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This document discusses the key aspects of planning, including: 1. It defines planning as determining an organization's goals and means of achieving them, and identifies it as the most fundamental management function. 2. The planning process involves setting objectives, developing premises, identifying alternatives, evaluating alternatives, selecting the best alternative, formulating derivative plans, and communicating and following up on the plan. 3. Effective planning provides direction, reduces risks and uncertainties, establishes standards for control, and promotes innovation. Regular evaluation ensures plans are on track to achieve objectives.

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Unit 2 : Planning Planning Nature and purpose of planning Steps in Planning process Types of planning Objectives Setting objectives Policies Planning premises Strategic Management Planning Tools and Techniques Decision making steps and process. STUDENTSFOCUS.COM
GOAL,PLAN & PLANNING 2 GOAL A desired future state that the organization attempts to realize. PLAN A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals PLANNING Determining the organization’s goals and the means for achieving them – the most fundamental management function – the most controversial management function STUDENTSFOCUS.COM
Definition of Planning 3 Weihrich & Koontz Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making, that is, choosing best alternative from the available future courses of action. McFarland Planning may be broadly defined as a concept of executive action that embodies the skills of anticipating, influencing & controlling the nature & direction of change. Terry Planning is the selection & relating of fact & making & using of assumption regarding the future in the visualization & formation of proposed activities believed necessary to achieve desired result.” A job well planned is half done Planning bridges the gap from where we are to where we want to go STUDENTSFOCUS.COM
Nature & Features of planning 4 Planning focuses on achieving objectives  Planning is an intellectual process  It is a way to achieve the objective is decided in the planning Planning is primary function of management  It is the first and foremost function of management  It lead all other managerial functions  Planning is the most basic to all management functions Planning is pervasive  Planning is an important function of every manager (All levels of manager)  Planning is pervasive(enveloping) function of management Planning is futuristic  Planning is flexible because future is always dynamic  Planning determines the future course of action  Primarily concerned with looking into future STUDENTSFOCUS.COM
5 Planning is continuous  It is involving complex processes of perception, analysis, conceptual thought, communication, decision & action  Plans are prepared for a particular period. Hence there is need for new plan after the expiry of that period Planning involves decision making  Choosing best alternative from the available future courses of action.  Involves selection of suitable course of action, means there are several alternatives for achieving objectives Planning is a mental exercises  It is a process of thinking before doing  It is deciding in advance What to do? How to do it? When do it? Who is to do? . “Without the activities determined by planning, there would be nothing to organize, no one to activate and no need to control”. George R. Terry STUDENTSFOCUS.COM
Importance of planning 6 Planning provides direction  Gives direction to all the activities of an organization  The attention of all the managers will get focused on the attainment of their objectives Planning reduces risks of uncertainty  Future are anticipated & various activities are planned, the risk of future uncertainties can be minimized  Provides certainty in the activities  Planning establishes coordinated effort  Manage complexities & competition Planning reduces overlapping and wasteful activities  Problems of when, where, what and why are almost decided  Helps in effective forecasting (predict) Planning establishes goals and standards used in controlling STUDENTSFOCUS.COM
7 Planning promotes innovative ideas It is clear that planning selects the best alternative out of the many available  Making effort of discovery, new ideas emerge and they are studied intensively in order to determine the best out of them  Planning imparts a real power of thinking in the managers  It leads to the birth of innovative & creative ideas Formal planning is associated with Higher return on assets and Higher profits Planning facilities decision making To increase organzation effectiveness Provides economy in the management Helpful in the accomplishment of budgets STUDENTSFOCUS.COM
Making management planning more effective 8 Planning has to be precise and effective for the success of the organization Create climate for planning  Smoothly & systematically planned  Stepwise sequence needs to be created  This can be achieved by establishing clear cut goals Support from the top management  Planning cannot be initiated until and unless the top management supports  Need continuous attention, they must be willing to extend a helping hand whenever required Equal participation  Secure acceptance and commitment from each and everyone in the organzation  Encourage subordinates participation STUDENTSFOCUS.COM
Benefits of planning 9  Reduces uncertainty  Encourage innovation & creativity  Improves motivation  Achieve better coordination  Facilitates control  Planning leads to success  Focuses attention Just planning is not enough 6 Ps in planning 1.Purpose 2.Philosophy 3.Premise 4.Policies 5.Plans 6.Priorities STUDENTSFOCUS.COM
10 Proper communication  Need proper & well developed communication network hence goals, premises, and polices  Must be communicated to people  Time limits must also be communicated in advance Integration  All the plans that have been formulated must be properly balanced & integrated with the organizational mission statement  Minimum wastage of the efforts & the resources Strict monitoring  Plans must be subjected to regular and appraisal in view of the dynamic nature of the environment both internal & external changes STUDENTSFOCUS.COM
Steps in Planning process 11  Plans may be major or minor in nature  Minor plans are simpler and easily made  Making Major plans require a detailed action plan STUDENTSFOCUS.COM
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Steps in Planning process 13 Identification of Opportunities Determination of Objectives Developing Planning Premises Identification of Alternatives Evaluation of Alternatives Selection of Best Alternatives Formulating Derivative Plans Communicating the Plan Follow up Measures STUDENTSFOCUS.COM
14 Being Aware of Opportunity In light of  Market  Competition  What Customers want  Our Strengths  Our Weakness It is not a part of planning process. This is real staring point both within & outside the organization All mangers should know Where they stand, in the light of their strengths & weaknesses. Also they should understand what problems they wish to solve & why, and know what they expect to gain. Planning requires realistic finding of the opportunity STUDENTSFOCUS.COM
15 Determination of the objectives Objectives set must clearly indicate  What is to be achieved  Where action should take place  Who should perform it  When it is to be accomplished STUDENTSFOCUS.COM
