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planning
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PLANNING
PLANNING
How To Best Meet Your Mission
We must plan for the future, because people who stay in the present will remain in the past.
Abraham Lincoln
WHAT IS PLANNING?• Planning
– involves defining the organization’s goals, establishing an overall strategy, and developing a comprehensive set of plans to integrate and coordinate organizational work
– informal planning - nothing is written down
• little or no sharing of goals
• general and lacking in continuity
– formal planning - written
• defines specific goals
• specific action programs exist to achieve goals
WHY DO MANAGERS PLAN?
– Planning is the primary management function that establishes the basis for all other management functions
– Planning establishes coordinated effort
– Planning reduces uncertainty
– Planning reduces overlapping and wasteful activities
– Planning establishes goals and standards used in controlling
CHARACTERISTICS AND NATURE OF PLANNING • Involves rational approach
• It is a process
• Primary function
• It is an open Systems Approach
• Planning is future oriented
• Involves choice from alternatives
• Planning occurs at all levels of Mgt.
• It is flexible
• Pervasive & Continuous
IMPORTANCE OF PLANNING• Attention on results
• Reduces uncertainty and risk
• Gives sense of direction
• Innovation and creativity
• Helps in coordination
• Guides decision making
• Basis of decentralization
• Provides efficiency
• Facilitates control
LIMITATIONS• Lack of accurate info
• Time and cost
• Inflexibility
• Resistance to change
• Environmental constraints
• Inefficient planning
PLANNING IS PERVASIVE-LEVELS OF PLANNING
•Corporation Level planning•Strategic Business Unit (SBU) Level planning•Functional or Department Level planning•Team or work group level planning•Individual level planning
OTHER PLANNING TYPES• Long term planning
• Intermediate planning
• Short term planning
PLANNING IN THE HIERARCHY OF ORGANIZATIONS
StrategicPlanning
OperationalPlanning
TopExecutives
Middle-LevelManagers
First-LevelManagers
ORGANIZATIONAL MISSION• The Mission states the organization’s
values, aspirations, and reason for existence.
• The Mission Statement is the basis for all following goals and plans.
• Without a clear mission, goals and plans may be developed haphazardly causing the organization to fail.
Goals and Plans
Goals: specify future ends. Desired future state.
Plans: specify the means to future ends. “The blueprint for goal achievement… specifies the necessary resource allocations, schedules, tasks…”
STRATEGIC GOALS AND PLANS• Strategic Goals pertain to the entire
organization (not specific divisions and departments).
• Strategic Plans define the action steps the company will use to attain strategic goals.
TACTICAL GOALS AND PLANS• Tactical Goals apply to middle
management and describe what major subunits must do to to enable the organization to meet its strategic goals.
• Tactical Plans:– Help execute major Strategic Plans.
– Cover a shorter period of time.
OPERATIONAL GOALS AND PLANS• Operational Goals: the specific results
expected of small units, workgroups, and individuals.
• Operational Plans: developed at the lower levels of an organization to specify actions required to achieve operational goals and to support tactical plans.
GOAL CHARACTERISTICS• Be specific and measurable– Quantitive Terms
• Cover key result areas– Contribute most to company performance
• Be challenging but realistic
• Be for a defined time period.
• Be linked to rewards.
TYPES OF PLANS–Types of Plans•Strategic plans - apply to the entire organization–establish organization’s overall goals–seek to position the organization in terms of its environment
•Operational plans - specify the details of how the overall goals are to be achieved–tend to cover short time periods
TYPES OF PLANS• Long-term plans - time frame beyond three years
–definition of long term has changed with increasingly uncertain organizational environments
• Short-term plans - cover one year or less
• Specific plans - clearly defined with little room for interpretation
–required clarity and predictability often do not exist
• Directional plans - flexible plans that set out general guidelines
–provide focus without limiting courses of action
TYPES OF PLANS
Breadth
StrategicOperational
Specificity
DirectionalSpecific
Frequency of Use
Single useStanding
Time Frame
Long termShort term
TYPES OF PLANS
• Single-use plans - one-time plans specifically designed to meet the needs of a unique situation
• Standing plans - ongoing plans that provide guidance for activities performed repeatedly
– include policies, procedures, and rules
TYPES OF PLANS
• Single-use plans are developed to achieve objectives that are not likely to be repeated in the future. Single-use plans include programs, budgets and projects.
