Unit II

Planning

PLANNING How To Best Meet Your Mission

We must plan for the future, because people who stay in the present will remain in the past.
Abraham Lincoln

What is Planning?
Planning is a search problem that requires to find an efficient sequence of actions that transform a system from a given starting state to the goal state Planning is the starting point of the management process Predetermines what the business proposes to accomplish and how it intends realizing its goals

involves shared goals for the organization. • Formal: written.What Is Planning? – A primary managerial activity that involves: • Defining the organization’s goals • Establishing an overall strategy for achieving those goals • Developing plans for organizational work activities. and long-term focus. short-term focus. specific to an organizational unit. – Types of planning • Informal: not written down. specific. .

organising systematically the efforts needed to carry out these decisions and measuring the results of these decisions against the expectations through an organised systematic feedback .Koontz and O’Donnel • Planning is continuous process of making present entrepreneurial decisions (risk taking) systematically and with best possible knowledge of their futurity. the base of decisions on purpose. facts and considered estimates .Definition of Planning • Planning is an intellectual process.Peter Drucker . the conscious determination of course of action.

– The external environment can reduce the impact of planning on performance. • Positive financial results.Planning and Performance • The Relationship Between Planning And Performance – Formal planning is associated with: • Higher profits and returns on assets. . – The quality of planning and implementation affects performance more than the extent of planning. – Formal planning must be used for several years before planning begins to affect performance.

or shift ( to deal with daily work). – For supervisors the planning period is usually a week. 7 .The Nature of Planning • Planning: looking ahead to chart the best courses of future action. – Top management makes strategic plans. and policies to determine strategies. • Strategic planning: Long range planning to set organizational goals. day. tactics. objectives. and programs for achieving them. – Middle Management makes annual plans (to implement the above).

Purpose of Planning Set the standards to facilitate control Provide direction Managers engage in planning to: Minimize waste and redundancy Reduce the impact of change .

the end result of a plan. . • Goal – A specific result to be achieved. consisting of at least one goal and a predefined course of action for achieving that goal.Elements Of Planning • Plan – A method for doing or making something. • Objectives – Specific results toward which effort is directed.

Elements Of Planning (cont’d) • Planning – The process of setting goals and courses of action. – Assessing today the consequences of various future courses of action. • What Planning Entails – Choosing goals and courses of action and deciding now what to do in the future to achieve those goals. . and forecasting future outcomes. developing rules and procedures.

What Planning Accomplishes • Allows decisions to be made ahead of time. • Permits anticipation of consequences. avoiding piecemeal decision making. • Provides a unifying framework. . • Helps identify threats and opportunities and reduces risks. • Facilitates managerial control through the setting of standards for monitoring and measuring performance. • Provides direction and a sense of purpose.

Hierarchy of Goals .

aided by small headquarters advisory groups. • Large firms: – Traditional: • A central corporate planning group works with top management and each division to challenge. – Current: • Planning is decentralized and includes the firms’ product and divisional managers.Who Does the Planning? • Small businesses: – Entrepreneurs do most of the planning. . and refine the company’s plan.

• establishing key priorities. formally written. and publicized statement that guides the organization by • defining the organization for key stakeholders. • outlining how the vision will be accomplished.Organizational Mission – A clear. . • empowering organization members. • creating a philosophical anchor for the organization. • stating a common goal and foster togetherness. • creating an inspiring vision of the organization. • generating enthusiasm and a “can do” attitude.

place. • Is comprehensive. • Is flexible (can be adapted to a change in the situation). supplies.Qualities of a Good Plan • Provides a workable solution and meets the stated objectives. • Minimizes the degree of risks. . • Is specific as to time. etc. it raises all relevant questions and answers them. tools.

Types of Planning – Strategic planning: determining how to pursue long-term goals with available resources. . – Operational planning: determining how to accomplish specific tasks with available resources. – Intermediate planning: determining subunits’ contribution with allocated resources.

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concerning particularly why is it in existence .Missions or Purposes • Essential purpose of the organization. the nature of the businesses it is in and the customers it seeks to serve and satisfy • MCDONALD’S MISSION – “TO OFFER THE FAST FOOD PREPARED IN THE SAME QUALITY WORLD WIDE WITHIN REASONABLE PERIOD” • • RANBAXY LABORATORIES “ TO BECOME RESEARCH BASED INTERNATIONAL PHARMACEUTICAL COMPANY” .

Strategies • Determination of basic long term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals .

. take responsibility.Policies • They are general statements or understanding that guide or channel thinking in decision making They define an area within which a decision is to be made and ensure that the decision will be consistent with and contribute to an objective • Recruitment Policy of TCS is an equal-opportunity employer • Personnel policy of ABB India – states that each employee would understand his role. and develop him according to the changing needs of job profile and organization.

Procedures It is chronological sequence of steps to be undertaken to achieve an objective. They are guides to action that specify in details the manner in which activities are to be performed .

restaurants .Rules Spell out specific action or non action leaving no discretion They regulate the day to day conduct of affairs by providing detailed instructions Eg – No smoking zone in aircrafts or offices.

Budgets A statement of expected results of given future period expressed in numerical terms It indicates the financial resources necessary for supporting the various activities included in the program .

.Goals • Goals denote what an organization hopes to accomplish in future period of time. A broad category of financial and non financial issues are addressed by goals that firm sets for itself • Objectives are the ends that state specifically how goals shall be achieved.

innovativeness . high profit as a barometer of efficiency. high involved employees distinctively charged with pride.Goals and objectives-setting at Canara Bank • “ OUR MISSION IS TO BE THE MOST COMPETITIVE AND PROGRESSIVE INSTITUTION IN OUR INDUSTRY” The bank stated goals were “ growth. .

Goals and objectives-setting at Canara Bank • Growth has been achieved in terms of customers ( -million) . . reserves (Rs ) Average business per employee ( ) deposit per branch • Innovations were reflected in terms of new schemes like mutual funds and setting up financial services as merchant banking and portfolio management • A high profit of … more than the industry leader • Employees involvement has been sought through delegation of authority and devolution of power at grassroot level through change in administrative structure.