Unit 9-14 Planning and Decision Making

Planning:

According to Koontz & O’Donell, “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 and where we want to go. It
makes possible things to occur which would not otherwise occur”.

Planning function of management involves selecting missions and objectives and the action to
achieve them. It requires decision making that is, choosing from alternative future courses of
action.
Thus, we do planning in order:
1. To decide what has to be done.
2. To decide who and how is it to be done.
3. To coordinate efforts within the organization.
4. To make managers future oriented and to help them in decision making.

Q 1) Features/Characteristics/ Nature of Planning

1. Goal-Oriented Approach:
Planning uses a goal oriented approach because it is directly related with goals of organization.
In the absence of goals or targets, we cannot assume about planning. Within the organization,
all the various activities are done with a view to attain the primary goals of organization. In
fact, in the absence of goals there is no need to plan for any activity. Also, lack of goals will
lead to lack of direction in which plans are supposed to be framed.

2. Forward Looking Process:

It is a salient feature of planning. Planning is forward looking process because it is directly
concerned with forecasting of future events. The purpose of every plan is to determine the
future events with a view to bring certainty in the present activities of the organization. Thus
we can say that planning is forward looking process.

3. Choice Making Activity:

Planning can set to be a choice making activity because planning provides a large number of
alternative courses to an organization to do a various activities in the most appropriate manner.
It is matter of fact that an action may be performed by many ways but there is particular way
to perform an action which is most appropriate to organization. Planning provides these
alternatives to organization to perform its various actions in the most proper way.

4. Primary Function:
This feature of planning refers to primary function because planning is the first task of business
management. All other functions of business management such as organizing, staffing,
directing & controlling are done after completing the planning. In fact, whenever we are going
to do any event or activity at first we make plan & accordingly we perform towards attaining
results.

5. Planning is a Continuous Process:

Planning can be considered as a continuous process because it is not an event which is
concerned with the point of time. It is needed in every walk of life of an organization. In fact,
in the absence of planning any organization shall be unsure about taking even one step properly.
Even when one goal is achieved, there is simultaneous planning towards attaining of other
goals.

6. Pervasive Function:
It is a unique feature of planning. Planning is a pervasive function because it can be universally
applicable at all the levels of management. It can be top level of management, middle level of
management or lower level of management. Planning is the function of all managers.

7. Planning is a Dynamic process:

Planning can be treated as a dynamic process because it is affected if any changes are made in
the internal & external environment of organization. Such that, if the goals of organization
change then will also affect the plans of organization. Similarly in external environment if any
changes are made in the government policy, regarding business then it also affects the plans of
organization. Therefore, it is clear that planning is not a static process.

8. Planning is a mental exercise:

Planning is a mental process which requires higher thinking. That is why it is kept separate from
operational activities by Taylor. In planning, assumptions and predictions regarding future are made by
scanning the environment properly. This activity requires higher level of intelligence. Secondly, in
planning, various alternatives are evaluated and the most suitable is selected which again requires higher
level of intelligence. So, it is right to call planning an intellectual process.

Q.2) Importance of Planning

1. Gives right direction:

Direction means to give proper information, accurate instructions and useful guidance to the
subordinates. It is impossible without planning. It is because planning tells us what to do, how
to do it and when to do it. Therefore, planning helps to give right direction.

2. Planning Facilitates Decision Making:

Decision making means the process of taking decisions. Under it, a variety of alternatives are
discovered and the best alternative is chosen. The planning sets the target for decision making.
It also lays down the criteria for evaluating courses of action. In this way, planning facilitates
decision making.
3. Planning Establishes Standards for Controlling:
Standards are laid down about their work, time and cost, etc. Under controlling, at the time of
completing the work, the actual work done is compared with the standard work and deviations
are found out and if the work has not been done as desired, the persons concerned are held
responsible. For example, a worker is to produce 10 units in a day, but actually he completes 8
units, there is a negative deviation of 2 units. For this, he is held responsible.

4. Planning Reduces Risks of Uncertainty:

Planning is always done for future and future is uncertain. With the help of planning, possible
changes in future are anticipated and various activities are planned in the best possible way. In
this way, the risk of future uncertainties can be minimized or the organization can be prepared
to handle the uncertainties.

5. Increases efficiency:
Planning makes optimum utilization of all available resources. It helps to reduce wastage of
valuable resources and avoids their duplication. It aims to give the highest returns at the lowest
possible cost. It thus increases the overall efficiency.

6. Helps to achieve objectives:

Every organization has certain objectives or targets. It keeps working hard to fulfill these goals.
Planning helps an organization to achieve these aims, but with some ease and promptness.
Planning also helps an organization to avoid doing some random (done by chance) activities.

7. Aids in Organizing:
Organizing refers to bringing together all available resources. Organizing is not possible
without planning. It is so, since, planning tells us the amount of resources required and when
are they needed. It means that planning aids in organizing in an efficient way.

Q.3) Steps in Planning Process

1. Analysis of Internal and external environment

The internal environment of the organization comprises of its strengths and weaknesses,
organization’s policies, resources of various types, and the ability of the organization to
withstand the environmental pressure
The external environment of the organization comprises of total factors in task environment
like political, social, technological, competitors’ plans and actions, government policies, etc.
These factors are outside the control of the organization. Before planning for future course of
action, the company needs to understand its own environment.

2. Determine objectives:
Objectives provide the guidelines (what to do) for the preparation of strategic and procedural
plans. One cannot make plans unless one knows what is to be accomplished. Objectives
constitute the mission of an organization. They set the pattern for future course of action. The
objectives must be clear, specific and informative. Major objectives should be broken into
departmental, sectional and individual objectives. In order to set realistic objectives, planners
must be fully aware of the opportunities and problems that the enterprise is likely to face.

