Unit 2

UNIT II
PLANNING
S.No Topic
UNIT II: PLANNING
2.1 Introduction
2.2 Nature Of Planning
2.3 Purpose Of Planning
2.4 Planning Process
2.5 Types of Planning
2.6 Objectives
2.7 Setting Objectives
2.8 Management By Objectives ( MBO)
2.9 Policies
2.10 Planning Premises
2.11 Strategic Management
2.12 Planning Tools And Techniques
2.12.1 Techniques For Accessing Environment
2.12.2 Techniques For Allocating Resources
2.12.3 Planning Techniques
2.13 Decision Making : Steps And Processes
2
2.1 INTRODUCTION
• Planning is looking ahead and chalking out future course of action to be followed.
• It is a systematic activity which determines when, how and who is going to

perform a specific job.
• Planning is a detailed program regarding future courses of action.
• Definitions
• It is formally defined as follows
• Urwick’s Definition
• Planning is a mental predisposition to do things in orderly way, to think

before acting and to act in the light of facts rather than guesses.
• Planning is deciding best alternative among others to perform different

managerial functions in order to achieve predetermined goals
• Koontz and O‘Donell’s Definition
• Planning is deciding in advance what to do, how to do and who is to do it.

Planning bridges the gap between where we are to, where we want to go. It
makes possible things to occur which would not otherwise occur.
• Planning is important due to the following reasons
• To manage by objectives
• To offset uncertainty and change
• To secure economy in operation
• To help in co-ordination
• To make control effective
• To increase organizational effectiveness
3
2.2 NATURE OF PLANNING
• Planning is goal-oriented
• Every plan must contribute in some positive way towards the

accomplishment of group objectives.
• Planning has no meaning without being related to goals.
• Primacy of Planning
• Planning is the first of the managerial functions.
• It precedes all other management functions.
• Pervasiveness of Planning
• Planning is found at all levels of management.
• Top management looks after strategic planning. Middle management is in

charge of administrative planning. Lower management has to concentrate on
operational planning.
• Efficiency, Economy and Accuracy
• Efficiency of plan is measured by its contribution to the objectives as

economically as possible.
• Planning also focuses on accurate forecasts.
• Co-ordination
• Planning co-ordinates the what, who, how, where and why of planning.
• Limiting Factors
• A planner must recognize the limiting factors (money, manpower etc) and
formulate plans in the light of these critical factors.
• Flexibility
• The process of planning should be adaptable to changing environmental
4
2.3 PURPOSE OF PLANNING
• To manage by objectives
• Planning gives direction to all activities to achieve specific objectives of the

organization
• All managers focused on the attainment of objectives
• Planning reduces risks of uncertainty and change
• Future are anticipated and various activities are planned in advance
• Planning helps in coordinated effort
• Manage complexities & competition
• Planning reduces overlapping and wasteful activities
• Problems of when, where, what and why are almost decided
• Planning establishes goals and standards used in controlling
• Planning promotes innovative ideas
• 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 and creative ideas
• Planning facilities decision making
• To increase organization effectiveness
• Planning helps manager to measure the organization effectiveness and take

further action to improve it
5
2.4 PLANNING PROCESS
• Planning is an intellectual process which an manager carries out before he does

any job with the help of other people.
• It involves the following steps as shown in the figure below.
Steps in Planning Process
• Perception of opportunities
• To ensure the plans are proceeding along the right lines, the actual
performance is compared with the planned performance.
• In this way, any short coming can be noted, and suitable remedial action can
be taken.
• Establishing objectives
• The first step in planning is to identify certain objectives.
• The objectives set must clearly indicate what is to be achieved, where action
should take place, who should perform it and when it is to be accomplished.
• The objectives should be established for the entire organization and for each
and every department.
❖ Planning has no utility if it is not related to certain objectives.
6
• Development of planning premises
• Planning premises are the assumptions and predictions about the future.
• The assumptions are the basis of planning. Forecasting is important in

premising. It helps in making realistic assumptions about sales, costs, prices,
products etc in future.
• This requires a collection of data on present trends and future possibilities.
• Identification of alternative course of action
• Usually, there are several alternatives for any plan. The manager should try
to find out all the possible alternatives.
• At the time of developing alternatives, the manager should screen out most
viable alternatives. So, Manager has to analyze in detail a limited number of
alternatives.
• Evaluation of best alternative
• The various alternatives identified are evaluated and compared in terms of

their expected costs and benefits.
• Many quantitative techniques are available to evaluate alternatives.
• After evaluating the various alternatives, the best alternative should be

selected for implementation.
• Choice of alternative plans
• The next step is to develop detailed alternative plans for its implementation.
• Derivative plans are required to support the overall plans.
• The derivative plans are developed in the framework of overall plans. These
are drawn up with respect to different areas of activity.
7
• Formulating the supporting plan
• It is very important to get the co operation of the subordinates at every

stage of its implementation.
• For this purpose the plans should be communicated and explained to them
so that they can get the clear picture of what to be done.
• An organization is not benefited from planning process until they are put into
action.
• Establishing sequence of activities
• Sufficient information must be collected in order to make plans and sub plans
subsequently.
• Necessary information includes the critical assessment of current status of

the organization together with a forward look at the environment that is
anticipated.
• The collection and forecasting of the information must be done in terms of

external and internal environment.
• The considerations of the external environments know the competitions now

and in the future.
• The assessment of internal environment may consist of the strong and weak
point of the organization.
8
2.5 TYPES OF PLANNING
• Planning is classified into many types based on the following criteria's
• Coverage of organizational activities
• Importance of contents
• Time dimension in planning
• Approach adopted in planning
• Degree of formalization in planning process
• The following table shows the Classification
Dimensions/Criteria Types of Planning
Coverage of activities Corporate and functional planning
Importance of Contents Strategic and tactical/operational

planning
Time period involved Long- term and short-term planning
Approach adopted Proactive and reactive planning
Degree of formalization Formal and informal planning
• CORPORATE AND FUNCTIONAL PLANNING
• CORPORATE PLANNING
• Corporate planning denotes planning activities at the top level

