Ppm Chap-2,Planning (2)

8/3/2019 Ppm Chap-2,Planning (2)

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PLANNING

A concept of executive action thatembodies the skills of anticipating,influencing and controlling the natureand direction of change


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Planning - Top Level Management

Long term 6 months to 5 years &

above.

Formulation of plans.

Allocation of resources.

Planning - Lower level management

short term daily, weekly ormonthly.

Execution of plans.

Utilization of resources.


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NATURE OF PLANNING

Intellectual Activity

Forward-looking

PervasiveContinuous Mental Exercise

Flexible

Goal-oriented Integrative and inter-related


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NATURE OF PLANNING

Planning: A Rational approach

Desired status

status planning required current status T1 T2 Time


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IMPORTANCE OF

PLANNINGPrimacy of planningEconomical

Facilitates decision-makingPromotes coordination and control

Reduces risk and uncertainty

Forecasting Increase organisational effectiveness


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PLANNING

BENEFITS

Focus onobjectives

EconomicalOperation

Innovation

Coordination andControl

Reducesuncertainty

LIMITATIONS

Time consuming andexpensive

Heavy cost and riskinvolved

Probable results

Internal Inflexibilities

External Inflexibilities Problems of rapid

change


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PRINCIPLES OF PLANNING

Principle of co-ordinate planning

Principle of efficiency

Principle of flexibility

Principle of sound and consistentpremising

Principle of contribution to objectives

Principle of acceptance

Principle of commitment

Principle of limiting factors

Principle of navigational change

Principle of timing


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STEPS IN PLANNING

Perception of opportunities

Establishing Objectives

Planning Premises

Identification of Alternatives

Evaluation of alternatives

Choice of alternative plans

Formulation of supportive plans

Establishing sequence of activities


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CLASSIFICATION OF PLANS

ON THE BASIS OF TIME Long-Term plans

Medium-Term plans

Short-Term plans

ON THE BASIS OF FUNCTIONAL AREA

Production plans

Marketing plans

Financial plans


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Tactical Planning :-

Lower levels of management.

Decides the detailed use of resourcesfor achieving each goal.

Short term goals.

More detailed because it is involvedwith day to days operations of theorganization.

No clear cut distinction because attimes divisional plans may beconsidered as tactical plans.


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Operational Plans

Means to support tactical plans.

Highly specific.

Different single use and standing

plans are made in operationalplanning to achieve the overallorganisational goals.


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ON THE BASIS OF USE

STANDING PLANS:

Policies

Procedures

Methods

Rules

SINGLE-USE PLANS:

Programmes

Projects

Budgets

Strategies


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Single use plans specific, developedto achieve particular end.

Are dissolved after the goal isachieved.

Major types of single use plans

programs & budgets.Standing Plans designed for

situations that recur often enough to

justify a standardized approach.Major types procedures, policies,

methods & rules.


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Characteristics of Objectives1. Multiple in nos.:-

Peter Drucker 8 key areas objectives of performance &result have to be set. - market standing,innovation, productivity, physical &

financial resources, profitability,managerial performance & development,work performance & attitude and publicresponsibility.

2. Tangible or intangible.3. Objectives have a priority.

4. Objectives are generally arranged inhierarchy.

5. Sometimes clash with each other.

R i t f S d bj ti


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Requirements of Sound objectives:-

1. Clear & Acceptable.

2. Support one another.

3. Precise & measurable.

4. Always remain valid.

Advantages:-

Provides basis for planning and developing othertypes of plans such as policies, budgets &

procedures. Act as motivators for individuals & departments.

Eliminates haphazard actions which may result inundesirable consequences.

Facilitates coordinated behaviour of variousgroups which otherwise may pull in differentdirections.

Function as a basis for managerial control byserving as standards against which actual

performance can be measured.


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Strategies

Plan which takes into account the

factors like environmental threats &opportunities and organizationalstrengths & weakness and provides

optimal match between the firm &environment.

Essence being to capitalize on ones

strengths while overcomingweaknesses & then attempting tomatch these appropriately with

opportunities.


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STRATEGY FORMULATION &IMPLEMENTATION

Org.

Mission &

ObjectivesAlternatives

Corporate

analysis

Env.

analysis

Choice

of alternative

Implemen

-tation

Review

&

Control

Personal

Values


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Standing Plans

Policies:-

Guidelines for decision-making.

Setting up boundaries around decisions.

Channelizes the thinking of organizationalmembers.

Deal with how to do the work.

Provides only framework within which the decisionsmust be made.

Advantages:-

Ensure uniformity of action Speed up decisions at lower level management.

Easier for superior to delegate more authority tosubordinates.


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TYPES OF POLICIES

Organisational & Functional Policies

Written & Implied PoliciesOriginated, Appealed and Imposed

Policies


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Types of Policies

Classification on the basis of sources:-

Originated -

established formally & deliberately by topmanagers to guide the decisions taken in theorganization. Usually written & embodied inmanual.

AppealedAppeal made by subordinates to his superiorregarding the way of handling a given situation.

Implied

neither stated in writing nor verbal instructiongiven.mere observation of behaviour.

Externally imposed

policies are sometime imposed by external

factors such as government, trade association &


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FACTORS INFLUENCINGPOLICY DETERMINATION

INTERNALFACTORS

Org. goals &

strategies Org. resources

Org. structure

Managerial values

EXTERNALFACTORS

Product marketfactors

Resource marketfactors

Socio-political

Factors


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PROCESS OF MBO

Org.purposes Planning premises

Key Result Areas

Superiorobjectives

Subordinate

agreed objective

Matching resources

Subordinateperformance

Superior recommendationfor subordinate objective

Subordinate statementfor his objective

Performance review& appraisal


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FEATURES OF MBO

Operational & ComprehensiveTechnique

Participative Management

Result oriented

Systems approachConcentration on Key Result Areas


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MBO

BENEFITS

Better morale

Self-control

Clear goals Motivational Force

ImprovePerformance

Appraisal Facilitates better

planning & control

LIMITATIONS

Pressure-oriented

Time consuming

Increases paper work

Problems in goal-setting

Org. problems

Resistance to change

Lack of training Lack of follow-up

Limited application

Failure to teach MBO

philosophy


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ESSENTIALS FOR EFFECTIVEMBO

Purpose of MBO

Top management support

Training for MBO

Participation

Feedback for self-direction & self-control

Implementing at lower levels

MBO & salary decisions

Decentralisation of authority


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NATURE OF DECISION-MAKING

Goal-oriented

Alternatives

Intellectual

Continuous & Dynamic activity

Pervasive

Human & social process

Integral part of planning


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DECISION-MAKING PROCESS

Specific

objectives

Identification

Of

problems

Search

For

alternatives

Evaluation

Of

alternatives

Results Action ChoiceOf

alternative

Feedback


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TYPES OF DECISIONS

Routine & Strategic

Policy & operational Individual & group

Programmed & unprogrammed

Org. & personal


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TECHNIQUES OF DECISION-MAKING

Marginal-cost analysis

Cost-benefit analysisOperation research

Linear Programming

Network analysis

Ppm Chap-2,Planning (2)

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