16 Developing Planning premises Planning is forward looking. Therefore planning is based on Forecasting (Assumption or Predict or Calculate) Forecasting is made in the following ways 1. What will be the market force ? Market forces refers to demand, supply, buying capacity & the like 2. Expectation of volume of sales 3. What kind of products are to be sold & in what price ? 4. What would be their manufacturing costs? 5. What would be the tax policy & economic policy of the Government ? 6. Expectation of technology change in production 7. How is the finance raised for expansion and/or modernization of the business ? Sufficient information must be collected in order to make plans and sub plans, Also must be done in terms of external and internal Environment STUDENTSFOCUS.COM
17 Premise = Foundation (Ground) STUDENTSFOCUS.COM
18 Identification of Alternatives  Usually, there are several alternatives for any plan.  The manager should try to find out all the possible alternatives  should Screen out most viable (workable) alternative  To analyze in detail a limited number of alternatives STUDENTSFOCUS.COM
19 Evolution of Alternatives After seeking out alternative courses and examine their strong and weak points  Most profitable  Immediate profitable  Uncertainty  Cash position & Capital availability  Large cash outlay & slow payback  Less profitable less risk (Easy) Less tension more work More work less tension STUDENTSFOCUS.COM
20 Selection of Best Alternative After evaluating the various alternatives the best alternative should be selected for implementation STUDENTSFOCUS.COM
21 Formulation of Derivative plans (Secondary Plans)  Next step is to develop detailed sub plans for its implementation  Derivative plans are required to support the overall plans  Derivative plans are developed in the frame work of overall plans STUDENTSFOCUS.COM
22 Communicating the Plan  It is very important to get the cooperation of the subordinates at every stage of its implementation  Securing participation of employees : Successful execution of Any plan depends upon the extent participation of employees  The management should involve employees in planning through communication, consultation and participation STUDENTSFOCUS.COM
23 Follow-up measures (Evaluation)  The management should watch how planning is being done  To ensure the plans are proceeding along the right lines  Continuous evaluation of planning is also necessary  It means that the actual performance is compared with the planning & the corrective action is taken if there is any deviation STUDENTSFOCUS.COM
24 TYPES OF PLANS (Classification of Planning) In the process of planning several specific plans are prepared which may broadly be classified into two categories 1.Standing Plans 2.Single Use Plans STUDENTSFOCUS.COM
25 Standing Plans  Repeated use Plans  Long Term Plans & are related to the entire organization  These plans serve the purpose for a longer time  Examples : Purpose, Objective, Polices, Strategies Purpose or Mission The purpose is a brief statement identifying the reason that an organization exists (future aim or function)  Every organization have meaningful purpose or mission  Mission gives a clear cut idea about basic long run commitment of an organization Mission of organization may be two fold 1. Production & Distribution of goods or services 2. Provision of employment & source of income to people STUDENTSFOCUS.COM
26 Purpose State High Way Department  Design, Building & operation of a system of state highways Court  Interpretation of laws & their applications University  Teaching, Research, Consulting & Training Mission Reliance Oil Company  To search for oil & to produce variety of petroleum products ranging from fuel to chemicals IIT, Chennai  It provides intellectual leadership in chosen fields of technology & management IIM, Ahmadabad  Teaching, Training, Consulting. It also aims to improve India’s economy such as agriculture, education, health, population control, energy & public administration NASA  Send Red rover to Mars & find out if there were any water traces on the red planet STUDENTSFOCUS.COM
Objectives or Goals These are the end towards which the activities of an organization are directed.  Objective decide what to do  Objective decide where we want go, what we want to achieve & next what is our designation  Actions for achieving the purpose STUDENTSFOCUS.COM
28 Polices These are general statements or understandings that guide or channel thinking in decision making  Policy decides How to do  Polices are framed to achieve the objective efficiently Guides to action Strategies Strategies – Military used word It is a set of decision making rules for guidance of organizational behavior Major targets or end results that relate to the long-term survival, value & growth of the organization A pattern of actions and resource allocations designed to achieve the organization’s goals Game Plan It refers to the firm’s overall plan for dealing with & existing in the environment STUDENTSFOCUS.COM
29 Operational Plans  Specify the details of how the overall goals are to be achieved  Cover Short time period Rules  Describe how a specific action is to be performed  It is defined as a prescriptive (Regulatory) to people on their conduct & action  Rules seeking to discipline, structure, behavior & task performance of people in formal organizational settings Examples STUDENTSFOCUS.COM
30 Procedures Define a precise series of steps (Sequential manner) to be used in achieving a specific job  Procedures are meant to standardized & routines the pattern  It guide employees into action  Producers are practical applications of polices STUDENTSFOCUS.COM
31 Programs Program is a complex set of objectives and plans to achieve an important, one-time organizational goal Project is similar to a program, but generally smaller in scope and complexity Budgets Budget is statement of expected results expressed in numerical terms It is prepared in terms of money, time, materials or other units required to perform work & accomplish specified results Examples Materials Budget Production Budget Sales Budget Cash flow Budget Profit Budget STUDENTSFOCUS.COM
Objectives Objectives are the important ends toward which organizational & individual activities of are directed  Objectives may be long term or short term , broad or specific  Objective decide where we want go, what we want to achieve & next what is our designation  Actions for achieving the purpose Nature of Objectives Objective state end results & overall need to be supported by sub objectives 1. Purpose of Society (Welfare to the people by providing goods & services at reasonable cost) 2. Purpose of Business ( Low wastage high attainment) STUDENTSFOCUS.COM
Individual Employee’s Objective Top Management’s Objective Department Manager’s Objective Division Manager’s Objective “Increase profits, regardless of the means” “I want to see a significant improvement in this division’s profits” “We need to improve the company’s performance” “Don’t worry about quality: just work fast” STUDENTSFOCUS.COM
Setting Objectives OBJECTIVE Who is responsible How will it be accomplished What is to be accomplished When is it to be accomplished Principles of Goal-Setting  Set SMART goals (make them specific, measurable, attainable, relevant & timely)  Assign specific goals.  Assign measurable goals.  Assign possible but challenging goals.  Encourage participation.  Use executive assignment action plans or management by objectives. STUDENTSFOCUS.COM
Features & Characteristics of Objectives 1.Objective should be understandable Must understand where it stands & where it has been Determine what its goals are & how will attain them 2. Objectives should be measurable Compare actual performance with planned target Enable the business to measure the progress towards its stated aims 3. Hierarchy of objectives  All the objectives are not equally important  It should be achieved according to its priority & importance 4. Multiplicity of objectives  Business does not have a single objective. They are multiple in nature  Primary objective of every business is profit followed with customer satisfaction STUDENTSFOCUS.COM