/corporate level.
• It covers the entire organizational activities.
• The basic focus of corporate planning is to determine the long-term

objectives of the organization.
9
• FUNCTIONAL PLANNING
• Functional planning is segmental.
• it is undertaken for each major function of the organization like production/operation,

marketing, finance, human resource/ personnel etc.
❖ STRATEGIC AND TACTICAL/OPERATIONAL PLANNING
❖ STRATEGIC PLANNING
❖ Strategic plans are designed with the entire organization in mind
❖ It begins with an organization's mission.
❖ Top-level managers, such as CEOs or presidents, will design and execute strategic
plans and long-term goals of the organization.
❖ Essentially, strategic plans look ahead to where the organization wants to be in

three, five, even ten years.
❖ Strategic plans, provided by top-level managers, serve as the framework for lower-
level planning.
❖ TACTICAL PLANNING
❖ Tactical plans support strategic plans by translating them into specific plans
relevant to a distinct area of the organization. T
❖ Tactical plans are concerned with the responsibility and functionality of
lower-level departments to fulfill their parts of the strategic plan.
❖ OPERATIONAL PLANNING
❖ Operational plans sit at the bottom of the totem pole.
❖ They are the plans that are made by frontline, or low-level, managers.
❖ All operational plans are focused on the specific procedures and processes that
occur within the lowest levels of the organization.
❖ Managers must plan the routine tasks of the department using a high level of
detail.
10
❖ LONG TERM AND SHORT-TERM PLANNING
❖ LONG-TERM PLANNING
❖ Long-term plans are those that take anywhere from five years to 10 years.
❖ At the time of business launch, long-term plans can appear unrealistic.
❖ Hence, business owners go back and adjust long-term plans to suit the direction
of the company.
❖ MEDIUM-TERM PLANNING
❖ Medium-term planning refers to the plans that may take anywhere from a year to
five years to implement and complete.
❖ Examples of medium-term planning include increasing the income from the

products sold, increasing the product line with 10 new products over a five-year
period
❖ SHORT-TERM PLANNING
❖ Short-term planning addresses goals that can be obtained within a short period of
time.
❖ Short-term usually refers to anything that can be done within a week, such as
getting a website up for the company, to a year.
❖ Short-term plans include selling a certain amount of products each day, publishing
a newsletter on a monthly basis and hiring new employees for marketing.
11
❖ PROACTIVE AND REACTIVE PLANNING
❖ PROACTIVE PLANNING
❖ Proactive planning involves designing suitable courses of action in

anticipation of likely changes in the relevant environment.
❖ Organizations that use proactive planning use broad planning approaches,

broad environment scanning, decentralized control, and reserve some
resources to be utilized for their future use.
❖ RECTIVE
❖ In reactive planning, organization response comes after the environmental

changes have taken place.
❖ After the change, the organization starts planning; in such a situation the
organization lose opportunities. Therefore, their plans do not remain valid in
the changed situations. This approach of planning is useful in an
environment which is stable over a long period of time.
❖ FORMAL AND INFORMAL PLANNING
❖ FORMAL PLANNING
❖ Formal planning is in the form of well structures process .
❖ Generally large organization undertake planning in formal way in which they

create separate corporate planning cell placed high level in organization.
❖ INFORMAL PLANNING
❖ Informal planning is undertaken by smaller organizations.
❖ The planning process is based on manager‘s memory events, institutions and

gut feelings rather than based on systematic evaluation of environmental
happenings.
12
2.6 OBJECTIVES
❖ Objectives are very precise, time-based, measurable actions that support the
completion of a goal.
❖ Features of Objectives
❖ Objectives must be related to the goal directly
❖ Objectives must be clear, concise, and understandable
❖ Objectives must be stated in terms of results
❖ Objectives must begin with an action verb
❖ Objectives must specify a date for accomplishment
❖ Objectives must be measurable.
❖ Objectives are interconnected and mutually supportive
❖ Advantages of objectives
❖ Objectives motivates all members of the organization
❖ It is used to avoid unproductive activities
❖ It provides basis for administrative controls
❖ Objectives connects organization with group of people upon which its

existence depends
13
2.7 SETTING OBJECTIVES
❖ Objectives are set using the following guidelines.
❖ Objective should be understandable
❖ Understand where it stands & where it has been determining what its
goals are & how will attain them.
❖ Objective should be Realistic
❖ Objectives should be achievable even though resources are not

available.
❖ Objective should concentrate on what is important
❖ All the objectives are not equally important
❖ It should be achieved according to its priority & importance
❖ Objective should be results oriented
❖ Objectives should be describe what exactly the organization wants to

achieve
❖ Objectives should be measurable
❖ Objectives enable the business to measure the progress towards its

goals
❖ Objectives should assign responsibility
❖ Objectives assign specific responsibility to every member of the

organization
❖ Objectives should fix time frames
❖ Objectives set deadlines for results to be achieved
14
2.8 MANAGEMENT BY OBJECTIVES(MBO)
• Definition
• Management by Objectives was coined by Peter Drucker in 1954.
• It is defined as strategic management model that aims to improve the

performance of an organization by clearly defining objectives that are agreed to
by both management and employees
• Features of MBO
• It gives emphasis open objectives.
• It focuses attention on appropriate goals and plan
• It reviews performance periodically.
• It is concerned with the participation of all concerned managers .
• It facilitates a shared sense of vision among all the managers
• It provides guidelines for appropriate systems and procedures.
• It facilitates control through the periodic development
• Steps in MBO Process
15
• The typical MBO process consists of:
• Establishing a clear and precisely defined statement of objectives for the

employee
• Developing an action plan indicating how these objectives are to be achieved
• Reviewing the performance of the employees
• Appraising performance based on objective achievement
1. Setting objectives:
• For Management by Objectives (MBO) to be effective, individual managers

must understand the specific objectives of their job and how those objectives
fit in with the overall company objectives set by the board of directors
• The managers of the various units/ sections of an organization should know

not only the objectives of their unit but should also actively participate in
setting these objectives.
• MBOs are written down for each level of the organization, and individuals are
given specific aims and targets.
• Developing action plans

• Actions plans specify the actions needed to address each of the top
organizational issues
• It shows how to reach each of the associated goals who will complete each
action and according to what timeline.
16
• Reviewing Progress
• Performance is measured in terms of results.
• Job performance is the net effect of an employee's effort as modified by

abilities, role perceptions and results produced.
• Progress toward objectives is periodically reviewed.
• Performance appraisal
• Performance appraisals communicate to employees how they are performing

their jobs, and they establish a plan for improvement.
• Performance appraisals encourage performance improvement. Feedback on

behavior, attitude, skill or knowledge clarifies for employees the job
expectations their managers hold for them.
• Benefits of MBO
• It develops the result oriented philosophy
• It facilitates effective planning, effective control and personal leadership
• It leads to goal attainment
• It acts in motivational force for both Employees and Managers
• Limitations of MBO
* Time Consuming
* Reward Punishment approach
* Develops conflicting objectives
* Lacks durability
* Lack of Appreciation
* Problem of coordination
17
2.9 POLICIES
• Policies are guidelines for making decisions.
• Weihrich and Knootz Definition
• Policies are general statements or understandings which guide or

channel thinking in decision making.
• Kotler Definition
• Policies define how the company will deal with stakeholders, employees,
customers, suppliers, distributors and other important groups.
• Policies narrow the range of individual discretion so that employees act

consistently on important issues
• Policies typically contain an ambiguous term that leaves interpretation up to the

