alternatives. These alternatives are evaluated
on the basis of some criteria. These criteria are evaluated on organizational mission
and objectives
• Strategic decision making
• In this stage, the acceptable alternatives which fits the organizational objectives
among several objectives are chosen
• Personal values and expectations of decision maker play an important role in strategy
as he decides the course of action depends on his likes and dislikes
• The choice of strategy also depends on several factors such as management, external
environment, management attitude towards risk etc.,
42. • Implementation, review and control
• Once a strategy has been chosen, it is put into action by translating it into tactical and
operational plans. The following factors are necessary for implementation of strategy
• Designing a suitable organizational structure
• Developing and motivating people to take up work
• Designing effective control and information system
• Allocation of resources etc.,
• When these processes are undertaken, it will produce results which can be compared
with the objectives
• Whenever actual results are below expectation, the strategy should be reviewed and
modified to the change in external environment
43. Planning tools and techniques
In organizations, managers plan their future course of action based on some
predictions about the future.
It is carried out in two ways by assessing the environment and techniques for
allocating resources
Techniques for assessing the environment
• Environmental scanning
• Environmental scanning is the process of screening large data in terms of information to
expect and realize changes in environment. By this, most of the companies have
increased their profits and revenue growth
Competitor intelligence
Organizations collect information about competitors in the form of work and actions
Global scanning
Used by managers to see the changes and trends in global environment through collected global
information
44. • Forecasting
• It is the process of estimating the future based on the analysis of their past and present
behaviour. A forecast tries to define what will happen in future. It helps in providing
information for planning and decision making
• Forecasting types
• Long range forecast
• More than 3 years
• Useful in planning new products, facility location or expansion, R&D etc.,
• Medium range forecast
• 3 months to 3 years
• Useful in sale planning, budgeting and production planning
• Short range forecast
• Normally less than 3 months
• Useful in purchasing, job assignments, scheduling etc.,
• Forecasting steps
• Determining forecast applications and objective
• Choose with care the items to be forecasted
• Determine the forecast time horizon
• Choose appropriate forecasting models
• Collect the appropriate data
• Validate the forecasting model with care
• Make all relevant forecasts
• Implement the appropriate results
45. • Forecasting methods
• Qualitative method
• Quantitative method
• Qualitative methods
• Provides the forecast that incorporate factors such as decision maker’s emotion,
personal experiences and intuition
• Eg: consumer market survey, executive’s opinion etc.,
Jury of executive opinion
The executives of the organization provide an estimate of future volume and the
president provides a considered average of all these estimates.
It is good to use when,
Experts are unbiased
Large changes are unlikely
Relationships are well understood by experts
Experts possess privileged information
Experts receive accurate and well summarized feedback about their forecasts
46. Delphi method
Delphi method is a group decision process about the likelihood that certain events will
occur
The delphi method makes use of a panel of experts based on the areas of expertise
required to deal systematically a complex problem
It comprises a series of questionnaires sent by mail or computerized systems to experts
These questionnaires are designed to elicit and develop individual responses to the
problems posed and enable the experts to refine their views
Steps followed in delphi method
Formation of team to undertake and monitor a delphi questionnaire
Selection of panels to participate
Development of first round delphi questionnaire
Testing the questionnaire for proper wording
Transmission of the questionnaire to the panel
Analysis of first round responses
Preparation of second round
Transmission of second round questionnaires to the panel
Analysis of second round responses
Preparation of report by analysis team to present the conclusions
47. Consumer survey
Mainly useful for predicting the sales forecast when it is introduced in the market
Field survey are conducted to gather information on the intentions of the concerned people
When company sells most of its product to a few customers, the simple method is to ask the customers to
project their needs of future period
On the basis of the surveys, demand for various goods can be projected
Sales force opinion composite
In this, members of the sales people estimate sales in their own territory and estimates the aggregated and
reviewed at higher management levels
Since the sales force is close to the customer, this method is recommended for new and existing products
Scenario building
Several scenarios are developed based on assumptions which include parameters such as new technology,
population shifts and changing consumer preferences
It is then assumed that each scenario happens and the implications for the organization are analysed. The
probability of occurrence each scenario also be defined. Actions may then be taken on high probability events
Judgement decomposition
The basic idea behind this is to divide the forecasting problem into parts which are easier to forecast
One then forecast individually and then combine it obtain the forecast result
Eg. To forecast sales of a brand, one can forecast industry sales volume, market share and selling price per unit.
Then the problem is reassembled by multiplying the components