Features & Characteristics of Objectives 5.Acheivable Business goal must be achievable  Achieved by its capabilities & resources 6.Objectives should be specific  Objective must be specific in terms of time, quality & quantity  Specific objectives help in understanding the objectives in the correct manner 7. Quantitative & Qualitative  Objective is expressed in Quantitative & Qualitative terms i.e Volume, Number of value terms, Increase in sales , market share rate of production 8. Flexible  Flexible means “ that keeps on changing”  Business environment keeps on changing STUDENTSFOCUS.COM
MBO – Management by Objectives MBO is intended to improve communication between employees & management , increaser employee understanding of company goals, focus employee efforts upon organizational objectives and provide pay & performance Important factor of MBO : Results achieved by employees rather than the activities performed in their jobs Features of MBO 1. Superior subordination participation 2. Joint goal setting 3. Joint decision on methodology 4. Makes way to attain maximum result 5. Support from superior STUDENTSFOCUS.COM
] MBO Process Step 1: Set Goals Step 2: Develop Action Plans Step 3: Review Progress Corporate Strategic Goals Departmental goals Individual goals Step 4: Appraise Overall Performance Appraise Performance Take Corrective Action Review Progress Action Plans STUDENTSFOCUS.COM
Steps in management by objective STUDENTSFOCUS.COM
Benefits of MBO  Developed result oriented philosophy  Facilitates effective planning Manager and employee efforts are focused on activities that will lead to goal attainment  Facilitates effective control  Facilitates personal leadership  Performance can be improved at all company levels  Acts in motivational force : Employees are motivated  Departmental & individual goals are aligned with company goals Limitations of MBO * Time Consuming * Lack of Appreciation * Reward Punishment approach * Problem of coordination * Develops conflicting objectives * Lacks durability STUDENTSFOCUS.COM
POLICIES Policies provide the framework within which the decision makers are expected to operate while making decisions related to an organization. They are guide to the thinking and action of subordinates for the purpose of achieving the objectives of the business successfully. Nature of policy 1. Policy is an expression of intentions of top management. 2. It serves as a guide to decision making in an organization. 3. It should be planned after taking into consideration the long range plans and needs of an organization. 4. As policies live longer than the people therefore the policies should be framed after serious thinking and participation of the top executives. 5. Policies take a concrete step when they are put in writing. STUDENTSFOCUS.COM
Types of POLICIES 1. Basic or top management policy: laid by the top management like product selection, size of business, budgeting etc. 2. Middle management policies: general policies affecting a large part of organization. E.g. purchase policy 3. Departmental Policies: applies to routine activities e.g. workers related matters 4. Written and verbal policies 5. Implied policies: which actually exist in a company. Such policies can be known only by watching the actual working of an organization. 6. Functional policies: e.g. marketing policies, finance policies, research policies, and recruitment policies. 7. Policy manual: where all policies are compiled in the form of a book is called a policy manual. STUDENTSFOCUS.COM
ADVANTAGES OF POLICIES 1. Better performance 2. Helps in control 3. Better industrial relations 4. Helps in enhancing co-operation 5. Consistency Steps in Policy Formulation 1. Establish need for a Policy 2. Develop policy content 3. Draft the Policy 4. Write the procedure 5. Review of the policy by key parties 6. Approve the policy 7. Implement the policy 8. Policy review & update 9. Communication of changes to the policy STUDENTSFOCUS.COM
PLANNING PREMISES Premising Planning is made dependent upon certain assumptions. some information are available & some are not. It constitutes a framework in which planning is to be done. Planning premises are made taking into consideration both the past as well as the expected events. For planning premises managers may not face any uncertainty for implementing planning H.Koontz Planning premises are identified as the anticipated environment in which plans are expected to operate C.B.Gupta Planning premises are the critical factors which lay down the boundary for planning STUDENTSFOCUS.COM
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TYPES OF PLANNING PREMISES 1.Internal premises originate from factors within the premise  Sales forecast  Existing Internal policies & procedures  Capital investment  Personnel forecasts (Skills & abilities of personnel)  Workers 2. External premises originate from factors outside the organization  Political forces  Social forces  Technological forces  Economical forces  Cultural forces These are beyond the powers of any organization. STUDENTSFOCUS.COM
1. Controllable premises are those within the control of a business factors like ** Materials ** Money ** Machine ** Policies ** Procedures ** Programs 2. Semi controllable These are under partial control of a business factors ** Labor relations ** Marketing strategy. 3. Non controllable Which are beyond the control of any organization like ** Government policy ** Wars ** Natural calamities ** Whether conditions ** Customers behavior STUDENTSFOCUS.COM
1.Tangible premises can be measured in terms of quantitative terms ** Production of sale ** Money ** Time ** Hours of work 2.Intangible premises Cannot measured factors ** Employee Moral ** Employee Attitude ** Public Relations 1.Constant premises Do not change they remain the same even if there is change in the course of action they include ** Men ** Money ** Machine 2. Variable premises Subject to change they change according to the course of action they include ** Union Management Relations STUDENTSFOCUS.COM
49 Strategies Strategies – Military used word It is a set of decision making rules for guidance of organizational behavior Major targets or end results that relate to the long-term survival, value & growth of the organization A pattern of actions and resource allocations designed to achieve the organization’s goals Types of strategies Strike while the iron is hot Camel’s head in the tent Strength in unity Divide and rule Times is a great healer One step ahead Game Plan It refers to the firm’s overall plan for dealing with & existing in the environment STUDENTSFOCUS.COM
50 Divide & Rule STUDENTSFOCUS.COM
51 Features 1.It is a general program of action 2.More concerned with external problems rather than internal 3.It includes tactics used by the opponents 4.They need to be changed as per the requirements 5.Formulated only at the top level Strategic Planning  Where will we be active?  How will we get there?  How will we win in the marketplace?  How fast will we move and in what sequence will we make changes?  How will we obtain financial returns STUDENTSFOCUS.COM
52 Strategic management A process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies Strategic Management Process STUDENTSFOCUS.COM
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54 Planning Tools & Techniques for Strategic Management Strategic management process has more complex & costly Growing competitions in many markets & combination of Dimensions is increasing of analysis facing managers. Strategic managers, variety of tools & techniques have been developed Important Strategies are  SWOT Analysis  BCG Matrix Porter’s Five force model Gap Analysis Balance score card STUDENTSFOCUS.COM