3. Planning Premises:
Here, premises refer to the assumptions about the future. Eg. While planning a company needs
to forecast or anticipate other factors which may arise during the planning period. If a company
is planning for achieving a sales target of 10,000 computers in the next one year, it should take
into account the technological changes that could take place in the market in the future as well.
In this example, the future technological innovations refer to Premises. Other factors could be:
a) Demographic trend (changes in population patterns)
b) Future economic business conditions
c) Forecast about political and legal environment of the country
d) Technological changes and innovations
e) Resource availability
f) Socio cultural forces

4. Identify alternative courses of action:

An organization can consider various options and alternatives. There can be a variety of ways
in which a plan can be formulated.

5. Evaluation of alternatives:
Evaluation means studying the positive and negative aspects of each alternative. For eg. In
order to promote its products in the market, a company may choose from different alternatives
such as advertising through television, newspaper, radio or internet. Then it would compare
between the alternatives

6. Selection of the best alternative:

After weighing the positive and negative aspects of an alternative, the most effective alternative
is chosen.

7. Determining secondary plans:

Secondary plan flows from primary or basic plan. If the primary plan is to increase sales, a
number of secondary plans can be formulated for production, promotion, training of
employees, etc.

8. Securing participation of employees:

The successful execution of a plan depends on the participation of the employees. To ensure
proactive participation of the employees, the managers need to involve employees in the
planning process.

9. Follow up :
Follow-up refers to constant monitoring of the plan and make rectification if required.

Good to know
Planning will keep you on course in achieving your goals and objectives. Abraham Lincoln
reportedly once said, “If I had 60 minutes to cut down a tree, I would spend 40 minutes
sharpening the ax and 20 minutes cutting it down.” Dale Carnegie told a similar story of two
men who were out chopping wood. One man worked hard all day, took no breaks, and only
stopped briefly for lunch. The other chopper took several breaks during the day and a short nap
at lunch. At the end of the day, the woodsman who had taken no breaks was quite disturbed to
see that the other chopper had cut more wood than he had. He said, “I don’t understand. Every
time I looked around, you were sitting down, yet you cut more wood than I did.” His companion
asked, “Did you also notice that while I was sitting down, I was sharpening my ax?”

Thus, Steven Covey calls planning “sharpening the axe.” You have to take time to make time.
Planning is the difference between being REACTIVE and PROACTIVE. When you don’t plan,
you end up responding to the day’s events as they occur.

Q. 4) Limitations/Demerits/Disadvantages of Planning

1. Uncertainty of future events

It is one of the biggest difficulties of planning process. It is matter of fact that planning is related
with forecasting of future events in an advance manner. And we know that future is uncertain
& risk-oriented what will happen tomorrow we can’t say with certainty, but we can predict
about future events through planning. But it is not important the predictions which are made
by us will be in accurate form. Hence, it is clear that there is a fear of uncertainty of future
conditions in planning.
2. Costly Process
Planning involves too much expenditure. Money and effort both are required in planning.
Planning includes collecting information, data forecasting and evaluation of alternatives. It
requires salary and allowances to the experts in the process of providing services. So, planning
has been accepted as costly process by small and medium size organization
3. Time Consuming Process
Planning is the time-consuming process. It delays the business activity to come in action. In
the process of planning following the procedures of planning takes a lot of time which may
create problem to the organization where immediate action has to be made. So in such situation
planning is not suitable.
4. Lack of Accuracy
For planning assumptions have to be developed for future action but future is uncertain and
unpredictable. To make reliable data and accurate premises is necessary, in the lack of reliable
data and accurate premises, there is chance of business loss and failure
5. Difficulty in the Selection of the best Alternative
It is one of the greatest demerits of planning. Infect, planning provides a large number of
alternatives to organization to perform its events or activities in the best form. But it is not
possible for organization to select the best alternative amongst the various alternatives because
organization has no clear idea about the best alternatives, due to large appearance of alternative
courses. So that it is clear, there is difficulty in the selection of the best alternative course in
planning.
6. Limited Flexibility
There is lack of required flexibility in planning. It is matter of fact that in organization every
personnel are bound to do their assigned tasks according to preset plans of organization. Hence,
in case the personnel face the difficulties in course of executing the tasks then they have no
rights to bring changes in the plans of organization on the sport. Thus it is clear; there is lack
of required flexibility in planning.
7. Psychological Barriers
Psychological Barriers are also creating great difficulties in course of making business plans.
In all organizations upper-level managers give the priority to present events in comparison to
future events because present is more certain & beneficial to organization rather than future.
But on the other hand, we know that planning relates to forecasting of future events in advance
manner. Hence, how can it possible that managers will give important to present. On the whole
we can say that there is conflict in manager’s mind about planning due to psychological
differences.
8. Unsuitable in emergency situation
As planning is time consuming, it is not suitable in emergency situation because quick
decisions is desirable in emergency situation buts planning delays the emergency demand in
organization

Q.5) Elements of Planning

1. Objectives
The important task of planning is to determine the objectives of the enterprise. Objectives are
the goals towards which all managerial activities are aimed at. All planning work must spell
out in clear terms the objectives to be realised from the proposed business activities. When
planning action is taken, these objectives are made more concrete and meaningful. For
example, if the organisational objective is profit earning, planning activity will specify how
much profit is to be earned looking into all facilitating and constraining factors.