• Standing plans are used to provide guidance for tasks performed repeatedly within the organization. The primary standing plans are organizational policies, rules, and procedures
OTHER TYPES OF PLANS
• Long term & Short term
• Formal & Informal Plans
• Proactive & Reactive Plans
• Strategic & Operational Plans
The Planning Process
Planning may be seen as the identification and formulation of the objectives of a business (Goal Setting)Determining Planning PremisesAnalyzing the data (Identifying Alternatives)Evaluation & SelectionImplementation & Review
THE PLANNING PROCESS• Perceive the problem at hand
• Establish what do you want to achieve about it
• Establish the planning premises
• Find out what all can be done to achieve your aim
• Evaluate the various choices you have
• Choose one appropriate plan and keep alternative plans ready
• Work out the finer points of the selected plan
• Establish which activities need to be done and arrange them in a proper sequence
• Implement the plan
The Planning ProcessGOAL SETTING
Identification and formulation of objectives
DEVELOPING PLANSChoices between alternative plans
IMPLEMENTATIONExecution of the plan
Reactive Planning
Revision of goals and plans
Successful Planning Process
Everyone participates Board and staff educated about planningBoard and staff explore new ideasBoard takes advantages of opportunitiesNecessary resources available
Making Planning Effective
Linked to Long term objectivesConsistencyEveryone participates FeasibleFlexibleSimpleTop Management Support
WHAT IS AN OBJECTIVE?
“objective are goals, aims or purposes that organisation wish over varying periods of time”
MANAGEMENT BY OBJECTIVES (MBO)
• A method whereby managers and employees define objectives for every department, project, and person and use them to monitor subsequent performance.
THE NATURE & PURPOSE OF MBO
MBO is concerned with goal setting and planning for individual managers and their units.The essence of MBO is a process of joint goal setting between a supervisor and a subordinate.Managers work with their subordinates to establish performance goals that are consistent with higher organizational objectives.MBO helps clarify the hierarchy of objectives as a series of well-defined means-ends chains.
CHARACTERISTICS• Super-ordinate goals
• Measurable objectives
• Compatibility
• Systematic
• Continuity
• KRA’s
OBJECTIVES• To measure and judge performance
• Relate individual performance to organization’s
• To clarify job done and accomplishments expected
• Increase growth of employees
• Enhance communication b/w superior and subordinates
• Basis of promotion and incentives
• Drives motivation
• Controlling technique
ESSENTIAL STEPS FOR MBO• Set Goals– The most difficult step.
• Develop Action Plan– For both workgroups and individuals.
• Review Progress/ Take corrective action– Periodic during the year.
• Appraise Overall Performance.– Review Annual Goals.
Essential Steps for MBO
Set Goals– The most difficult step.– Concrete– Specific target and timeframe– Assign responsibility
Develop Action Plan– Course of action– For both workgroups and
individuals
Review Progress– Periodicity?– Course corrections
Appraise Overall Performance.– How are we doing?– Do we need to restate our goals?
ADVANTAGES• Improved planning
• Team work
• Effective self control
• Objective appraisal
• Motivation and morale
DISASVANTAGES• Goal setting problems
• Time consuming
• Increased paperwork
• Pressure oriented
• Undermining leadership
• Participation problem
• Inflexibility
MAKING MBO PROCESS EFFECTIVE
If MBO is to be successful, it must start at the top of the organization
Employees must be educated about what MBO is and what their role in it will be.
Managers must implement MBO in a way that is consistent with overall organizational goals.
• Managers tell their subordinates what organizational and unit goals and plans top management has established.
• Managers meet with their subordinates on a one-to-one basis to arrive at a set of goals for each subordinate that both develop and to which both are committed.
• Goals are refined to be as verifiable as possible and achievable within a specified period of time.
• Goals must be written and very clearly stated.
• Managers must play the role of counselors in the goal-setting and planning meeting.
• The meeting should specify the resources that he subordinate will need
• Conducting periodic reviews
• The employee is rewarded on goal attainment.