55 SWOT or TOWS SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. Importance of SWOT analysis It analyses whether the business is healthy or sick. Identifying the internal and external factors that are favorable and unfavorable to achieving that objective It helps in the formation of a strategy so as to make preparations for the possible threats from the competitors. It helps to evaluate a business environment in a detailed manner so as to take strategic decisions for the future course of action. STUDENTSFOCUS.COM
56 Internal External STUDENTSFOCUS.COM
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60 BCG Matrix Boston Consulting Group (BCG) Growth share matrix compare various businesses organization profit on the basis of relative market share & market growth rate +5 +4 +3 +2 +1 0 -1 -2 -3 -4 -5 % 12 % 10 % 08 % 06 % 04 % 02 MGR = Individual sales - individual sales this year last year Individual sales last year RMS = Business unit sales this year Leading rival sales this year Problem Child SBU – Strategic Business Unit , BCG matrix defines four business group STUDENTSFOCUS.COM
61 Factors Question Marks Stars Cash cows Dogs Cash Flow Negative Natural High Stable Natural or Negative Earnings Low , Unstable, Growing High stable , Growing High Stable Low ,Unstable Strategy Analysis to determine whether business can be grown into a star or will degenerate into a dog Invest for growth Milk Divest (Cheat) Don’t know what to do with opportunities ,decide whether to increase investment Doing well great opportunities Doing well in no growth market with limited opportunities Weak in market , difficult to make profit Concept Low Market Share & High Market Growth High Market Share & High Market Growth High Market Share & Low Market Growth Low Market Share & Low Market Growth STUDENTSFOCUS.COM
62 Porter’s 5 Forces Competitive Model Intra-Industry Rivalry Strategic Business Unit Bargaining Power of Buyers Bargaining Power of Suppliers Threat of Substitute Products & Services Threat of New Entrants A competitive strategy is a strategy for how an organization will compete In its businesses . In any industry, 5 forces dictate the rules of competition How likely is it that new Competitors will come into the industry ? How likely is it that other industry products can be substituted for our industry products ? How much bargaining power do buyers (Customers) have ? How much bargaining power do suppliers have ? How intense is the rivalry among current industry competitors STUDENTSFOCUS.COM
63 Threat of new entrants This force examines how easy or difficult it is for competitors to join the market place Bargaining Power of Suppliers This force analyzes how much power a business’s supplier has & how much control it has over the potential to raise its prices Bargaining Power of Buyers Power of customers to affect pricing & quality Buying power is more  Easy to switch from one business products to another Buying power is low  Customers purchase products in small amounts Threat of substitute Products & Services This force studies  Consumers to switch from a business product to that of a competitor  How much competitors there are, How their prices & quality  How much of a profit those competitors are earning Competitive Rivalry This force examines how intense the competition currently is in the market place [ Rivalry is high  Price wars can develop & industry is growing] STUDENTSFOCUS.COM
64 Gap Analysis Gap analysis is a tool that organizational managers can use to work out the size, and sometimes to shape of the strategic tasks to be undertaken in order to move from its current state to a desired or future state STUDENTSFOCUS.COM
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66 Balance scorecard Balanced scorecard enables organizations to bridge the gap between strategy & actions  Respond immediately to progress  Feedback & changing conditions  It focus financial , customer, internal business process ,learning & growth perspectives  It focuses on creating & communicating a total comprehensive picture to all members of organization STUDENTSFOCUS.COM
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68 Decision Making Decision making means to select a course of action from two or more alternatives. It is done to achieve a specific objective or to solve a specific problem Making effective decisions, as well as recognizing when bad decision has been made & quickly responding to mistakes. It is key component in organization It is process of Identifying Opportunities. It is a judgment STUDENTSFOCUS.COM
69 Importance of Decision making  Better utilization of resources ( All available 6 M resources – Men, Money, Materials , Machines, Methods & Markets)  Facing Problems & Challenges (Decision making tackle new Problems & Challenges) Business Growth  Achieving objectives Increases efficiency Facilities innovation Motivate employees Team Work No organizations can be run without making decisions A key role of officers Or managers STUDENTSFOCUS.COM
70 Types of Decision Making Routine , almost automatic process Managers have made decision many times before There are rules & guidelines to follow Example : Deciding to reorder office supplies Programmed Decisions Non Programmed Decisions Unusual situations Managers have made decision based on information, intuition (feeling – 6th Sense) & judgment  No rules & guidelines to follow since the decision is new Example : Firm investment in new technology Mechanistic Decisions Analytical Decisions Judgmental Decisions Adaptive Decisions STUDENTSFOCUS.COM
71 Steps in Decision Making Process STUDENTSFOCUS.COM
72 Step 1 : Defining & analyzing the problem  Identify the real problem separately from its symptoms Symptoms Underlying Problems 1. Low profits/declining sales Poor market research 2. High cost Poor design process, poorly trained employees 3. Low morale Lack of communication between management and subordinates 4. High employee turnover Rate of pay too low, job design not suitable “ A successful manager doesn’t just attack symptoms; He works to uncover the factors that cause these symptoms” STUDENTSFOCUS.COM
73 Step 2 :Developing alternative solutions  Make Different solutions for solving the problem one of the best methods for developing alternatives is through Brainstorming Brainstorming  where a group works together to generate ideas and alternative solutions Step 3 :Evaluating the alternative solutions  Should carefully evaluate the merits & demerits of each alternative  Should compare the cost ,risk & practicability STUDENTSFOCUS.COM
74 Step 4 : Selecting the best solution  Should select the best solution which is less costly & less risky  And also solution must be feasible & accepted by employees  The best solution is called Decision Step 5 :Implementing the Decision  Should communicate the decision to the employees  Provide all resources to employees  Should involving them in the decision making process STUDENTSFOCUS.COM
75 Step 6 : Follow up & Corrective Action  Must do follow up  Must get the feedback about the decision  Find whether decision was effective or not  Finding out the deviations, taking essential steps to remove these deviations  Follow up is just like the control function. It helps to improve the quality of future decisions STUDENTSFOCUS.COM
76 Limitations of Decision making  Compromised decisions  It may not be correct or Bold  Subjective (Group than individual) decisions  Biased decisions  Benefit himself & his group  Uncontrollable Environmental factors  Responsibility is diluted  Everybody’s responsibility is nobody responsibility Decision making under different conditions STUDENTSFOCUS.COM

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POM -UNIT-2-PLANNING.pdf

  • 1.
    Unit 2 :Planning Planning Nature and purpose of planning Steps in Planning process Types of planning Objectives Setting objectives Policies Planning premises Strategic Management Planning Tools and Techniques Decision making steps and process. STUDENTSFOCUS.COM
  • 2.