decision maker.
• Example of Policy Statements
1. The customer always comes first and should always be satisfied.
2. We promote from within, whenever possible.
3. Employee wages shall be competitive within community

standards.
• In this three sample policies, the terms satisfied, whenever possible, and
competitive require interpretation.
• For instance, the policy of paying competitive wages doesn’t tell a company’s
human resources manager the exact amount he or she should pay, but it does
guide them in making the decision.
NATURE OF POLICY
• RELATIONSHIP TO ORGANIZATION’S OBJECTIVES
• Policies are based on the objectives of the organization and they

contribute towards the attainment of objectives.
18
2.9 POLICIES
• CLARITY OF POLICY
• Policies are clear, definite and explicit leaving no room for

interpretation.
• GUIDELINE TOWARDS DECISION MAKING
• Prescribes the criteria for current and future actions.
• POLICIES ARE WRITTEN
• Policies are stared with precise covering of all anticipated conditions.
• CONSISTENCY
• Policies provides steadiness in various operations of an organization.
• BALANCE OF POLICY
• Policies should maintain balance between stability and flexibility.
STEPS IN POLICY FORMULATION

• Establish need for a Policy
• Develop policy content
• Draft the Policy
• Write the procedure
• Review of the policy by key parties
• Approve the policy
• Implement the policy
• Policy review & update
• Communication of changes to the policy
19
2.9 POLICIES
TYPES OF POLICIES
Policies are classified based on the following characteristics
1. BROADNESS
2. ORIGIN
3. FREEDOM
4. CLARITY
BASED ON BROADNESS
• Policies are classified into two types
• Organizational policies
• It applies to the entire organization and this policy is formulated by the top
level managers.
• Functional or Departmental policies
• It is Applicable for a particular department of the organization, and

Formulated with specific function of business or departments.
• For instance production department policy, marketing department policy,

personnel policy etc.
BASED ON ORIGIN
• Policies are classified into three types
• Basic policies
• It is formulated and laid down by the top level managers in the organization
for effectively guiding the actions of the subordinates
20
2.9 POLICIES
• Appealed policies
• When a new dilemma appears in a unit of the organization over some issue,
the unit head appeals his superiors for a decision.
• This appeal moves upward in the vertical hierarchy of the organization till a
most suitable decision is made.
• Such decisions becomes a ruling on the issue and such rulings in turn
becomes appealed policies.
• Imposed policies
• These policies are formulated under pressure from external agencies like
Governments, Legal Authorities, Industry Associations, Trade Unions etc.
• BASED ON FREEDOM
• Policies are classified into two types
• General polices
• The subordinates have comparatively more freedom to take decision.
• For instance, under the sales policy of the organization, the goods can be
sold on credit.
• Specific policies
• The subordinates has some limitations while taking the decisions.
• For instance, If under the policy - supplying of goods on credit, it is laid

down that the debit balance of any particular customer should not to be
more than Rs 50,000.
21
2.9 POLICIES
BASED ON CLARITY – Policies are classified into two types
• Written policies
• This policy is clarified in writing, the main Advantage is clarification of the

ideas but it is inflexible since cannot be changed at times.
• Oral policies
• This policy is Conveyed or explained through the medium of spoken words

but it is Flexible and can be changed according to the need.
22
2.10 PLANNING PREMISES
• Planning Premises are planning assumptions which is the expected environment of

plans in operation.
• These are forecast data of a factual nature, applicable basic policies and existing
company plans.
• Planning premises include far more than the usual basic forecasts of population,
prices, costs, production and markets.
• According to Koontz and Weihrich, Planning premises are the anticipated

environment in which plans are expected to operate.
• According to Dr.G.R.Terry, Planning premises are the assumptions providing a

background against which the estimated events affecting the planning will take
place.
IMPORTANCE OF PLANNING PREMISES

• It is essential to prepare a well organized plan.
• It reduces the risk of uncertainty.
• It reduces. risk of flexibility
• It enables effective
• It Increases in profitability.
23
• CLASSIFICATION OF PLANNING PREMISES
• Planning premises can be classified in several ways.
• a ) Based on the existence of assumptions and predictions about the business

enterprise, planning premises are classified into Internal and External Premises.
• Internal Premises
• They are internal to the enterprise
• The important internal premises which are internal to the enterprise are the
resources and abilities of the enterprise
• They are about men, machines, money and methods, competence of the
management personnel and skills of the labour force. commitment to certain
plans, wage incentive schemes, the sales forecasts of the enterprise.
• External premises
• External premises are based on factors that prevail outside the enterprise.
• External premises are those assumptions that centre round the various types
of marketing, the product market, materials market, the capital market, the
labour market and so on.
• The key external factors which act as important determinants of all such
markets are
• The political stability;
• Sociological factors;
• Business and economic environment; Cultural factors;
• Population growth;
• Government policies and regulations; Trade cycles; and
• Technological changes
24
b) Based on the possibility of measuring premises quantitatively
• planning premises are classified into Tangible and Intangible planning premises.
• Tangible planning premises are those which can be measured quantitatively.
• Example: Working hour, Monetary unit
• Intangible planning premises defy quantitative measurements because of

their qualitative character.
• Example: Employee welfare, Motivation.
c) Based on the Various Forces,
• planning premises can be classified as Constant factors and Variable factors.
• Constant factors can be ignored in planning because they behave in the

similar way irrespective of the course of action adopted.
• For instance, the capacity of men and machines and the amount of capital
investment are completely controllable factors and they fall within the powers
of management.
• Variable factors have a significant bearing on the sources of planning.
• Accordingly planning premises is expected to have a wide coverage so as to

encompass all the variable factors.
D) Based on the Possibility of Exercising Control
• Planning Premises are classified into three types: Fully controllable premises Partly
controllable premises and Absolutely non-controllable premises
• Fully controllable premises refer to the assumptions about the factors

pertaining to the enterprise. Example: Products, Rules
• These factors are known as controllable premises since they are subject to
the decision of the management.
25
• Partly controllable premises include assumptions about factors that only

partially controllable through suitable management policies and decisions
• Marketing strategy is an example of partly controllable premises
• The plans for any business enterprise will naturally have to be based on proper
assumptions with regard to these factors.
• Absolutely non-controllable premises refer to the assumptions about the

economy, the political situations, strikes, wars, natural calamities, new discoveries
and inventions, emergency, legislation and other similar events during the coming
years,
• They cannot be predicted and controlled at all by the management.
26
EXAMPLES
PREMISES ABOUT RAW MATERIALS
• What type of material and quantity?
• What will be the price of raw material?
• Availability of raw material resource and transportation cost.
• Is there any possibility to prepare required raw material in the company?
• If raw material is going to be purchased , should it be imported or

indigenously acquired?
PREMISES ABOUT PERSONNEL
• How much skilled , unskilled , male, female, workmen, are needed for
implementation of a plan?
• How much training should be imparted in the context of new technological