2. Forecasting
It is the analysis and interpretation of future in relation to the activities and working of an
enterprise. Business forecasting refers to analysing the statistical data and other economic,
political and market information for the purpose of reducing the risks involved in making
business decisions and long range plans. Forecasting provides a logical basis for anticipating
the shape of the future business transactions and their requirements as to man and material.
3. Policies
Planning also requires laying down of policies for the easy realisation of the -objectives of
business. Policies are statements or principles that guide and direct different managers at
various levels in making decisions. Policies provide the necessary basis for executive
operation. They set forth overall boundaries within which the decision-makers are expected to
operate while making decisions. Policies act as guidelines for taking administrative decisions.
In a big enterprise, various policies are formulated for guiding and directing the subordinates
in different areas of management. They may be production policy, sales policy, financial
policy, personnel policy etc. But these different policies are co-ordinated and integrated in such
a way that they ensure easy realisation of the ultimate objectives of business. Policies should
be consistent and must not be changed frequently.

4. Procedures
The manner in which each work has to be done is indicated by the procedures laid down.
Procedures outline a series of tasks for a specified course of action. There may be some
confusion between policies and procedures. Policies provide guidelines to thinking and action,
but procedures are definite and specific steps to thinking and action. For example, the policy
may be the recruitment of personnel from all parts of the country; but procedures may be to
advertise and invite applications, to take interviews and offer appointment to the selected
personnel.
Thus, procedures mean definite steps in a chronological sequence within the area chalked out
by the policies. In other words, procedures are the methods by means of which policies are
enforced. Different procedures are adopted in different areas of business activities. There may
be production procedure, sales procedure, purchase procedure, personnel procedure etc.
Production procedure involves manufacturing and assembling of parts; sales procedure relates
to advertising, offering quotations, securing and execution of orders; purchase procedure
indicates inviting tenders, selecting quotations, placing orders, storing the goods in go-down
and supplying them against requisition to different departments and personnel procedure is the
recruitment, selection and placement of workers to different jobs.

5. Rules
A rule specifies necessary course of action in a particular situation. It acts as a guide and is
essentially in the nature of a decision made by the management authority. This decision
signifies that a definite action must be taken in respect of a specific situation. The rules
prescribe a definite and rigid course of action to be followed in different business activities
without any scope for deviation or discretion.
Any deviation of rule entails penalty. Rule is related to parts of a procedure. Thus, a rule may
be incorporated in respect of purchase procedure that all purchases must be made after inviting
tenders. Similarly, in respect of sales procedure, rule may be enforced that all orders should be
confirmed the very next day.

6. Programmes
Programmes are precise plans of action followed in proper sequence in accordance with the
objectives, policies and procedures. Programmes, thus, lead to a concrete course of inter-related
actions for the accomplishment of a purpose. Thus, a company may have a programme for the
establishment of schools, colleges and hospitals near about its premises along with its
expanding business activities.
Programmes must be closely integrated with the objectives. Programming involves dividing
into steps the activities necessary to achieve the objectives, determining the sequence between
different steps, fixing up performance responsibility for each step, determining the
requirements of resources, time, finance etc. and assigning definite duties to each part.

7. Budgets
Budget means an estimate of men, money, materials and equipment in numerical terms required
for implementation of plans and programmes. Thus, planning and budgeting are inter-linked.
Budget indicates the size of the programme and involves income and outgo, input and output.
It also serves as a very important control device by measuring the performance in relation to
the set goals. There may be several departmental budgets which are again integrated into the
master budget.

8. Projects
A project is a single-use plan which is a part of a general programme. It is part of the job that
needs to be done in connection with the general programme. So a single step in a programme
is set up as a project. Generally, in planning a project, a special task force is also envisaged.
It is a scheme for investing resources which can be analysed and appraised reasonably and
independently. A project involves basically the investment of funds, the benefits from which
can be accrued in future. Examples of such investment may be outlays on land, building,
machinery, research and development, etc. depending upon the situation.
9. Strategies
Strategies are the devices formulated and adopted from the competitive standpoint as well as
from the point of view of the employees, customers, suppliers and government. Strategies thus
may be internal and external. Whether internal or external, the success of the plans demands
that it should be strategy-oriented.
The best strategy of planning from the competitive standpoint is to be fully informed somehow
about the planning ‘secrets’ of the competitors and to prepare its own plan accordingly.
Strategies act as reserve forces to overcome resistances and reactions according to
circumstances. They are applied as and when required.

Q.6 ) Types of Plans

Plans are an integral part of the management process, helping organizations set objectives,
allocate resources, and guide decision-making. There are various types of plans, each with its
own purpose and scope. Let's explore these types of plans in detail:
1. Standing and Single-Use Plans:
• Standing Plans: These are ongoing plans designed to be used repeatedly in similar
situations. Standing plans include policies, procedures, and rules that provide guidance to
employees for routine operations. For example, an organization might have a standing plan
regarding the dress code or a policy for handling customer complaints.
• Single-Use Plans: These plans are created for a specific, one-time purpose or situation.
They are not meant to be repeated. Single-use plans include programs (projects), projects, and
budgets. For instance, a company might create a single-use plan to launch a new product or
develop a marketing campaign for a limited time.