    GOAL,PLAN & PLANNING 2 GOAL Adesired future state that the organization attempts to realize. PLAN A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals PLANNING Determining the organization’s goals and the means for achieving them – the most fundamental management function – the most controversial management function STUDENTSFOCUS.COM
  • 3.
    Definition of Planning 3 Weihrich& Koontz Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making, that is, choosing best alternative from the available future courses of action. McFarland Planning may be broadly defined as a concept of executive action that embodies the skills of anticipating, influencing & controlling the nature & direction of change. Terry Planning is the selection & relating of fact & making & using of assumption regarding the future in the visualization & formation of proposed activities believed necessary to achieve desired result.” A job well planned is half done Planning bridges the gap from where we are to where we want to go STUDENTSFOCUS.COM
  • 4.
    Nature & Featuresof planning 4 Planning focuses on achieving objectives  Planning is an intellectual process  It is a way to achieve the objective is decided in the planning Planning is primary function of management  It is the first and foremost function of management  It lead all other managerial functions  Planning is the most basic to all management functions Planning is pervasive  Planning is an important function of every manager (All levels of manager)  Planning is pervasive(enveloping) function of management Planning is futuristic  Planning is flexible because future is always dynamic  Planning determines the future course of action  Primarily concerned with looking into future STUDENTSFOCUS.COM
  • 5.
    5 Planning is continuous It is involving complex processes of perception, analysis, conceptual thought, communication, decision & action  Plans are prepared for a particular period. Hence there is need for new plan after the expiry of that period Planning involves decision making  Choosing best alternative from the available future courses of action.  Involves selection of suitable course of action, means there are several alternatives for achieving objectives Planning is a mental exercises  It is a process of thinking before doing  It is deciding in advance What to do? How to do it? When do it? Who is to do? . “Without the activities determined by planning, there would be nothing to organize, no one to activate and no need to control”. George R. Terry STUDENTSFOCUS.COM
  • 6.
    Importance of planning 6 Planningprovides direction  Gives direction to all the activities of an organization  The attention of all the managers will get focused on the attainment of their objectives Planning reduces risks of uncertainty  Future are anticipated & various activities are planned, the risk of future uncertainties can be minimized  Provides certainty in the activities  Planning establishes coordinated effort  Manage complexities & competition Planning reduces overlapping and wasteful activities  Problems of when, where, what and why are almost decided  Helps in effective forecasting (predict) Planning establishes goals and standards used in controlling STUDENTSFOCUS.COM
  • 7.
    7 Planning promotes innovativeideas It is clear that planning selects the best alternative out of the many available  Making effort of discovery, new ideas emerge and they are studied intensively in order to determine the best out of them  Planning imparts a real power of thinking in the managers  It leads to the birth of innovative & creative ideas Formal planning is associated with Higher return on assets and Higher profits Planning facilities decision making To increase organzation effectiveness Provides economy in the management Helpful in the accomplishment of budgets STUDENTSFOCUS.COM
  • 8.
    Making management planningmore effective 8 Planning has to be precise and effective for the success of the organization Create climate for planning  Smoothly & systematically planned  Stepwise sequence needs to be created  This can be achieved by establishing clear cut goals Support from the top management  Planning cannot be initiated until and unless the top management supports  Need continuous attention, they must be willing to extend a helping hand whenever required Equal participation  Secure acceptance and commitment from each and everyone in the organzation  Encourage subordinates participation STUDENTSFOCUS.COM
  • 9.
    Benefits of planning 9 Reduces uncertainty  Encourage innovation & creativity  Improves motivation  Achieve better coordination  Facilitates control  Planning leads to success  Focuses attention Just planning is not enough 6 Ps in planning 1.Purpose 2.Philosophy 3.Premise 4.Policies 5.Plans 6.Priorities STUDENTSFOCUS.COM
  • 10.
    10 Proper communication  Needproper & well developed communication network hence goals, premises, and polices  Must be communicated to people  Time limits must also be communicated in advance Integration  All the plans that have been formulated must be properly balanced & integrated with the organizational mission statement  Minimum wastage of the efforts & the resources Strict monitoring  Plans must be subjected to regular and appraisal in view of the dynamic nature of the environment both internal & external changes STUDENTSFOCUS.COM
  • 11.
    Steps in Planningprocess 11  Plans may be major or minor in nature  Minor plans are simpler and easily made  Making Major plans require a detailed action plan STUDENTSFOCUS.COM
  • 12.
  • 13.
    Steps in Planning process 13 Identificationof Opportunities Determination of Objectives Developing Planning Premises Identification of Alternatives Evaluation of Alternatives Selection of Best Alternatives Formulating Derivative Plans Communicating the Plan Follow up Measures STUDENTSFOCUS.COM
  • 14.
    14 Being Aware ofOpportunity In light of  Market  Competition  What Customers want  Our Strengths  Our Weakness It is not a part of planning process. This is real staring point both within & outside the organization All mangers should know Where they stand, in the light of their strengths & weaknesses. Also they should understand what problems they wish to solve & why, and know what they expect to gain. Planning requires realistic finding of the opportunity STUDENTSFOCUS.COM
  • 15.
    15 Determination of theobjectives Objectives set must clearly indicate  What is to be achieved  Where action should take place  Who should perform it  When it is to be accomplished STUDENTSFOCUS.COM
  • 16.
    16 Developing Planning premises Planningis forward looking. Therefore planning is based on Forecasting (Assumption or Predict or Calculate) Forecasting is made in the following ways 1. What will be the market force ? Market forces refers to demand, supply, buying capacity & the like 2. Expectation of volume of sales 3. What kind of products are to be sold & in what price ? 4. What would be their manufacturing costs? 5. What would be the tax policy & economic policy of the Government ? 6. Expectation of technology change in production 7. How is the finance raised for expansion and/or modernization of the business ? Sufficient information must be collected in order to make plans and sub plans, Also must be done in terms of external and internal Environment STUDENTSFOCUS.COM
  • 17.
  • 18.
    18 Identification of Alternatives Usually, there are several alternatives for any plan.  The manager should try to find out all the possible alternatives  should Screen out most viable (workable) alternative  To analyze in detail a limited number of alternatives STUDENTSFOCUS.COM
  • 19.
    19 Evolution of Alternatives Afterseeking out alternative courses and examine their strong and weak points  Most profitable  Immediate profitable  Uncertainty  Cash position & Capital availability  Large cash outlay & slow payback  Less profitable less risk (Easy) Less tension more work More work less tension STUDENTSFOCUS.COM
  • 20.