development ?
• To make an estimate regarding present and future employees.
PREMISES ABOUT ORGANIZATION
• What will be the structure of the organization?
• Coordination among departments.
• Whether to centralize or decentralize the authority?
PREMISES ABOUT BASIC POLICIES
• Whether to give importance to quality or low price?
• Premises about automation of office , Premises for capital.
• The methods of directing to be followed .
• Policies and rules of employment.
27
2.11 STRATEGIC MANAGEMENT
• Strategic management is what managers do to develop the organization’s strategies.
• Strategic Management can be defined as an art and science of formulating, implementing

and evaluating cross-functional decisions that enable an organization to achieve its
objectivesOrganization’s strategies
• This plans show how the organization will do whatever it’s in business to do, how it will
compete successfully, and how it will attract and satisfy its customers in order to achieve
its goals
• Important term often used in strategic management is business model, which simply is
how a company is going to generate revenue.
• It focuses on two things:
1. Whether customers will value what the company is providing
2. Whether the company can make any money doing that.
STRATEGIC MANAGEMENT PROCESS
1. IDENTIFY THE ORGANIZATION’S MISSION, GOALS, AND STRATEGIES

• Every organization needs a mission, It is a statement of its purpose.
• Defining the mission forces managers to identify what it’s in business to do.
• For instance : The mission of Facebook is “a social utility that connects you with the
people around you.”
28
• Components of a Mission Statement
• Customers: Who are the firm’s customers?
• Markets: Where does the firm compete geographically?
• Concern for survival, growth, and profitability: Is the firm committed

to growth and financial stability?
• Philosophy: What are the firm’s basic beliefs, values, and ethical priorities?
• Concern for public image: How responsive is the firm to societal and
environmental concerns?
• Products or services: What are the firm’s major products or services?
• Technology: Is the firm technologically current?
• Self-concept: What are the firm’s major competitive advantage and core
competencies?
• Concern for employees: Are employees a valuable asset of the firm?
STEP 2: DOING AN EXTERNAL ANALYSIS

• Managers should do an external analysis to know what the competitor is
doing, what pending legislation might affect the organization, or what the
labour supply is like in locations where it operates.
• In an external analysis, managers should examine the economic,

demographic, political/legal, sociocultural, technological, and global
components to see the trends and changes.
29
• Once they’ve analyzed the environment, managers need to pinpoint

opportunities that the organization can exploit and threats that it must
counteract or buffer against.
• Opportunities are positive trends in the external environment; threats
are negative trends.
STEP 3: DOING AN INTERNAL ANALYSIS
• Internal analysis provides important information about an organization’s
specific resources and capabilities.
• An organization’s resources are its assets like financial, physical, human, and
intangible that it uses to develop, manufacture, and deliver products to its
customers.
• Its capabilities are its skills and abilities in doing the work activities needed in
its business—“how” it does its work.
• The major value-creating capabilities of the organization are known as its

core competencies.
• Both resources and core competencies determine the organization’s

competitive weapons.
• After completing an internal analysis, managers should be able to identify

organizational strengths and weaknesses.
• Any activities the organization does well or any unique resources that it has
are called strengths.
• Weaknesses are activities the organization doesn’t do well or resources it

needs but doesn’t possess.
• The combined external and internal analyses are called the SWOT analysis,
which is an analysis of the organization’s strengths, weaknesses,
opportunities, and threats.
30
• After completing the SWOT analysis, managers are ready to formulate

appropriate strategies that
(1) Exploit an organization’s strengths and external opportunities,
(2) Buffer or protect the organization from external threats, or

(3) Correct critical weaknesses.
STEP 4: FORMULATING STRATEGIES

• As managers formulate strategies, they should consider the realities of the
external environment and their available resources and capabilities in order
to design strategies that will help an organization achieve its goals.
• The three main types of strategies managers will formulate include

corporate, competitive, and functional.
STEP 5: IMPLEMENTING STRATEGIES

• Once strategies are formulated, they must be implemented.
• No matter how effectively an organization has planned its strategies,

performance will suffer if the strategies aren’t implemented properly.
STEP 6: EVALUATING RESULTS

• The final step in the strategic management process is evaluating results. How
effective have the strategies been at helping the organization reach its goals?
• What adjustments are necessary? After assessing the results of previous

strategies and determining that changes were needed.
TYPES OF CORPORATE STRATEGY

• The three main types of corporate strategies are
1. Growth Strategy
2. Stability Strategy
3. Renewal
31
2.12 PLANNING TOOLS AND TECHNIQUES
1. Techniques for accessing Environment

2. Techniques for allocating Resources
3. Planning Techniques
2.12.1 TECHNIQUES FOR ACCESSING ENVIRONMENT

Environmental Scanning
• Strategic management is what managers do to develop the organization’s

strategies.
• It is screening of large amounts of information to anticipate and interpret

changes in the environment.
• Research has shown that companies that use environmental scanning have
higher
• A fast-growing area of environmental scanning is competitor intelligence.
• It’s a process by which organizations gather information about their

competitors and get answers to questions such as Who are they? What are
they doing? How will what they’re doing affect us?
Global scanning
• Managers have expanded the scope of their scanning efforts to gain vital
information on global forces that might affect their organizations.
• The value of global scanning to managers, largely depends on the extent of

the organization’s global activities.
32
FORECASTING
• Forecasting is an important part of planning and managers need forecasts
that will allow them to predict future events effectively and in a timely
manner.
Quantitative forecasting applies a set of mathematical rules to a series of past

data to predict outcomes.
These techniques are preferred when managers have sufficient hard data that can
be used.
2. Time series analysis : Fits a trend line to a mathematical equation and

projects into the future by means of this equation.
3. Regression models : Predicts one variable based on known or assumed

other variables
4. Econometric models : Uses a set of regression equations to simulate

segments of the economy
5. Economic indicators: Uses one or more economic indicators to predict a

future state of the economy
6. Substitution effect: Uses a mathematical formula to predict how, when, and

under what circumstances a new product or technology will replace an existing
one.
Qualitative forecasting uses the judgment and opinions of knowledgeable

individuals to predict outcomes
1. Jury of opinion - Combines and averages the opinions of experts.
2. Salesforce composition - Combines estimates from field sales personnel of

customers expected purchases
3. Customer evaluation - Combines estimates from established customers

purchases
33
BENCHMARKING
Benchmarking is the process of searching for the best practices among competitors
or noncompetitors that lead to their superior performance.
STEPS IN BENCHMARKING
TECHNIQUES FOR ALLOCATING RESOURCES
Once an organization’s goals have been established, it’s important to determine

how those goals are going to be accomplished.
Before managers can organize and lead as goals are implemented, they must
have resources, which are the assets of the organization (financial, physical,
human, and intangible).
34
BUDGETING
• A budget is a numerical plan for allocating resources to specific activities.
• Managers typically prepare budgets for revenues, expenses, and large capital
expenditures such as equipment.
• How to Improve Budgeting?
1. Collaborate and communicate.