2. Strategic and Operational Plans:

• Strategic Plans: These are long-term plans typically covering three to five years or
more. They set the overall direction and vision for the organization and focus on achieving its
mission and objectives. Strategic plans involve high-level decision-making and often consider
the organization's external environment. Examples include market expansion strategies or
corporate rebranding efforts.
• Operational Plans: Operational plans are shorter-term plans that detail the day-to-day
activities and processes necessary to achieve the strategic objectives. They usually cover a one-
year period and involve specific actions, tasks, and resource allocation. Examples include sales
plans, production schedules, and staffing plans.
3. Short-Range and Long-Range Plans:
• Short-Range Plans: These plans cover a limited time frame, usually up to one year.
Short-range plans are often operational in nature and focus on immediate actions and tasks to
meet short-term goals. An example is a monthly production plan.
• Long-Range Plans: These plans extend beyond one year and often align with the
organization's strategic goals. Long-range plans are forward-thinking and may address issues
like growth, expansion, or major capital investments. An example could be a five-year financial
plan.

4. Specific and Directional Plans:

• Specific Plans: These plans are detailed, clear, and leave little room for interpretation.
They provide specific guidance on what needs to be done, by whom, and when. Specific plans
are crucial for complex or critical tasks where precision is essential.
• Directional Plans: Directional plans are less detailed and provide general guidance
without specifying every aspect of the plan. They offer flexibility and allow individuals or
teams to adapt and make decisions based on the situation. Directional plans are often used in
less structured or rapidly changing environments.

5. Financial and Non-Financial Plans:

• Financial Plans: These plans focus on financial aspects, such as budgeting, revenue
projections, and cost control. Financial plans are essential for managing an organization's
finances effectively, ensuring profitability, and allocating resources efficiently.
• Non-Financial Plans: Non-financial plans encompass a wide range of objectives and
strategies that do not primarily involve monetary considerations. Examples include marketing
plans, human resource development plans, and sustainability initiatives. Non-financial plans
are essential for achieving various organizational goals beyond financial performance.
Additionally, there other types of plans based on the functions they perform.
Plans commit individuals, departments, organizations, and the resources of each to specific
actions for the future. Effectively designed organizational goals fit into a hierarchy so that the
achievement of goals at low levels permits the attainment of high‐level goals. This process is
called a means‐ends chain because low‐level goals lead to accomplishment of high‐level goals.
Three major types of plans can help managers achieve their organization's goals: strategic,
tactical, and operational. Operational plans lead to the achievement of tactical plans, which in
turn lead to the attainment of strategic plans. In addition to these three types of plans, managers
should also develop a contingency plan in case their original plans fail.
1. Strategic Plans
A strategic plan is an outline of steps designed with the goals of the entire organization as a
whole in mind, rather than with the goals of specific divisions or departments. Strategic
planning begins with an organization's mission.
It is the determination of the long-term objectives of an enterprise, the action plan to be adopted
and the resources to be mobilized to achieve these goals. Since it is planning the direction of
the company’s progress, it is done by the top management of an organization. It essentially
focuses on planning for the coming years to take the organization from where it stands today
to where it intends to be. The strategic plan must be forward looking, effective and flexible,
with a focus on accommodating future growth. These plans provide the framework and
direction for lower level planning.
Strategic plans look ahead over the next two, three, five, or even more years to move the
organization from where it currently is to where it wants to be. Requiring multilevel
involvement, these plans demand harmony among all levels of management within the
organization. Top‐level management develops the directional objectives for the entire
organization, while lower levels of management develop compatible objectives and plans to
achieve them. Top management's strategic plan for the entire organization becomes the
framework and sets dimensions for the lower level planning.

2. Tactical plans
A tactical plan is concerned with what the lower level units within each division must do, how
they must do it, and who is in charge at each level. Tactics are the means needed to activate a
strategy and make it work.
Tactical plans describe the tactics that the managers plan to adopt to achieve the objectives set
in the strategic plan. Tactical plans span a short time frame (usually less than 3 years) and are
usually developed by middle level managers. Tactical plans are concerned with shorter time
frames and narrower scopes than are strategic plans. It details specific means or action plans to
implement the strategic plan by units within each division. Tactical plans entail detailing
resource and work allocation among the subunits within each division. Long‐term goals, on the
other hand, can take several years or more to accomplish. Normally, it is the middle manager's
responsibility to take the broad strategic plan and identify specific tactical actions.
3. Operational Plans
The specific results expected from departments, work groups, and individuals are the
operational goals. These goals are precise and measurable. “Process 150 sales applications each
week” or “Publish 20 books this quarter” are examples of operational goals.
An operational plan is one that a manager uses to accomplish his or her job responsibilities.
Supervisors, team leaders, and facilitators develop operational plans to support tactical plans
(see the next section). Operational plans can be a single‐use plan or an ongoing plan.
Single‐use plans apply to activities that do not recur or repeat. A one‐time occurrence, such as
a special sales program, is a single‐use plan because it deals with the who, what, where, how,
and how much of an activity. A budget is also a single‐use plan because it predicts sources and
amounts of income and how much they are used for a specific project.
Continuing or ongoing plans are usually made once and retain their value over a period of years
while undergoing periodic revisions and updates.
The following are examples of ongoing plans:
• A policy provides a broad guideline for managers to follow when dealing with
important areas of decision making. Policies are general statements that explain how a manager
should attempt to handle routine management responsibilities. Typical human resources
policies, for example, address such matters as employee hiring, terminations, performance
appraisals, pay increases, and discipline.
• A procedure is a set of step‐by‐step directions that explains how activities or tasks are
to be carried out. Most organizations have procedures for purchasing supplies and equipment,
for example. This procedure usually begins with a supervisor completing a purchasing
requisition. The requisition is then sent to the next level of management for approval. The
approved requisition is forwarded to the purchasing department. Depending on the amount of
the request, the purchasing department may place an order, or they may need to secure
quotations and/or bids for several vendors before placing the order. By defining the steps to be
taken and the order in which they are to be done, procedures provide a standardized way of
responding to a repetitive problem.
• A rule is an explicit statement that tells an employee what he or she can and cannot do.
Rules are “do” and “don't” statements put into place to promote the safety of employees and
the uniform treatment and behavior of employees. For example, rules about tardiness and
absenteeism permit supervisors to make discipline decisions rapidly and with a high degree of
fairness.
4. Contingency plans
Intelligent and successful management depends upon a constant pursuit of adaptation,
flexibility, and mastery of changing conditions. Strong management requires a “keeping all
options open” approach at all times — that's where contingency planning comes in.
Contingency planning involves identifying alternative courses of action that can be
implemented if and when the original plan proves inadequate because of changing
circumstances.
Keep in mind that events beyond a manager's control may cause even the most carefully
prepared alternative future scenarios to go awry. Unexpected problems and events frequently
occur. When they do, managers may need to change their plans. Anticipating change during
the planning process is best in case things don't go as expected. Management can then develop
alternatives to the existing plan and ready them for use when and if circumstances make these
alternatives appropriate.