    20 Selection of BestAlternative After evaluating the various alternatives the best alternative should be selected for implementation STUDENTSFOCUS.COM
  • 21.
    21 Formulation of Derivativeplans (Secondary Plans)  Next step is to develop detailed sub plans for its implementation  Derivative plans are required to support the overall plans  Derivative plans are developed in the frame work of overall plans STUDENTSFOCUS.COM
  • 22.
    22 Communicating the Plan It is very important to get the cooperation of the subordinates at every stage of its implementation  Securing participation of employees : Successful execution of Any plan depends upon the extent participation of employees  The management should involve employees in planning through communication, consultation and participation STUDENTSFOCUS.COM
  • 23.
    23 Follow-up measures (Evaluation) The management should watch how planning is being done  To ensure the plans are proceeding along the right lines  Continuous evaluation of planning is also necessary  It means that the actual performance is compared with the planning & the corrective action is taken if there is any deviation STUDENTSFOCUS.COM
  • 24.
    24 TYPES OF PLANS (Classificationof Planning) In the process of planning several specific plans are prepared which may broadly be classified into two categories 1.Standing Plans 2.Single Use Plans STUDENTSFOCUS.COM
  • 25.
    25 Standing Plans  Repeateduse Plans  Long Term Plans & are related to the entire organization  These plans serve the purpose for a longer time  Examples : Purpose, Objective, Polices, Strategies Purpose or Mission The purpose is a brief statement identifying the reason that an organization exists (future aim or function)  Every organization have meaningful purpose or mission  Mission gives a clear cut idea about basic long run commitment of an organization Mission of organization may be two fold 1. Production & Distribution of goods or services 2. Provision of employment & source of income to people STUDENTSFOCUS.COM
  • 26.
    26 Purpose State High WayDepartment  Design, Building & operation of a system of state highways Court  Interpretation of laws & their applications University  Teaching, Research, Consulting & Training Mission Reliance Oil Company  To search for oil & to produce variety of petroleum products ranging from fuel to chemicals IIT, Chennai  It provides intellectual leadership in chosen fields of technology & management IIM, Ahmadabad  Teaching, Training, Consulting. It also aims to improve India’s economy such as agriculture, education, health, population control, energy & public administration NASA  Send Red rover to Mars & find out if there were any water traces on the red planet STUDENTSFOCUS.COM
  • 27.
    Objectives or Goals Theseare the end towards which the activities of an organization are directed.  Objective decide what to do  Objective decide where we want go, what we want to achieve & next what is our designation  Actions for achieving the purpose STUDENTSFOCUS.COM
  • 28.
    28 Polices These are generalstatements or understandings that guide or channel thinking in decision making  Policy decides How to do  Polices are framed to achieve the objective efficiently Guides to action Strategies Strategies – Military used word It is a set of decision making rules for guidance of organizational behavior Major targets or end results that relate to the long-term survival, value & growth of the organization A pattern of actions and resource allocations designed to achieve the organization’s goals Game Plan It refers to the firm’s overall plan for dealing with & existing in the environment STUDENTSFOCUS.COM
  • 29.
    29 Operational Plans  Specifythe details of how the overall goals are to be achieved  Cover Short time period Rules  Describe how a specific action is to be performed  It is defined as a prescriptive (Regulatory) to people on their conduct & action  Rules seeking to discipline, structure, behavior & task performance of people in formal organizational settings Examples STUDENTSFOCUS.COM
  • 30.
    30 Procedures Define a preciseseries of steps (Sequential manner) to be used in achieving a specific job  Procedures are meant to standardized & routines the pattern  It guide employees into action  Producers are practical applications of polices STUDENTSFOCUS.COM
  • 31.
    31 Programs Program is acomplex set of objectives and plans to achieve an important, one-time organizational goal Project is similar to a program, but generally smaller in scope and complexity Budgets Budget is statement of expected results expressed in numerical terms It is prepared in terms of money, time, materials or other units required to perform work & accomplish specified results Examples Materials Budget Production Budget Sales Budget Cash flow Budget Profit Budget STUDENTSFOCUS.COM
  • 32.
    Objectives Objectives are theimportant ends toward which organizational & individual activities of are directed  Objectives may be long term or short term , broad or specific  Objective decide where we want go, what we want to achieve & next what is our designation  Actions for achieving the purpose Nature of Objectives Objective state end results & overall need to be supported by sub objectives 1. Purpose of Society (Welfare to the people by providing goods & services at reasonable cost) 2. Purpose of Business ( Low wastage high attainment) STUDENTSFOCUS.COM
  • 33.
    Individual Employee’s Objective Top Management’s Objective Department Manager’s Objective Division Manager’s Objective “Increase profits, regardless ofthe means” “I want to see a significant improvement in this division’s profits” “We need to improve the company’s performance” “Don’t worry about quality: just work fast” STUDENTSFOCUS.COM
  • 34.
    Setting Objectives OBJECTIVE Whois responsible How will it be accomplished What is to be accomplished When is it to be accomplished Principles of Goal-Setting  Set SMART goals (make them specific, measurable, attainable, relevant & timely)  Assign specific goals.  Assign measurable goals.  Assign possible but challenging goals.  Encourage participation.  Use executive assignment action plans or management by objectives. STUDENTSFOCUS.COM
  • 35.
    Features & Characteristicsof Objectives 1.Objective should be understandable Must understand where it stands & where it has been Determine what its goals are & how will attain them 2. Objectives should be measurable Compare actual performance with planned target Enable the business to measure the progress towards its stated aims 3. Hierarchy of objectives  All the objectives are not equally important  It should be achieved according to its priority & importance 4. Multiplicity of objectives  Business does not have a single objective. They are multiple in nature  Primary objective of every business is profit followed with customer satisfaction STUDENTSFOCUS.COM
  • 36.
    Features & Characteristicsof Objectives 5.Acheivable Business goal must be achievable  Achieved by its capabilities & resources 6.Objectives should be specific  Objective must be specific in terms of time, quality & quantity  Specific objectives help in understanding the objectives in the correct manner 7. Quantitative & Qualitative  Objective is expressed in Quantitative & Qualitative terms i.e Volume, Number of value terms, Increase in sales , market share rate of production 8. Flexible  Flexible means “ that keeps on changing”  Business environment keeps on changing STUDENTSFOCUS.COM
  • 37.