2. Be flexible.
3. Goals should drive budgets—budgets should not determine goals.
4. Coordinate budgeting throughout the organization.
5. Use budgeting/planning software when appropriate.
6. Remember that budgets are tools.
7. Remember that profits result from smart management, not because
you budgeted for them.
TYPES OF BUDGET
35
2.12.2 TECHNIQUES FOR ALLOCATING RESOURCES

Scheduling
• Scheduling is a process of allocating resources by detailing what activities have to
be done, the order in which they are to be completed, who is to do each, and
when they are to be completed.
• Some scheduling tools are Gantt charts, Load charts, and PERT network
analysis.
Gantt charts
• A bar graph with time on the horizontal axis and the activities to be
scheduled on the vertical axis.
• The bars show output, both planned and actual, over a period of time.
• It visually shows when tasks are supposed to be done and compares those
projections with the actual progress on each task.
• It’s a device that lets managers detail easily what has yet to be done to
complete a project and to assess whether an activity is ahead of, behind, or
on schedule.
Gantt chart
36
• Load chart
• It is a modified Gantt chart.
• Instead of listing activities on the vertical axis, load charts list either entire
departments or specific resources.
• This arrangement allows managers to plan and control capacity utilization.
• PERT network analysis

• The program evaluation and review technique (PERT) is highly appropriate
for projects like departmental reorganization, the implementation of a
cost-reduction program, or the development of a new product that required
coordinating inputs from marketing, manufacturing, and product design.
• A PERT network is a flowchart diagram that depicts the sequence of activities

needed to complete a project
• The time or costs associated with each activity.
• To construct a PERT network, there is is a need to know four terms.
• Events are end points that represent the completion of major activities. Activities
represent the time or resources required to progress from one event to another.
• Slack time is the amount of time an individual activity can be delayed without
delaying the whole project. The critical path is the longest or most
time-consuming sequence of events and activities in a PERT network.
37
Project Management:
A project is a one-time only set of activities that has a definite beginning and
ending point in time.
Project management is the task of getting a project’s activities done on time,

within budget, and according to specifications.
Project Management Process
Project manager - The project manager coordinates the project’s activities

with other departments. When the project team accomplishes its goals, it disbands,
and members move on to other projects or back to their permanent work area.
Scenario Planning:
A scenario is a consistent view of what the future is likely to be.
Developing scenarios also can be described as contingency planning; that is, if this
event happens, then we need to take these actions.
38
2.11.3 PLANNING TOOLS
• The most common planning tools are listed below.
1. Critical Question Analysis
2. SWOT Analysis
3. BCG Matrix Pestle Analysis
4. Balanced Scorecard
5. Porter’s Five Force Model
1. Critical Question Analysis
6. Formulating appropriate organizational strategy is a process of critical

question analysis.
7. It aims to find answers the following four basic questions.
• What are the purpose(s) and objectives of the organization?
• Where is the organization presently going?
• In what kind of environment does the organization now exist?
• What can be done to better achieve organizational objectives in the

future?
2. SWOT Analysis
• It is the most useful technique for analyzing a organization's position in the

market.
• It assesses the organization's internal strengths and weaknesses against

external opportunities and threats.
• This can allow a organization to exploit opportunities using its strengths,

while improving upon its weaknesses in order to avoid external threats.
• It is represented in the following form
39
• Strengths
• The resources and capabilities that can be used as a basis for developing a
competitive advantage.
• Examples
• Patents
• Strong brand names
• Good reputation among customers
• Cost advantages from proprietary know-how
• Exclusive access to high grade natural resources
• Weaknesses
• They are absence of certain strengths may be viewed as a weakness
• Example
• Lack of patent protection
• a weak brand name
• poor reputation among customers and high cost structure
40
• Opportunities
External environmental analysis may reveal certain new opportunities for profit
and growth
• Examples
• an unfulfilled customer need
• arrival of new technologies
• loosening of regulations and removal of international trade barriers
• Threats
• Changes in the external environmental also may present threats
• Examples
• shifts in consumer tastes away from the firm's products
• emergence of substitute products
• new regulations and increased trade barriers
• Example : Google
41
• BCG Matrix Pestle Analysis

• It was developed by the Boston Consulting Group
• It uses a 2X2 matrix to identify
• which ones offered high potential
• which were a drain on organizational resources
• It is formulated as follow
• In this diagram, horizontal axis represents market share (low or high) and
vertical axis indicates anticipated market growth (low or high).
• Example : Apple
42
• Balanced Scorecard
• It was developed by Robert Kaplan and David Norton
• It translates an organization’s mission and vision into actual (operational) actions

(strategic planning)
• Balanced Scorecard links four Performance Measures
• How do customers see us? (customer perspective)
• What must we excel at? (internal perspective)
• Can we continue to improve and create value? (innovation and learning

perspective)
• How do we look to shareholders? (financial perspective)
43
• Implementation
• It is implemented using the following seven steps
1. Set up a vision, mission and strategic objectives
2. Perform a stakeholder analysis to gauge the expectations of customers

and shareholders.
3. Make an inventory of the critical success factors
4. Translate strategic objectives into (personal) goals
5. Set up key performance indicators to measure the objectives
6. Determine the values for the objectives that are to be achieve
7. Translate the objectives into operational activities.
• Porter’s Five Force Model

• Five Forces Model Developed by Michael E. Porter.
• It is an important tool for assessing the potential for profitability in an

industry.
• It is also useful as a way of assessing the balance of power in more general

situations.
• It works by looking at the strength of five important forces that affect

competition.
• Supplier Power
• Buyer Power
• Competitive Rivalry
• The Threat of Substitution
• The Threat of New Entry
44
• The structure of the of this tool is given below
• Example : Wipro
45
• PESTLE ANALYSIS
• PESTLE analysis, which is also known as PEST analysis, is a concept in marketing

principles.
• It is used as a tool by companies to track the environment where they are

operating in or are planning to launch a new project/product/service etc.
• PESTLE stands for Political, Economic, Social, Technological, Legal and

Environment.
• It gives a bird’s eye view of the whole environment from many different angles.
• It tries to find answers for key questions during the analysis.
• They are:
• What is the political situation of the country and how can it affect the
industry?
• What are the prevalent economic factors?
• How much importance does culture has in the market and what are its
determinants?
• What technological innovations are likely to pop up and affect the market
structure?
• Are there any current legislations that regulate the industry or can there be
any change in the legislations for the industry?
• What are the environmental concerns for the industry?
46
2.12 DECISION MAKING
• Managers at all levels and in all areas of organizations make decisions. That is,
they make choices. For instance, top-level managers make decisions about
their organization’s goals, where to locate manufacturing facilities, or what new
markets to move into. Middle and lower-level managers make decisions about
production schedules, product quality problems, pay raises, and employee
discipline.
Steps involved in Decision Making:
47
• Identifying a problem.
• Every decision starts with a problem, a discrepancy between an existing and a
desired condition.
• How do managers identify problems? In the real world, most problems don’t come
with neon signs flashing “problem.”
• Managers also must be cautious not to confuse problems with symptoms of the
problem. What one manager considers a problem might not be considered a
problem by another manager.
• Also, a manager who resolves the wrong problem perfectly is likely to perform just
as poorly as the manager who doesn’t even recognize a problem and does nothing.
As you can see, effectively identifying problems is important, but not easy.
• Let us take the following example. A sales representative is having problem with his
Laptop. This is the identified problem.
• Identifying decision criteria.