Q. 7) Essentials of a good plan

The essentials of a good plan encompass various characteristics that make it valuable and
successful. Here's an explanation of each essential:
1. Simplicity: A good plan should be straightforward and easy to understand. Complexity
can lead to confusion and hinder implementation. Simplicity ensures that everyone involved
can grasp the plan's essence and objectives.
2. Clear Objectives: The plan should have well-defined and measurable objectives. These
objectives provide a clear sense of direction and purpose, making it easier to assess progress
and success.
3. Suitability: The plan should be tailored to the specific needs and circumstances of the
organization. It should align with the organization's mission, vision, and values, as well as
consider the external environment and internal resources.
4. Flexibility: While plans provide structure, they should also allow for adaptability. In a
dynamic and changing world, a good plan should be flexible enough to adjust to unforeseen
circumstances or shifts in priorities.
5. Continuity: Plans should not be one-time endeavors. A good plan considers the long-
term and promotes continuity by outlining steps for ongoing development and improvement.
6. Unity of Purpose: All elements of the plan should work cohesively toward a common
purpose or goal. This ensures that the organization's efforts are aligned and coordinated,
minimizing conflicts and duplications.
7. Comprehensive and Complete: A good plan should cover all relevant aspects of the task
or objective it addresses. It should consider potential challenges, risks, and opportunities and
provide strategies for addressing them.
8. Full Utilization of Resources: Plans should make efficient use of available resources,
including financial, human, and material resources. They should avoid waste and allocate
resources optimally to achieve objectives.
9. Beneficial to All Concerned: A good plan should benefit all stakeholders involved,
including employees, customers, shareholders, and the community. It should not prioritize one
group's interests at the expense of others.
10. Realistic and Acceptable: Plans should be grounded in reality and attainable with the
available resources and capabilities. Unrealistic plans can demoralize employees and lead to
failure. Additionally, plans should be acceptable to those responsible for implementing them,
as their buy-in and commitment are essential for success.

Q. 8) Explain Goal and characteristics of goal

Goal
A goal, in business, describes what a company expects or hopes to accomplish over a specific
period. In other words, where it hopes to be at a future date. People commonly use the term
‘business goal‘ with the same meaning. On a personal level, a goal is an idea of a desirable or
future result that people envision, plan, and commit to achieving. We commonly endeavor to
reach goals over specific periods by setting deadlines.

Let's delve into these characteristics of goals in more detail:

1. Accuracy: Goals should be precise and clearly defined. They should leave no room for
ambiguity, ensuring that everyone understands what needs to be achieved.
2. Acceptability: Goals should be acceptable to the individuals or teams responsible for
achieving them. When people are involved in setting their own goals or have input into the
process, they are more likely to be motivated and committed to achieving them.
3. Evaluation: Goals should be designed with built-in mechanisms for assessment and
measurement. Regular evaluation allows for tracking progress and making necessary
adjustments to stay on course.
4. Constraints: Goals should take into account any limitations or constraints, such as
budgetary constraints, resource limitations, or time constraints. Recognizing these constraints
helps in setting realistic and achievable goals.
5. Result-Oriented: Goals should be focused on outcomes or results rather than just
activities or processes. They provide a clear target to work towards and emphasize the end
objective.
6. Flexibility: While goals should be specific, they should also allow for some flexibility.
Unexpected changes or opportunities may arise, and goals should be adaptable to accommodate
such situations.
7. Understandable: Goals should be communicated clearly and in a way that everyone
involved can understand. This clarity ensures that individuals and teams have a common
understanding of what is expected.
8. Challenging: Goals should be set at a level that motivates and challenges individuals or
teams. Goals that are too easy can lead to complacency, while overly ambitious goals can
demotivate and overwhelm.
9. Priority: Goals should be prioritized to indicate their relative importance. This helps
individuals and teams focus their efforts on the most critical objectives, especially when
resources are limited.
10. Balance: A set of goals should strike a balance between short-term and long-term
objectives, as well as between various aspects of an organization's operations (e.g., financial,
customer service, employee development). This ensures a holistic approach to achieving
success.