    MBO – Managementby Objectives MBO is intended to improve communication between employees & management , increaser employee understanding of company goals, focus employee efforts upon organizational objectives and provide pay & performance Important factor of MBO : Results achieved by employees rather than the activities performed in their jobs Features of MBO 1. Superior subordination participation 2. Joint goal setting 3. Joint decision on methodology 4. Makes way to attain maximum result 5. Support from superior STUDENTSFOCUS.COM
  • 38.
    ] MBO Process Step 1:Set Goals Step 2: Develop Action Plans Step 3: Review Progress Corporate Strategic Goals Departmental goals Individual goals Step 4: Appraise Overall Performance Appraise Performance Take Corrective Action Review Progress Action Plans STUDENTSFOCUS.COM
  • 39.
    Steps in managementby objective STUDENTSFOCUS.COM
  • 40.
    Benefits of MBO Developed result oriented philosophy  Facilitates effective planning Manager and employee efforts are focused on activities that will lead to goal attainment  Facilitates effective control  Facilitates personal leadership  Performance can be improved at all company levels  Acts in motivational force : Employees are motivated  Departmental & individual goals are aligned with company goals Limitations of MBO * Time Consuming * Lack of Appreciation * Reward Punishment approach * Problem of coordination * Develops conflicting objectives * Lacks durability STUDENTSFOCUS.COM
  • 41.
    POLICIES Policies provide theframework within which the decision makers are expected to operate while making decisions related to an organization. They are guide to the thinking and action of subordinates for the purpose of achieving the objectives of the business successfully. Nature of policy 1. Policy is an expression of intentions of top management. 2. It serves as a guide to decision making in an organization. 3. It should be planned after taking into consideration the long range plans and needs of an organization. 4. As policies live longer than the people therefore the policies should be framed after serious thinking and participation of the top executives. 5. Policies take a concrete step when they are put in writing. STUDENTSFOCUS.COM
  • 42.
    Types of POLICIES 1.Basic or top management policy: laid by the top management like product selection, size of business, budgeting etc. 2. Middle management policies: general policies affecting a large part of organization. E.g. purchase policy 3. Departmental Policies: applies to routine activities e.g. workers related matters 4. Written and verbal policies 5. Implied policies: which actually exist in a company. Such policies can be known only by watching the actual working of an organization. 6. Functional policies: e.g. marketing policies, finance policies, research policies, and recruitment policies. 7. Policy manual: where all policies are compiled in the form of a book is called a policy manual. STUDENTSFOCUS.COM
  • 43.
    ADVANTAGES OF POLICIES 1.Better performance 2. Helps in control 3. Better industrial relations 4. Helps in enhancing co-operation 5. Consistency Steps in Policy Formulation 1. Establish need for a Policy 2. Develop policy content 3. Draft the Policy 4. Write the procedure 5. Review of the policy by key parties 6. Approve the policy 7. Implement the policy 8. Policy review & update 9. Communication of changes to the policy STUDENTSFOCUS.COM
  • 44.
    PLANNING PREMISES Premising Planning ismade dependent upon certain assumptions. some information are available & some are not. It constitutes a framework in which planning is to be done. Planning premises are made taking into consideration both the past as well as the expected events. For planning premises managers may not face any uncertainty for implementing planning H.Koontz Planning premises are identified as the anticipated environment in which plans are expected to operate C.B.Gupta Planning premises are the critical factors which lay down the boundary for planning STUDENTSFOCUS.COM
  • 45.
  • 46.
    TYPES OF PLANNINGPREMISES 1.Internal premises originate from factors within the premise  Sales forecast  Existing Internal policies & procedures  Capital investment  Personnel forecasts (Skills & abilities of personnel)  Workers 2. External premises originate from factors outside the organization  Political forces  Social forces  Technological forces  Economical forces  Cultural forces These are beyond the powers of any organization. STUDENTSFOCUS.COM
  • 47.
    1. Controllable premisesare those within the control of a business factors like ** Materials ** Money ** Machine ** Policies ** Procedures ** Programs 2. Semi controllable These are under partial control of a business factors ** Labor relations ** Marketing strategy. 3. Non controllable Which are beyond the control of any organization like ** Government policy ** Wars ** Natural calamities ** Whether conditions ** Customers behavior STUDENTSFOCUS.COM
  • 48.
    1.Tangible premises can bemeasured in terms of quantitative terms ** Production of sale ** Money ** Time ** Hours of work 2.Intangible premises Cannot measured factors ** Employee Moral ** Employee Attitude ** Public Relations 1.Constant premises Do not change they remain the same even if there is change in the course of action they include ** Men ** Money ** Machine 2. Variable premises Subject to change they change according to the course of action they include ** Union Management Relations STUDENTSFOCUS.COM
  • 49.
    49 Strategies Strategies – Militaryused word It is a set of decision making rules for guidance of organizational behavior Major targets or end results that relate to the long-term survival, value & growth of the organization A pattern of actions and resource allocations designed to achieve the organization’s goals Types of strategies Strike while the iron is hot Camel’s head in the tent Strength in unity Divide and rule Times is a great healer One step ahead Game Plan It refers to the firm’s overall plan for dealing with & existing in the environment STUDENTSFOCUS.COM
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    51 Features 1.It is ageneral program of action 2.More concerned with external problems rather than internal 3.It includes tactics used by the opponents 4.They need to be changed as per the requirements 5.Formulated only at the top level Strategic Planning  Where will we be active?  How will we get there?  How will we win in the marketplace?  How fast will we move and in what sequence will we make changes?  How will we obtain financial returns STUDENTSFOCUS.COM
  • 52.
    52 Strategic management A processthat involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies Strategic Management Process STUDENTSFOCUS.COM
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  • 54.
    54 Planning Tools &Techniques for Strategic Management Strategic management process has more complex & costly Growing competitions in many markets & combination of Dimensions is increasing of analysis facing managers. Strategic managers, variety of tools & techniques have been developed Important Strategies are  SWOT Analysis  BCG Matrix Porter’s Five force model Gap Analysis Balance score card STUDENTSFOCUS.COM
  • 55.
