2. Planning
• Identifying and selecting appropriate goals and courses of
action for an organization.
The organizational plan that results from the planning process
details the goals & specifies how managers will attain those goals.
Strategy
• The cluster of decisions and actions that managers take to
help an organization reach its goals.
Mission
• A broad declaration of an organization’s purpose that
identifies the organization’s products and customers and
distinguishes the organization from its competitors
Planning
3. “ Planning involves selecting mission and objectives and the
actions to achieve them; it require decision making, that is,
choosing from among alternative future course of action ”
“ Planning is deciding in advance what is to be done in future.
Plan bridges the gap between where we are and where we
want to go.”
Weihrich & Koontz
“ Planning is deciding in advance what is to be done, that is, a
plan is a projected course of action ”
W.H.Newman
Planning : Definition
4. The Planning Process
Planning is the process used by the managers to
identify and select goals and courses of action for
the organization.
• the organization plan that results from the planning
process details the goals to be attained.
• the pattern of decision managers take to reach these
goals is the organization’s strategy.
5. Its contribution to purpose and objectives.
The primacy of planning or we can say plan is the
foundation of management.
The pervasiveness of planning
Planning is important to all managers regardless of their levels in the
organization.
The efficiency of plans
Plans are efficient if they achieve their purpose at a reasonable cost
Plan is a continuous process
The Nature of Planning
6. PLANS
Objectives & how
Achieve them
What kind
Of organization
Structure to have
What kind of
people we need
and when
How most
effectively
to lead people
By furnishing
Standards of
control
Necessary for deciding
•Which helps us to know
•Which affects the kind of
leadership we have & direction
• In order to ensure
success of plans
7. Being Aware Of Opportunity
In light of : The market competition
What customer want ?
Our strengths & weakness
Setting Objectives Or Goals
Where we want to be & What we
want to accomplish & When
Considering Planning Premises
In what environment – Internal and
External will our plan operate
Identifying alternatives
What are the most promising alternatives
to accomplishing our objectives?
Numberizing plans by making
Bdgets: Develop such budgets are :
Volume & price of sales,
Operating expenses,
Expenditure for capital expenditure
Formulating supporting plans such
as plans to : Buy equipments,
Buy materials, Hire and train workers
Develop a new product
Choosing an alternative
Selecting the course of action
we will pursue
Comparing alternatives in light of
goals sought - Which alternative will
give us the best chance of meeting our
goals at the lowest cost & highest profit
Steps in planning
8. Steps in Planning
Being Aware Of Opportunity :
• In light of : The market competition
• What customer want ?
• Our strengths & weakness.
Establishing objectives :
• Objective should decide for –- Long term as well as
Short-term range
• Enterprise objective give direction to the major plans
- That defines the objectives of every major department and
objective of every subordinate deparetment.
And so on down the line.
9. Considering planning premises :
Forecasting is important in premising :
• What kind of markets will there be
• What prices
• What products
• What technical developments
• What costs
• What wage rates
• What new plants
• What political or social environment
• What are the long=term trends ?
We can forecast for our business from –
• Business Today
• Government publications
• Survey of current business
• Economics indicators
• Large banks – newsletters on current business conditions.
Steps
in
Planning
10. Determine alternative courses :
Evaluating alternative courses :
• One course may appear to be the most profitable, but if may
require large cash out lay and have a slow payback.
• Another may look less profitable but may involve less risk.
• Still another may better suit the company long - range objective.
Selecting a course :
• This is the point at which the plan is adopted – The real point of
decision – making.
Formulating supporting plans :
Numberizing plans by making budgets :
Develop such budgets as –
• Volume and price of sales
• Operating expenses necessary for plans
• Expenditure for capital equipment.
Steps
in
Planning
11. The Purpose of Planning
Gives direction
Establishes co-ordination
Reduces uncertainty
Reduces overlapping or wasteful action
Establishes objectives or standards
12. Criticisms of Formal Planning
Planning may create rigidity.
Plans can’t be developed for a dynamic environment.
Formal plans can’t replace intuition & creativity.
Planning focuses managers’ attention on
today’s - competition, not on tomorrow’s survival.
Formal planning reinforces success, which may
lead to failure.
13. Types
of
Plans
Breadth Time Frame Specificity Frequency of Use
Strategic Long-term Directional Single use
Tactical Short-term Specific Standing
14. • 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.
• Specific – Clearly defined objectives.
• Directional –
Flexible plans setting out general guidelines.
Types
of
Plans
15. Standing Plans Single–Use Plan
Frequency of use
type of Plans
1 2
• Single use –
meets the needs of a unique situation.
• Standing –
Provides guidance for repeatedly performed actions.
16. Standing Plans :
Use in programmed decision situations –
Policies are general guides to action
As a type of plan, a policy defines and confines the area of
discreation of subordinates, in matters of decision-making.
Rules are formal written specific guides to action
That must be followed by every member of the organization so
that all human activities are headed towards a common goal.
i.e. The office shall function from 10am – 5pm
Standard operating procedures (SOP) specify an exact series of
actions to follow – for example,
- there might be specified procedures for handling inward mail;
- procedures for executing orders of customers;
- procedures for employees to proceed on to leave & so on, for
various other organizational activities.
Types
of
Plans
17. Single – use Plans
• Developed for a one-time, non-programmed issue –
Programs : integrated plans achieving specific goals
- to improve the skills of personnal in performing their jobs;
there is required a ‘training and development’ programme.
- to popularise the product; there is a need for an advertising
programme.
Project: specific action plans to complete programs
- a special type of program – being either of a technical nature
requiring expertise in execution or of a financial nature involv-
ing huge capital outlays.
i.e. - Establishment of a new factory. A research project
formulated for suggesting improvements in the quality or dura-
bility of product or coming out with some innovation, in these
regards.
Types
of
Plans
19. Why Planning is Important
Planning ascertains where the organization is now and
deciding where it will be in the future.
• Participation : all managers are involved in setting future goals.
• Sense of direction and purpose : planning sets goals and
strategies fo all managers.
• Coordination : plans provide all parts of the firms with underst-
anding about how their systems fit with the whole.
• Control : Plans specify who is responsible for the
accomplishment of a particular goal.
20. The Strategic Management Process
Identify Current Mission
Implement Strategies
Evaluate Results
Analyze the
Environment
Analyze
Resources
Opportunities
& Threats
Strengths &
Weaknesses
Reassess organization’s Mission
Formulate Strategies
21. .
The Strategic
Management
Process
Identify Current Mission
Analyze the
Environment
Formulate Strategies
Evaluate Results
Reassess Organization’s Mission
Implement Strategies
Analyze
Resources
Opportunities
& Threats
Strengths &
Weaknesses
1.
2.
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3.
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9.