Q. 9) Explain Goal setting and elaborate on its importance

Goal setting is a fundamental aspect of effective management and organizational success. The
importance of goal setting extends to various areas and can have a significant impact on an
organization's growth and performance. Let's explore the importance of goal setting:
1. Profit Growth: Goal setting is essential for driving profit growth. By setting clear and
measurable financial goals, organizations can establish targets for revenue, cost reduction, and
profitability. These goals serve as benchmarks for financial performance and guide resource
allocation to achieve sustainable profit growth.
2. Competitive Advantage: Goals help organizations identify and pursue strategies that
can provide a competitive advantage. Setting goals related to innovation, market share, and
customer satisfaction, for example, can position a company as a leader in its industry.
3. Improved Performance: Goal setting motivates employees and teams to improve their
performance. Well-defined goals create a sense of purpose and direction, leading to increased
productivity and a commitment to excellence.
4. Comprehensive Assistance: Goals provide a framework for decision-making and
resource allocation. They help organizations prioritize initiatives and allocate resources
effectively to achieve a wide range of objectives, from market expansion to product
development.
5. Right Direction: Goals set the right direction for an organization. They define the
desired future state and guide strategic planning and tactical actions to reach that state. Without
clear goals, organizations risk drifting without a clear purpose.
6. Management Competence: Effective goal setting is a sign of management competence.
Managers who can set realistic, achievable, and motivating goals demonstrate their ability to
lead and drive results within the organization.
7. Essential Inputs: Goals are essential inputs for the planning process. They inform the
development of strategies, budgets, and action plans. Without clear goals, planning lacks
direction and purpose.
8. Control Element: Goals provide a basis for control and performance measurement. By
comparing actual results to established goals, organizations can identify areas where
performance is falling short and take corrective actions promptly.

Q. 10) Explain steps/criteria in Goal setting

The steps are often referred to as the SMART criteria for goal setting. SMART is an acronym
that helps individuals and organizations create well-defined and achievable goals. Let's break
down each step:
1. Specific: Goals should be clear and specific, leaving no room for ambiguity. They
should answer the questions of "what," "who," "where," and "why." Specific goals provide a
clear understanding of what needs to be accomplished. For example, instead of setting a vague
goal like "increase sales," a specific goal would be "increase sales revenue by 20% in the next
quarter."
2. Measurable: Goals should include quantifiable criteria for success. This allows you to
track progress and determine when the goal has been achieved. Measurable goals answer
questions like "how much" or "how many." For instance, if the goal is to "improve customer
satisfaction," a measurable goal would be "increase customer satisfaction scores by 10 points
in the next six months."
3. Attainable: Goals should be realistic and attainable, given the available resources and
constraints. While it's important for goals to be challenging, they should still be achievable
within the organization's capabilities. Setting overly ambitious goals can lead to frustration and
demotivation. An attainable goal should be based on a reasonable assessment of what can be
done.
4. Relevant: Goals should be relevant and aligned with the organization's mission, vision,
and overall objectives. They should make sense within the context of the organization's long-
term strategy. Setting relevant goals ensures that efforts are focused on what truly matters and
contributes to the organization's success.
5. Timely: Goals should have a clear timeframe or deadline for completion. Setting a time
frame creates a sense of urgency and accountability. It helps prevent procrastination and
ensures that progress is regularly monitored. For example, instead of saying "reduce production
defects," a timely goal would be "reduce production defects by 15% by the end of the year."

Q. 11) Important concepts related to Planning

Following are these concepts in the context of business with explanations and examples:
1. Vision:
• Definition: A vision statement articulates an organization's long-term aspirations and
the future it envisions. It paints a broad picture of what the organization hopes to achieve.
• Example: Disney's vision is "To be one of the world's leading producers and providers
of entertainment and information." This vision statement captures Disney's overarching
ambition to be a global leader in the entertainment industry.
2. Mission:
• Definition: A mission statement defines the core purpose of an organization. It
describes what the organization does, who it serves, and why it exists. It provides a more
specific and practical direction than the vision.
• Example: Tesla's mission is "to accelerate the world's transition to sustainable energy."
This mission statement encapsulates Tesla's commitment to advancing electric vehicle
technology and clean energy solutions.
3. Objectives:
• Definition: Objectives are specific, measurable, and time-bound goals that support an
organization's mission and vision. They serve as stepping stones toward achieving the broader
goals.
• Example: An e-commerce company might set an objective to "increase online sales by
15% within the next fiscal year." This objective aligns with the company's mission and
contributes to its long-term vision of becoming a top e-commerce platform.
4. Programmes:
• Definition: Programs are a set of coordinated activities, projects, or initiatives designed
to achieve specific objectives or goals. They provide a structured approach for implementing
strategies and achieving desired outcomes.
• Example: An automobile manufacturer may launch a program to develop and release a
new line of electric vehicles. This program includes various projects, such as research and
development, manufacturing process improvements, and marketing campaigns, all aimed at
achieving the objective of expanding the company's electric vehicle offerings.
5. Budgets:
• Definition: Budgets are financial plans that allocate resources, such as money, time,
and personnel, to support the execution of programs and achieve organizational objectives.
They provide a detailed breakdown of expected income and expenses.
• Example: A retail chain may create a budget for its marketing program, specifying how
much money will be allocated for advertising, promotions, and online campaigns. This budget
ensures that financial resources are allocated appropriately to achieve marketing objectives.
In summary, these concepts are interconnected and play distinct roles in the strategic
management of a business:
• Vision provides the overarching, long-term direction and aspirations of the
organization.
• Mission defines the fundamental purpose and scope of the organization.
• Objectives are specific, measurable goals that support the mission and vision.
• Programs are structured initiatives that help achieve objectives by coordinating various
activities.
• Budgets allocate financial and other resources to support programs and ensure efficient
implementation.
Together, these concepts help organizations define their purpose, set strategic goals, implement
plans, allocate resources, and measure progress toward their desired future state.
 Decision making

Concept

“A decision is an act of choice wherein an executive forms a conclusion about what must be
done in a give situation. A decision represents a behavior chosen from a number of possible
alternatives.”
– D.E.Mc Farland

“Decision-making is the selection based on some criteria from two or more possible
alternatives.”
– George Terry

Decision-making is an essential aspect of modern management. It is a primary function of

management. A manager's major job is sound/rational decision-making. He takes hundreds of
decisions consciously and subconsciously. Decision-making is the key part of manager's
activities. Decisions are important as they determine both managerial and organizational
actions. A decision may be defined as "a course of action which is consciously chosen from
among a set of alternatives to achieve a desired result." It represents a well-balanced judgement
and a commitment to action.

