This document discusses key concepts in management planning and decision making. It defines planning as determining future courses of action and outlines features of good plans like being linked to objectives and feasible. The planning process involves steps like establishing objectives and identifying alternatives. Advantages include quick goal achievement while limitations are costs and inflexibility. Types of plans include strategic, tactical, and operational. Management by objectives and its process are also summarized.

1. Principles of Management
Planning and Decision making
 Planning- Definition and Importance
 Features of a good plan
 Steps in planning
 Advantages and Limitations of planning
 Types of plans, Strategic and Tactical planning
 Components of planning
 MBO
Process of MBO
 Decision making – Concept and Importance
Characteristics of Decision making
Process of Decision Making
Modern Techniques of Decision Making

2. Principles of Management
Planning- the concept
 Plan is a commitment to a particular course of action necessary to
achieve specific results
 Planning is determination of future course of action
 It occupies the first position in the management process
 Without a plan-
there can be nothing to organise,
managers can’t lead with confidence
no way to see if they stray from the path of achieving objectives
 Planning is deciding in the present, what to do in the future. It is a
process by where companies reconcile their resources with their
objectives and opportunities
- Philip Kotler

3. Principles of Management
Features of Planning
 Process rather than just a behaviour- decides future course
of action
 Needs forecasting
 Involves selection of suitable course of action
 Undertaken at all levels of management- role increases at
higher levels
 Flexible principle- since it is based on future, which is
dynamic
 A continuous management function- involves perception,
analysis, communication, decision and action

4. Principles of Management
Features of a good plan
 Linked to long term objectives
 Provide clear and specific direction (for future course of
action)
 Consistency- Alignment with the behaviour of external and
internal factors
 Feasible- Not too ambitious, not set too low
 Simplicity- to understand by all, encourages least
communication between 2 groups of personnel
 Flexible

5. Principles of Management
Steps in Planning Process
Perception of
opportunities
Establishing
objectives
Planning
Premises
Identification
of alternatives
Evaluation
of alternatives
Choice of
alternative plans
Formulation of
supporting plans
Establishing
sequence
of activities

6. Principles of Management
Advantages of Planning
 Quick achievement of objectives
 Unity in purpose and direction
 Optimum utilisation of resources
 Increases efficiency of managers
 Assists in controlling organisational activities/functions
 Reduces chances of inconsistency
 Reduces wrong decision making

7. Principles of Management
Limitations of planning
 Time consuming and costly
 Change in situation makes planning ineffective
 Internal inflexibility-Psychological, Policy, capital
 External inflexibilities- Political Climate, Trade Unions,
Technological changes

8. Principles of Management
Types of plans
 Short term plans
 Medium term plans
 Long term plans
 Formal and Informal plans
 Specific and Routine plans
 Strategic planning
 Functional plans
 Operational plans

9. Principles of Management
Strategic Planning
 It sets the long term direction of the organisation in which
it wants to proceed in future
 Generally, the period for strategic plan is 3 to 5 years
 It affects a part or whole of the organisation
 It is based on long term forecasts
 E.g.: Planned growth in sales, diversification of business,
new product development

10. Principles of Management
Tactical Planning
 It decides the detailed use of resources to achieve business
goals
 The lower level management is responsible for the same
 It is a short term plan, based on past performances
 Involves day to day operations of business

11. Principles of Management
Components of Planning
 For Repetitive/Standing Plans:
Mission
Objectives
Policies
Procedures
Rules
Strategies
Forecasting
 For Single Use Plans:
Programmes
Projects
Schedules
Budgets

12. Principles of Management
MBO
 It is a way of managing where
1) the objectives of individuals, groups, departments,
divisions and the organisation identified
2) managerial strategies to achieve the goals are
formulated
Features of MBO
 Superior and the subordinate, both need to participate
 Joint goal setting
 Joint decision on method to achieve the objectives
 Focus on goals to achieve maximum results

13. Principles of Management
Process of MBO
 The sub ordinate defines the job and the tasks to be done. He
ranks them according to priority
 The objectives are set: The important areas in terms of
organisation’s success are identified (Production increase);
performance measures in every area will be set (Cost effective
production); then standards for each performance are determined
(Produce 100 units in Rs. ??)
 Develop POA: It gives an idea about steps taken or activities to be
done, to reach the goal
 Conducting periodic review: A feedback is given to the
management regularly, on the progress of POA and achievement of
objectives
 Performance appraisal: Done by superiors with their sub ordinates.
They measure actual result against decided standards. Also give
guidance.
 Achievement of objectives

14. Principles of Management
Improving effectiveness of MBO
 Support from all
 Acceptance by managers
 Training of managers (on MBO philosophy)
 Organisational commitment
 Allocation of time and resources
 Uninterrupted feedback