• Once a manager has identified a problem, he or she must identify the decision
criteria that are important or relevant to resolving the problem.
• Every decision maker has criteria guiding his or her decisions even if they’re not
explicitly stated.
• The decision criteria for our sales rep are memory and storage capabilities, display
quality, battery life, warranty, and carrying weight.
• Allocating weights to criteria.

• If the relevant criteria aren’t equally important, the decision maker must weight the
items in order to give them the correct priority in the decision.
• The simple way is to give the most important criterion a weight of 10 and then
assign weights to the rest using that standard.
• You could use any number as the highest weight.
48
• Weights of the criteria for our example are below.
• Developing alternatives
• The fourth step in the decision-making process requires the decision maker
to list viable alternatives that could resolve the problem.
• The decision maker needs to be creative. And the alternatives are only listed,
not evaluated just yet.
• Below is the alternative development for our sales rep example.
49
• Analyzing alternatives
• After identifying the alternatives, a decision maker must evaluate each one.
• By using the criteria established in Step 2 and by giving score to the

evaluated alternative.
• These data represent an assessment of the alternatives using the decision

criteria, but not the weighting.
• When you multiply each alternative by the assigned weight, you get the
weighted alternatives.
• The total score for each alternative, then, is the sum of its weighted criteria.
Our sales rep analyzation is below.
• Selecting an alternative.
• The sixth step in the decision-making process is choosing the best alternative
or the one that generated the highest total in previous step.
• In our example, the alternative with highest total, 249 is selected which is
Dell Inspiron. Refer above table.
50
• Implementing the alternative

• In step 7 in the decision-making process, you put the decision into action by
conveying it to those affected and getting their commitment to it.
• Importantly we must have the one who is implementing the decision must be
present in our process. This will enable him to suggest during the course of
decision process.
• In our case, the purchase team and IT team had to be present in procuring
Dell Inspiron laptop.
• Evaluating decision effectiveness.

• The last step in the decision-making process involves evaluating the outcome
or result of the decision to see whether the problem was resolved.
• If the evaluation shows that the problem still exists, then the manager needs
to assess what went wrong.
• Was the problem incorrectly defined? Were errors made when evaluating
alternatives? Was the right alternative selected but poorly implemented?
• The answers might lead you to redo an earlier step or might even require
starting the whole process over.
51
TYPES OF DECISIONS
Managers in all kinds of organizations face different types of problems and decisions
as they do their jobs. Depending on the nature of the problem, a manager can use
one of two different types of decisions.
a) Programmed decisions and Non programmed decisions
• Structured problems and programmed decisions

• Some problems are straightforward. The decision maker’s goal is clear, the
problem is familiar, and information about the problem is easily defined and
complete. These are called structured problems.
• Decisions given to structured problems are programmed decision. They are

already available, and the manager don’t have to think for the decision.
• Programmed decisions rely on the following.
• Procedure - is a series of sequential steps a manager uses to respond to

a structured problem
• Rule - is an explicit statement that tells a manager what can or cannot

be done.
• Policy - is a guideline for making a decision.
• Unstructured problems and non programmed decisions

• Unstructured problems are problems that are new or unusual and for which
information is ambiguous or incomplete. Example, building a new
manufacturing unit.
• When problems are unstructured, managers must rely on nonprogrammed

decision making in order to develop unique solutions.
• Nonprogrammed decisions are unique and nonrecurring and involve

custom-made solutions.
52
b) Strategic and Tactical Decisions

• Organizational decisions may also be classified as strategic or tactical.
• Strategic Decisions:
• Basic decisions or strategic decisions are decisions which are of crucial

importance. Strategic decisions focuses on actions concerning
allocation of resources and contribution to the achievement of
organizational objectives.
• Decisions like plant location, product diversification, entering into new

markets, selection of channels of distribution, capital expenditure etc
are examples of basic or strategic decisions.
• Tactical Decisions:
• Routine decisions or tactical decisions are decisions which are routine

and repetitive.
• They are derived out of strategic decisions.
• The various features of a tactical decision are as follows:
• Tactical decision relates to day-to-day operation of the

organization and has to be taken very frequently.
• Tactical decision is mostly a programmed one. Therefore, the

decision can be made within the context of these variables.
• The outcome of tactical decision is of short-term nature and affects

a narrow part of the organization.
• The authority for making tactical decisions can be delegated to

lower level managers.
53
C) Directive, Analytical, Conceptual and Behavioral Decisions

• Directive
• The Manager solves the problem using the information he possesses.
• Manager does not consult with anyone else nor seek information in any
form.
• This approach assumes that the leader has sufficient information to

examine all the relevant options and make an effective decision, but
that is rarely the case.
• Analytical
• When the manager does not possess sufficient information to make an

effective decision, he will need to obtain information or skill from others.
• They may not tell them what the problem is. They simply asks for
information.
• The leader then evaluates the information and makes the decision.
• Conceptual
• The leader explains the situation to the group or individuals whom he

provides with relevant information, and together.
• They generate and evaluate many possible solutions.
• This decisions tends to be have a long-term perspective .
• So they will be more creative and expansive in their approach entailing

a higher level of risk for the long-term benefit of the organization.
54
• Behavioral
• The leader explains the situation to the group or individuals and

provides the relevant information.
• They attempt to reconcile differences and negotiate a solution that

is acceptable to all parties.
• The leader may consult with others before the meeting in order to
prepare his case and generate alternative decisions that are
acceptable to them.
DECISION MAKING UNDER VARIOUS CONDITIONS

• The conditions for making decisions can be divided into three types. Namely
a) Certainty, b) Uncertainty and c) Risk
• Certainty:
• In a situation involving certainty, people are reasonably sure about what will
happen when they make a decision. The information is available and is
considered to be reliable.
• Uncertainty
• In a situation of uncertainty, on the other hand, people have only a meager

database, they do not know whether or not the data are reliable, and they
are very unsure about whether or not the situation may change.
• Risk
• In a situation with risks, factual information may exist, but it may be

incomplete.
55
LINKS
• Management By Objectives
Link : https://www.youtube.com/watch?v=p8LxBQDPvAQ
• Strategy Management
Link: https://nptel.ac.in/courses/110/108/110108047/
• Boston Consulting Group (BCG) Growth-Share Matrix Works
Link: https://www.youtube.com/watch?v=lc36fK38pLA
• Google SWOT Analysis
Link: https://www.learnmarketing.net/SWOT-Google.html
56
Activity Based Learning
• Group Project
• Assume that you are the project manager of a Software
Development Team. You decide to use a Gantt chart to organize all
of the necessary tasks to develop a software product and to
estimate the duration for development.
• A typical project activities are shown in the the Gantt chart.