Q. 12) Importance of Decision-making

1. Business Growth:
Quick and correct decision making results in better utilization of the resources. It helps the
organization to face new problems and challenges. It also helps to achieve its objective and
business growth. However, wrong, slow or no decisions can result in losses and industrial
sickness.

2. Implementation of managerial function:

Without decision making different managerial functions such as planning, organizing,
directing, controlling, staffing can’t be conducted. In other words, when an employee does,
s/he does the work through decision making function. Therefore, we can say that decision is
important element to implement the managerial function.
3. Achieving Objectives:
Rational decisions help the organization to achieve all its objectives quickly. This is because
rational decisions are made after analyzing and evaluating all the alternatives.

4. Increases Efficiency:
Rational decisions help to increase efficiency. Efficiency is the relation between returns and
cost. If the returns are high and the cost is low, then there is efficiency and vice versa. Rational
decisions result in higher returns at low cost.

5. Selecting the best alternatives

Decision making is the process of selecting the best alternatives. It is necessary in every
organization because there are many alternatives. So decision makers evaluate various
advantages and disadvantages of every alternative and select the best alternative.

6. Successful operation of business:

Every individual, departments and organization make the decisions. In this competitive world;
organizations can exist when the correct and appropriate decisions are made. Therefore, correct
decisions help in successful operation of business.

7. Facilitate Innovation
Rational decisions facilitate innovation. This is because it helps to develop new ideas, new
products, new process, etc. This results in innovation. Innovation gives a competitive
advantage to the organization.

Q. 13) Steps in Decision making

1. Identification of a problem
The decision‐making process begins when a manager identifies the real problem. The accurate
definition of the problem affects all the steps that follow; if the problem is inaccurately defined,
every step in the decision‐making process will be based on an incorrect starting point. One way
in which a manager can determine the true problem in a situation is by identifying the problem
separately from its symptoms.

2. Diagnosing the problem

After defining the problem, the next important step is a systematic analysis of the available
data. Sound decisions are based on proper collection, classification and analysis of facts and
figures.

3. Collect and Analyze the relevant information

a. What is relevant and what is not relevant to the decision?
b. What do you need to know before you can make a decision, or that will help you make the
right one?
c. Who knows, who can help, who has the power and influence to make this happen (or to stop
it)?
d. What alternative courses of action may be available to you?
e. What different interpretations of the data may be possible?

4. Discovery of alternative courses of action:

As you collect information, you will probably identify several possible paths of action, or
alternatives. You can also use your imagination and additional information to construct new
alternatives. In this step, you will list all possible and desirable alternatives.

5. Analyzing the alternatives

The most critical path of the decision making process is the evaluation of alternatives. The
wrong choice of alternatives will negate the effects of all efforts put in the preparation of the
process. The criteria for evaluating an alternative may be qualitative or quantitative. Eg. While
deciding which product to manufacture, the quantitative criteria will be return on investment,
market share expected, profit margin expected and the qualitative criteria may be consumer
preference, employee attitude towards the product, demand in the market, etc.

6. Screening of alternatives
This step refers to short listing the most suitable options among a wide range of options. At
this stage, the ideas which do not seem suitable are eliminated. Now, the final selection will be
from the existing list.

7. Selection of best alternatives

After developing various alternatives, the manager has to select the best alternative. It is not an
easy task. Final selection of decision is also affected by the limited resources available at our
disposal.

8. Conversion of decision into action

The selected alternative is communicated to the concerned persons. It involves preparing for
the implementation phase in terms of arranging funds, training the staff, etc.

9. Implementation
After all the preparations for implementation are taken care of, it is time to put the decision
into action. Necessary resources should also be allocated and responsibility for specific tasks
should be assigned to individuals.

10. Follow up:

It is the duty of every manager to see whether the decision is properly implemented or not. It
should be verified whether the decision chosen is helping in achieving the objective for which
it was selected. If not, the manager may have do revaluation of the alternatives.

Q. 14) Types of decisions

1. Programmed and non programmed decisions

Programmed decisions are those which are normally repetitive in nature and are taken as a
routine job and responsibilities. These types of decisions are made by middle level management
in accordance with some policies, rules and procedures. They have short term impact. For
example: – granting a leave to an employee, purchasing office materials etc. Non programmed
decisions are not repetitively taken by top executives. They need to collect data and analyze
them and forecast the strategic plans. Eg. the decision to takeover another company,
introducing a new product in the market, etc.
2. Major and minor decisions
Among different decisions, some decisions are considerably more important than others and
are prioritized. They are called major decisions. For example, replacement of man by machine,
diversification of product, etc. contrary to that, some of the remaining decisions are
considerably less important than others and are not so prioritized. They are minor decisions.
For example, store of raw materials etc.

