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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