Assume that the project was started on 1/5/2020. Find the
estimated delivery date.
Activities T1 T2 T3 T4 T5 T6 T7 T8 T9 T10
Duration in 3 4 4 2 3 3 4 4 5 6
Weeks
Following T2, T3 T9 T6 T7 T8 T9 - T10 -
Activity T4,
T5
57
ASSIGNMENTS
• Distinguish Procedures, Rules and Polices using a suitable example.
• Analysis the strengths of MBO. If implemented properly, what benefits

do you feel might result?
• Perform a SWOT Analysis of a start up company of your choice in

India.
58
Part A Q & A
1. What is Planning? (CO2) (K1)
Planning involves selecting missions and objectives and the actions to achieve
them. It requires decision making, that is, choosing future courses of action
from among alternatives.
2.What are the various steps in planning? (CO2) (K1)
Being aware of opportunities; Establishing objectives; Developing premises;

Determining alternative courses; Evaluating alternative courses; Selecting a
course; Formulating derivative plans; and Quantifying plans by budgeting.
3. What are planning premises? (CO2) (K1)
Planning premises are defined as the anticipated environment in which plans

are expected to operate. They include assumptions or forecasts of the future
and known conditions that will effect the operation of plans.
4. Mention the benefits of planning. (CO2) (K1)
Focuses attention on objectives, minimizes uncertainty, facilitates control,

improves coordination, increases organizational effectiveness, encourages
innovation, and improves competitive strength.
5. What are the various types of plans? (CO2) (K1)
Plans are classified into: Purposes or missions; Objectives; Strategies; Policies;

Programs; Procedures; Rules; and Budgets.
6. What is an Objective? (CO2) (K1)
Objectives or goals are the ends toward which all activity is aimed and every
organization strives hard to achieve them. They represent not only the end
point of planning but the end toward which other functions of management are
aimed.
59
Part A Q & A
7. What is a Strategy? (CO2) (K1)
According to Chandler, Strategy is “the determination of the basic long-term

goals and objectives of an enterprise, and the adoption of action and the
allocation of resources necessary to carry out these goals”.
8. What is a Policy? (CO2) (K1)
Policies are guidelines or general limits within which the members of an

enterprise act. They are general statements of understandings which guide
thinking and actions. Policies exist at various levels of the enterprise-corporate,
divisional and departmental.
9. What is a Procedure? (CO2) (K1)
A procedure is a systematic way of handling regular events. It is stated in terms

of steps to be followed in carrying out certain kinds of work. According to Terry,
a procedure is series of related tasks that make up the chronological sequence
and the established way of performing the work to be accomplished.
10. What is a Rule? (CO2) (K1)
A specific statement telling the people what should or what should not be done.
11. What is a Budget? (CO2) (K1)
A statement of expected results expressed either in financial terms or in terms

of labor hours, machine hours, units of product, or such other measurable
terms. They are devices for both planning and control.
12. What are the characteristics of objectives? (CO2) (K1)
1. Objectives are multiple in number
2. Objectives may be either tangible or intangible
3. Objectives have a priority
60
Part A Q & A
4. Objectives are generally arranged in a hierarchy
13. Define Decision making. (CO2) (K1)
Decision making is defined as selection of a course of action from among

alternatives; it is at the core of planning. It is a process of selection from a set
of alterative courses of action one which is thought to fulfill the objective of the
decision problem more satisfactorily than others.
14. What are the steps in decision making? (CO2) (K1)
• Premising; Identifying alternatives; Evaluating the al ternatives in terms of

the goal sought; and Choosing the alternative.
15. What are the various decision-making conditions? (CO2) (K1)
• Decision making under certainty
• Decision making under risk
• Decision making under uncertainty
16. Distinguish between risk and uncertainty in decision making. (CO2)

(K2)
• Risk condition exists when the probabilities of occurrence of various

outcomes of the decision are known.
• Uncertainty condition exists when these probabilities are unknown.
17. What is KRA? (CO2) (K1)
KRA-Key Result Areas are identified on basis of organizational objectives and

planning premises where organizational health can be measured.
18. What are the benefits of MBO . (CO2) (K1)
Improvement of managing, clarification of organization , personnel satisfaction ,

team work, development of effective control, fast decision making.
61
Part A Q & A
19. What are the weakness of MBO? (CO2) (K2)

Failure to teach the philosophy of MBO, Failure to give guidelines, difficulty in
setting goals, Emphasis on short term goals, inflexibility, time consuming
20. What are the steps in policy formulation process? (CO2) (K1)
Definition of policy, Creation of policy alternative, evaluation of policy, choice of

policy, communication of policy, implementation and review.
21. What are the types of policies? (CO2) (K1)
Formulated policies, appealed policy, imposed policy, written policy and implied
policy.
22. What are the types of decisions? (CO2) (K1)
There are two types of decisions they are Programmed decisions and non
programmed decisions.
23. What are the techniques useful while evaluating alternatives? (CO2)
(K1)
Quantitative and Qualitative analysis
Marginal analysis
Cost effectiveness analysis
24. State the classification of planning premises. (CO2) (K1)
Internal and External
Tangible and intangible
Controllable and uncontrollable
25. State few examples of objectives (CO2) (K2)
1. Maximize net profit over a period of time 2.Create a friendly workplace

3. Be service to community
62
Part B Questions
1.How would you describe the types of plans and their merits? (CO2) (K1)
2. Discuss the role of Management By Objectives(MBO) in an organization . (CO2)
(K2)
3. i) Explain the steps involved in strategic management process . (CO2) (K1)
ii) Identify the principles of planning and analyze the types of planning. (CO2)
(K1)
4. i). How would you show your understanding on the various steps in planning?
(CO2) (K1)
ii).Describe the categories the plans with example. (CO2) (K2)
5. i). Discuss the nature and purpose of planning. (CO2) (K1)
ii). interpret the concept of strategic and operational planning . (CO2) (K2)
6. Explain the different types of strategies. (CO2) (K1)
7. i) What do you mean by programmed and non programmed decision Give
examples? (CO2) (K1)
ii) Distinguish programmed and non programmed decision. (CO2) (K2)
8 i) What approach would you use for decision making in different conditions?
(CO2) (K3)
ii) Classify the decisions making techniques . (CO2) (K1)
9 i) Develop a suitable example for each type of decisions . (CO2) (K2)
ii) Interpret the various steps involved in decision making process. (CO2) (K1)
10. Compare strategies and policies, how can strategies be implemented effectively?
(CO2) (K1)
12. i)What are the tools for developing organizational strategies . (CO2) (K1)
ii) Can you list the steps involved in Decision making process . (CO2) (K1)
13 i) Perform a SWOT analysis of Infosys and justify . (CO2) (K3)
63
Supportive online Certification courses
Supportive online Certification courses