3. Routine and strategic decisions

Routine decisions are those decisions which are considered as tactical decisions. They are taken
frequently to achieve high degree of efficiency in the organizational activities. For example,
parking facilities, lighting and canteen etc. strategic decisions are those which are related to
lowering the prices of products, changing the product etc. they take more fund and degree of
partials.

4. Organizational and personal decisions

Organizational decision is taken by top executives for official purpose. They affect the
organizational activities directly. Authority is also delegated. Personal decisions are concerned
to an employee. Whenever executives take the decisions personally and for personal reasons
they are known as a personal decisions.

5. Individual and group decisions

When a single employee is involved in decision making it is called individual decision. They
are taken by sole proprietor when the problem is of routine nature. On the other hand, when
the decision is of a group, taken in a large organization where important and strategic decisions
are taken then it is a group decision.

6. Policy and operating decisions:

Policy decisions are taken by top level management to change the rules, procedures,
organizational structure etc and they have a long tern effect. Operational decisions are taken
by low level management which have short term effect and which affect the day to day
operation of the organization.

Q. 15) Techniques of Group decision making

1. Brainstorming : Brainstorming is a process for developing creative solutions to problems.

Alex Faickney Osborn, an advertising manager, popularized the method in 1953 in his book,
Applied Imagination. Ten years later, he proposed that teams could double their creative output
with brainstorming (Osborn, 1963).Brainstorming works by focusing on a problem, and then
deliberately coming up with as many solutions as possible and by pushing the ideas as far as
possible.
There are four basic rules in brainstorming (Osborn, 1963) intended to reduce social inhibitions
among team members, stimulate idea generation, and increase overall creativity:
1. No criticism: Criticism of ideas is withheld during the brainstorming session as the purpose
is generating varied and unusual ideas and extending or adding to these ideas. Criticism is
reserved for the evaluation stage of the process. This allows the members to feel comfortable
in generating unusual ideas.
2. Welcome unusual ideas: Unusual ideas are welcomed as it is normally easier to "tame down"
than to "tame up" as new ways of thinking and looking at the world may provide better
solutions.
3. Quantity Wanted: The greater the number of ideas generated the greater the chance of
producing a radical and effective solution.
4. Combine and improve ideas: Not only are a variety of ideas wanted, but also ways to
combine ideas in order to make them better.

2. Delphi Technique: The Delphi method was originally developed in the early 1950s at the
RAND Corporation by Olaf Helmer and Norman Dalkey. In Delphi decision groups, a series
of questionnaires, surveys, etc. are sent to selected respondents (the Delphi group) through a
facilitator who oversees responses of their panel of experts. The group does not meet face-to-
face. All communication is normally in writing (letters or email). Members of the groups are
selected because they are experts or they have relevant information.The responses are collected
and analyzed to determine conflicting viewpoints on each point. The process continues in order
to work towards synthesis and building consensus/ mutual agreement.

3. Nominal group technique: In a nominal group technique, the team divides itself into smaller
groups and generates ideas. Possible options are noted down in writing and the team members
further discuss these to narrow down the possible choices they would like to accept. Team
members then discuss and vote on the best possible choice. The choice that receives the
maximum votes is accepted as the group decision.
The initial stage of the technique gives each individual a chance to state his opinion on what
the solution should be. He's also allowed to elaborate slightly with a brief accompanying
explanation about why he chose the way he did. Duplicate solutions are then eliminated from
the pool, leaving only original solutions behind. The individuals then rank the remaining
solutions according to numerical preference. All of these preferences are tallied and considered
to render the most accurate results. While there are other variations on achieving this result in
a nominal group technique, that's how it's traditionally done.

4. Multi-voting: It starts with a round of voting where an individual casts his vote for the
shortlisted options. Each individual can cast one vote at a time. The options with the maximum
number of votes are carried to the next round. This process is repeated until a clear winning
option is obtained.
For instance, each team would propose their strategy in front of the other teams. And the other
teams would vote for the one they prefer best. The strategy that receives the maximum number
of votes is considered final.

5. Didactic Interaction: This technique is applicable only in certain situations. But when such
a situation arises, it is an excellent method. The type of problem in such a situation should be
such that it results in a Yes-No solution. For example, to buy or not to buy, to sell or not sell,
etc. Such a situation requires an extensive and exhaustive discussion and investigation since a
wrong decision can have very serious repercussions.

6. Consensus mapping: Consensus mapping is yet another technique of group decision-making.

In this technique, an attempt is made to arrive at a decision by pooling the ideas together
generated by several task sub-groups. It begins with developing ideas. The ideas so generated
by the task sub-groups are developed and narrowed in smaller number of ideas. Then, all ideas
are consolidated into a representative structure called 'strawman map' for the all ideas generated
by the sub-groups. Strawman map is further narrowed down to arrive at a mutually acceptable
solution.

7. Fish Bowling Technique: All the members are seated in a circle form. One person sits in the
centre chair and gives his suggestion to the problem. Members can ask questions to that person.
No two members are allowed to talk to each other than with the person seated in the centre.
After all views are expressed, the one with consensus/ a general agreement is selected.

8. Synectics:
This technique of decision-making was developed by William J.J. Gordon in 1944. He termed
the technique synectics, a Greek derivation which means fitting together different, distinct,
novel and irrelevant ideas. Its purpose is to increase the creative output of individuals and
groups. The group leader encourages members to bring out creative solutions after analyzing
the problem. This technique differs from brainstorming in many aspects. It is much more
adaptable to complex decisional problems. It also helps in making basic or risk-uncertainty
decisions that require creative solutions.