    55 SWOT or TOWS SWOTAnalysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. Importance of SWOT analysis It analyses whether the business is healthy or sick. Identifying the internal and external factors that are favorable and unfavorable to achieving that objective It helps in the formation of a strategy so as to make preparations for the possible threats from the competitors. It helps to evaluate a business environment in a detailed manner so as to take strategic decisions for the future course of action. STUDENTSFOCUS.COM
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  • 60.
    60 BCG Matrix Boston ConsultingGroup (BCG) Growth share matrix compare various businesses organization profit on the basis of relative market share & market growth rate +5 +4 +3 +2 +1 0 -1 -2 -3 -4 -5 % 12 % 10 % 08 % 06 % 04 % 02 MGR = Individual sales - individual sales this year last year Individual sales last year RMS = Business unit sales this year Leading rival sales this year Problem Child SBU – Strategic Business Unit , BCG matrix defines four business group STUDENTSFOCUS.COM
  • 61.
    61 Factors Question MarksStars Cash cows Dogs Cash Flow Negative Natural High Stable Natural or Negative Earnings Low , Unstable, Growing High stable , Growing High Stable Low ,Unstable Strategy Analysis to determine whether business can be grown into a star or will degenerate into a dog Invest for growth Milk Divest (Cheat) Don’t know what to do with opportunities ,decide whether to increase investment Doing well great opportunities Doing well in no growth market with limited opportunities Weak in market , difficult to make profit Concept Low Market Share & High Market Growth High Market Share & High Market Growth High Market Share & Low Market Growth Low Market Share & Low Market Growth STUDENTSFOCUS.COM
  • 62.
    62 Porter’s 5 ForcesCompetitive Model Intra-Industry Rivalry Strategic Business Unit Bargaining Power of Buyers Bargaining Power of Suppliers Threat of Substitute Products & Services Threat of New Entrants A competitive strategy is a strategy for how an organization will compete In its businesses . In any industry, 5 forces dictate the rules of competition How likely is it that new Competitors will come into the industry ? How likely is it that other industry products can be substituted for our industry products ? How much bargaining power do buyers (Customers) have ? How much bargaining power do suppliers have ? How intense is the rivalry among current industry competitors STUDENTSFOCUS.COM
  • 63.
    63 Threat of newentrants This force examines how easy or difficult it is for competitors to join the market place Bargaining Power of Suppliers This force analyzes how much power a business’s supplier has & how much control it has over the potential to raise its prices Bargaining Power of Buyers Power of customers to affect pricing & quality Buying power is more  Easy to switch from one business products to another Buying power is low  Customers purchase products in small amounts Threat of substitute Products & Services This force studies  Consumers to switch from a business product to that of a competitor  How much competitors there are, How their prices & quality  How much of a profit those competitors are earning Competitive Rivalry This force examines how intense the competition currently is in the market place [ Rivalry is high  Price wars can develop & industry is growing] STUDENTSFOCUS.COM
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    64 Gap Analysis Gap analysisis a tool that organizational managers can use to work out the size, and sometimes to shape of the strategic tasks to be undertaken in order to move from its current state to a desired or future state STUDENTSFOCUS.COM
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  • 66.
    66 Balance scorecard Balanced scorecardenables organizations to bridge the gap between strategy & actions  Respond immediately to progress  Feedback & changing conditions  It focus financial , customer, internal business process ,learning & growth perspectives  It focuses on creating & communicating a total comprehensive picture to all members of organization STUDENTSFOCUS.COM
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    68 Decision Making Decision makingmeans to select a course of action from two or more alternatives. It is done to achieve a specific objective or to solve a specific problem Making effective decisions, as well as recognizing when bad decision has been made & quickly responding to mistakes. It is key component in organization It is process of Identifying Opportunities. It is a judgment STUDENTSFOCUS.COM
  • 69.
    69 Importance of Decisionmaking  Better utilization of resources ( All available 6 M resources – Men, Money, Materials , Machines, Methods & Markets)  Facing Problems & Challenges (Decision making tackle new Problems & Challenges) Business Growth  Achieving objectives Increases efficiency Facilities innovation Motivate employees Team Work No organizations can be run without making decisions A key role of officers Or managers STUDENTSFOCUS.COM
  • 70.
    70 Types of DecisionMaking Routine , almost automatic process Managers have made decision many times before There are rules & guidelines to follow Example : Deciding to reorder office supplies Programmed Decisions Non Programmed Decisions Unusual situations Managers have made decision based on information, intuition (feeling – 6th Sense) & judgment  No rules & guidelines to follow since the decision is new Example : Firm investment in new technology Mechanistic Decisions Analytical Decisions Judgmental Decisions Adaptive Decisions STUDENTSFOCUS.COM
  • 71.
    71 Steps in DecisionMaking Process STUDENTSFOCUS.COM
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    72 Step 1 :Defining & analyzing the problem  Identify the real problem separately from its symptoms Symptoms Underlying Problems 1. Low profits/declining sales Poor market research 2. High cost Poor design process, poorly trained employees 3. Low morale Lack of communication between management and subordinates 4. High employee turnover Rate of pay too low, job design not suitable “ A successful manager doesn’t just attack symptoms; He works to uncover the factors that cause these symptoms” STUDENTSFOCUS.COM
  • 73.
    73 Step 2 :Developingalternative solutions  Make Different solutions for solving the problem one of the best methods for developing alternatives is through Brainstorming Brainstorming  where a group works together to generate ideas and alternative solutions Step 3 :Evaluating the alternative solutions  Should carefully evaluate the merits & demerits of each alternative  Should compare the cost ,risk & practicability STUDENTSFOCUS.COM
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    74 Step 4 :Selecting the best solution  Should select the best solution which is less costly & less risky  And also solution must be feasible & accepted by employees  The best solution is called Decision Step 5 :Implementing the Decision  Should communicate the decision to the employees  Provide all resources to employees  Should involving them in the decision making process STUDENTSFOCUS.COM
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    75 Step 6 :Follow up & Corrective Action  Must do follow up  Must get the feedback about the decision  Find whether decision was effective or not  Finding out the deviations, taking essential steps to remove these deviations  Follow up is just like the control function. It helps to improve the quality of future decisions STUDENTSFOCUS.COM
  • 76.
    76 Limitations of Decisionmaking  Compromised decisions  It may not be correct or Bold  Subjective (Group than individual) decisions  Biased decisions  Benefit himself & his group  Uncontrollable Environmental factors  Responsibility is diluted  Everybody’s responsibility is nobody responsibility Decision making under different conditions STUDENTSFOCUS.COM