• Swayam Course
Course: Principles of Management
Link : https://swayam.gov.in/nd1_noc20mg58/preview
By Prof. Susmita Mukhopadhyay, Prof. S. Srinivasan
IIT Kharagpur
• Coursera Course
Course: Project Management Principles and Practices
Specialization
Link:
https://www.coursera.org/specializations/project-management
Real time Applications in day to day life and to Industry
• Management by Objectives (MBOs) are used to set individual goals to

increase the profit and employee engagement.
• Planning Tools is predominately used for Budgetary Control in

Industries.
64
CONTENT BEYOND THE SYLLABUS
• MODERN PLANNING TOOLS FOR MANAGEMENT

• Affinity diagram:
It Organizes a large number of ideas into their natural relationships..
• Interrelationship diagram
It shows cause-and-effect relationships and helps analyze the natural links

between different aspects of a complex situation.
• Tree diagram
It Breaks down broad categories into finer and finer levels of detail, helping to
move step-by-step thinking from generalities to specifics.
• Matrix diagram
It Shows the relationship between two, three, or four groups of information

and can give information about the relationship, such as its strength, the
roles played by various individuals, or measurements.
65
CONTENT BEYOND THE SYLLABUS
• Matrix data analysis
A complex mathematical technique for analyzing matrices, often replaced by

the similar prioritization matrix. A prioritization matrix is an L-shaped matrix
that uses pair wise comparisons of a list of options to a set of criteria in order
to choose the best option.
• Arrow diagram
• It shows the required order of tasks in a project or process, the best

schedule for the entire project, and potential scheduling and resource
problems and their solutions.
• Process decision program chart
• It Systematically identifies what might go wrong in a plan under development
66
Assessment & Books
Assessment Schedule
Assessment Proposed Date Actual Date
Internal Assessment Test -I 1-8-2020 1-8-2020
Internal Assessment Test –II
Model Examination
Assignments
Quizzes
End Semester Examination
Prescribed Text Books & Reference Books

• TEXTBOOKS
1. Stephen P. Robbins & Mary Coulter, “Managementǁ”, Prentice Hall (India)

Pvt. Ltd., 10th Edition, 2009.
2. JAF Stoner, Freeman R.E and Daniel R Gilbert , “Management”, Pearson

Education, 6th Edition, 2004
• REFERENCES
1. Stephen A. Robbins & David A. Decenzo & Mary Coulter, “Fundamentals of

Management”, Pearson Education, 7th Edition, 2011.
2. Robert Kreitner & Mamata Mohapatra, “Managementǁ”, Biztantra, 2008.
3. Harold Koontz & Heinz Weihrich ,”Essentials of management”, Tata McGraw

Hill,1998.
4. Tripathy PC & Reddy PN, “Principles of Management”, Tata McGraw Hill,

1999
67
Mini Project suggestions
• Mini Project suggestions
• Analysis your skills and develop a SWOT Analysis of your

own .
• Prepare SWOT Analysis of Online Education System .
68
Thank you
Disclaimer:
This document is confidential and intended solely for the educational purpose of RMK Group of
Educational Institutions. If you have received this document through email in error, please notify the
system manager. This document contains proprietary information and is intended only to the
respective group / learning community as intended. If you are not the addressee you should not
disseminate, distribute or copy through e-mail. Please notify the sender immediately by e-mail if you
have received this document by mistake and delete this document from your system. If you are not
the intended recipient you are notified that disclosing, copying, distributing or taking any action in
reliance on the contents of this information is strictly prohibited.
69

Unit 2

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Unit 2

Uploaded by

Copyright:

Available Formats

UNIT II

UNIT II: PLANNING

2.2 Nature Of Planning

2.3 Purpose Of Planning

2.4 Planning Process

2.5 Types of Planning

2.7 Setting Objectives

2.8 Management By Objectives ( MBO)

2.10 Planning Premises

2.11 Strategic Management

2.12 Planning Tools And Techniques

2.12.1 Techniques For Accessing Environment

2.12.2 Techniques For Allocating Resources

2.12.3 Planning Techniques

2.13 Decision Making : Steps And Processes

• It is a systematic activity which determines when, how and who is going to

• Planning is a detailed program regarding future courses of action.

• It is formally defined as follows

• Planning is a mental predisposition to do things in orderly way, to think

• Planning is deciding best alternative among others to perform different

• Koontz and O‘Donell’s Definition

• Planning is deciding in advance what to do, how to do and who is to do it.

• Planning is important due to the following reasons

• To offset uncertainty and change

• To secure economy in operation

• To make control effective

• To increase organizational effectiveness

• Every plan must contribute in some positive way towards the

• Planning has no meaning without being related to goals.

• Planning is the first of the managerial functions.

• It precedes all other management functions.

• Planning is found at all levels of management.

• Top management looks after strategic planning. Middle management is in

• Efficiency, Economy and Accuracy

• Efficiency of plan is measured by its contribution to the objectives as

• Planning also focuses on accurate forecasts.

• The process of planning should be adaptable to changing environmental

• Planning gives direction to all activities to achieve specific objectives of the

• All managers focused on the attainment of objectives

• Planning reduces risks of uncertainty and change

• Future are anticipated and various activities are planned in advance

• Planning helps in coordinated effort

• Manage complexities & competition

• Planning reduces overlapping and wasteful activities

• Problems of when, where, what and why are almost decided

• Planning establishes goals and standards used in controlling

• Planning promotes innovative ideas

• Planning selects the best alternative out of the many available

• Planning imparts a real power of thinking in the managers

• It leads to the birth of innovative and creative ideas

• Planning facilities decision making

• To increase organization effectiveness

• Planning helps manager to measure the organization effectiveness and take

• Planning is an intellectual process which an manager carries out before he does

• It involves the following steps as shown in the figure below.

Steps in Planning Process

• The first step in planning is to identify certain objectives.

❖ Planning has no utility if it is not related to certain objectives.

• Development of planning premises

• The assumptions are the basis of planning. Forecasting is important in

• This requires a collection of data on present trends and future possibilities.

• Identification of alternative course of action

• Evaluation of best alternative