Planning : Planning involves defining the organizations goals, establishing strategies for achieving those goals and developing

plans to integrate and coordinate work activities.

Purpose of planning : Planning provides direction to managers and non managers alike. Planning reduces uncertainty. Allows Manager to anticipate and consider impact of change so as to develop a well defined response. Planning minimizes waste and redundancy , allows work activities coordination and corrects inefficiency. `Planning establishes goals and it sets standards for controlling.

 Why formal planning is must:

Without Planning Departments and individuals have been seen working at cross purposes .Resulting in failure of an organization in efficient goal achieving. There would be no goals which is necessary to measure work effort.

Planning and performance:

If we associate formal planning with financial results we achieve higher return on assets i.e higher profits. Doing a good job with planning and its implementation will maximize performance.

 If former (previous) planning did not lead to higer performance it may be due to a bad environment. Relationships influence planning time frame.

Types of goal:
Financial goals and Strategic Goals:
Financial goals are related to financial performance of the organization. All other goals outside the horizon of financial goals include strategic goals,strategic goals cover all other areas of an org,s performance. .

Stated goals:
Official statements of what an organization says,declare,wants and wishes from it stake holders.

Real goals: org actually pursue

Real goals are those which are observe and are followed by the higher athorities regularly.Like the two angels on ur shoulders observe your every deed and are followed in a way your shadow follows you.

S/No

Financial Objectives

Strategic Objectives

Faster revenue growth

A bigger market share

Faster earnings growth

A higher, more secure industry rank

Higher dividends

Higher product quality

Wider profit margins

Lower costs relative to key competitors

Higher returns on invested capital

Broader or more attractive product line

Stronger bond and credit ratings

A stronger reputation with customers

Bigger cash flows

Superior customer service

Types of Plans

Breadth

Time Frame

specificitly

Frequency of Use

Strategic Operational

Long term Short term

Directional Specific

Single Use Standing

Strategic Plans. Apply to the entire organization. Establish the organization's overall goals, Seek to position the organization in terms of its environment. Cover a longer time frame and broader view of the organization. Operational Plans. specify the details of how the overall goals are to be achieved. Define ways to achieve the sub goals of strategic plans. Tend to cover short time periods ie monthly, weekly, and day-to-day,

Long-Term Plans . Plans with a time frame beyond three years. 7 years ,declined considerably because of environmental uncertainty.. Short-Term Plans. Covering one year or less. Time classifications are fairly common. An organization can designate any timeframe it want to use for planning purposes. Specific Plans . Are clearly defined and leave no room for interpretation. Have specifically stated objectives. There's no ambiguity and no misunderstandings. The drawbacks of specific plans are that they require clarity and a sense of predictability that often

Directional Plan. Directional plans are flexible plans that set out guidelines. Provide focus but do not lock managers into specific goals or courses of action. The flexibility inherent in directional plans must be weighed against the loss of clarity provided by specific plans. Single use Plan Is one time plan specifically designed to meet the needs of a unique situation Standing plan Are ongoing plans that provide guidance for activities performed repeatedly. Incl policie,rules and procedures

Directional Plans

Specific Plans

Setting Goals and Developing Plans

Approaches to settingGoals.
Traditional Process. Set by top mgt than flow down through org. Become sub goals for each org area. Traditional perspective assumes that top management know whats best. Goals passed down to each succeeding level guide individual employee as they work to achieve those assigned goals.

Traditional Objective Setting

Management by objectives (MBO). In this management system specific performance goals are jointly determined by employees and their managers. progress toward accomplishing the goals is periodically reviewed, and rewards are allocated on the basis of this progress. Goals are not only for controls, MBO uses to motivate employees as well. MBO consists of four elements Goal specificity Participative decision making Explicit time period, and Performance feedback. I Focus on the accomplishment of participatively set objectives for better motivation behind individuals' work efforts.

Steps in MBO.
1. 2. Formulation of organization's overall objectives and strategies . Allocation of major objectives among divisional and departmental units.

3.

Setting up of specific objectives , collaboratively by unit managers for their units .

Specific objectives are collaboratively set with all department members.

4.

5.

Action plans are defined , specified and agreed upon by managers and employees (how objectives are to be achieved) .
The action plans are implemented. Progress toward objectives periodically reviewed , and feedback provided. Performance-based rewards (to reinforce successful achievement of objectives)

6. 7.

8.

Steps in Goal Setting@Developing Plans

Steps in Goal Setting. Review the org,s mission or purpose. Evaluate available resources. Determine the goals individually or with input from others. Write down the goals and communicate them to all who need to know. Review results , whether goals are being met or not.

Developing Plans
Organizational level : Relationship between a managers level in the organization and the type of planning done. Environment uncertainty : When certainity is high,plan should be specific,but flexible. Commitment Concept: related to the time frame of plans.

Approaches to planning
Traditional. Involve more org , s members in the process.

Traditional. Planning is done entirely by top level managers. Assisted by formal planning departments (a group of planning specialist). Developed plans flow down through org. Plans are tailored to meet particular needs of each level. Make thorough ,systematic and coordinated planning.

Involvement of more organizational members in the process. Plan are not handed down from one level to the next. Develop by organization members at various levels and work units to meet their specific needs. work teams set their own daily schedules track those ,if falls behind, team members develop recovery plans to get back on schedule. on active involvement in planning members see plans more than just written down. Members actually see that plans are used in directing and coordinating work.