PLANNING

DEFINITION
“Planning is deciding in advance what to do, how to do it
and who to do it. It is the selection among alternatives
of future course of action for the enterprise as a whole
and each department within it. Plans involves
selecting enterprise objectives and determining ways
of achieving them.”
KOONTZ O’ DONNELL
NATURE OF PLANNING
1. Planning is a primary function
2. Planning is a dynamic process
3. Planning – Based on objectives and policies
4. A selective process
5. An intellectual process
6. All pervasiveness
7. Planning is directed towards efficiency
8. Focus with future activities
9. Flexibility
10. Based on facts
PLANNING PROCESS
1. IDENTIFICATION OF OPPORTUNITIES

2. ESTABLISHMENT OF OBJECTIVES

3. DEVELOPING PLANNING PREMISES

4. IDENTIFICATION OF ALTERNATIVES

5. EVALUATION OF ALTERNATIVES

6. SELECTING AN ALTERNATIVE

7. FORMULATING DERIVATIVE PLANS

8. ESTABLISHING SEQUENCE OF ACTIVITIES

TYPES OF PLANS
1. OPERATIONAL PLAN
2. TACTICAL PLAN
3. STRATEGIC PLAN
4. CONTINGENCY PLAN
 1. OPERATIONAL PLAN
STANDING PLANS SINGLE USE PLANS

Mission Programmes
Objectives Budgets
Strategies Schedules
Policies Methods
Procedures Projects
Rules
MISSION
Ford Motor vision and mission
Vision:
 To become the world's leading consumer company
for automotive products and services.
Mission:
 We are a global family with a proud heritage
passionately committed to providing personal
mobility for people around the world.
Vision & Mission of Titan
Vision:
 To be a world-class, innovative and progressive
organization and to build India’s most desirable
brands.
Mission:
 To create wealth for all our stakeholders by building
highly successful businesses based on a customer-
centric approach, and to contribute to the community.
OBJECTIVES
 Aims, purposes, goals that an organisation wants to
achieve over varying periods of time.

 CHARACTERISTICS OF OBJECTIVES:
1. Objectives have an hierarchy
2. Objectives form a network
3. Multiplicity of objectives
4. Time span
5. Tangible or intangible
6. Must have social sanction
S-M-A-R-T OBJECTIVES
 SPECIFIC
 MEASURABLE
 ACHIEVABLE
 RELEVANT
 TIME BOUND
MANAGEMENT BY OBJECTIVES(MBO)
 MBO is a process whereby the superiors and the
subordinate managers of an enterprise jointly identify
its common goal.
Process of MBO
STRATEGY
 Strategy is a long term course of action to accomplish
the objectives of the organisation.
STRATEGIC MANAGEMENT PROCESS
1. MISSION & GOALS

2. INTERNAL ANALYSIS 3. EXTERNAL ANALYSIS

(STRENGTHS & WEAKNESSES) (OPPORTUNITIES & THREATS)

4. STRATEGIC CHOICE
(SWOT Analysis)

Functional level

Business level

Corporate level

Global level

5. STRATEGIC IMPLEMENTATION

6. FEEDBACK
Porter’s Five Forces Model

2 | 16
 The BCG “Portfolio” Matrix
Stars Question Marks

High
? ? ?
?
Anticipated
Growth
Rate Cash Cows Dogs

Low

Market Share
High Low
Portfolio Analysis
BCG Matrix
BCG MATRIX WITH CASH FLOW
TYPES OF STRATEGY
 FUNCTIONAL LEVEL STRATEGY
-Production,Marketing,Human Resource,Finance,R&D
 BUSINESS LEVEL STRATEGY
-Cost Leadership Strategy
- Product Differentiation Strategy
- Focus Strategy
 CORPORATE LEVEL STRATEGY
- Stability Strategy
-Growth Strategy
-Retrenchment Strategy
 GLOBAL LEVEL STRATEGY
- Multi domestic Strategy
- Transnational Strategy
- Global Strategy
-International Strategy
POLICY
 Policy is a broad statement formulated to provide
guidance in decision-making.
POLICY FORMULATION PROCESS
1. Definition of Policy area
2. Creation of policy alternatives
3. Evaluation of Policy alternatives
4. Choice of policy
5. Communication of policy
6. Implementation of policy
7. Review of policy
Types of Policy
 Formulated policy
 Appealed policy
 Imposed policy
 Written policy
 Implied policy
PLANNING PREMISES
 Assumptions
 Environment
 Forecasts

 Classification of planning premises:

 Internal and External
 Tangible and Intangible
 Controllable and uncontrollable
CASE STUDY
 TRAIN TRACK AND CHILDREN
WHAT TO DECIDE
 A group of children were playing near 2 railway tracks,
one still in use while the other disused. Only one child
played on the disused track, the rest on the operation track
WHAT TO DECIDE
 The train came and you were just beside the
track interchange.
 It was not possible to stop the train but you
could make the train change its course to the
disused track and save most of the kids
WHAT TO DECIDE
However, that would also mean the
lone child playing in the disused track
would be sacrificed. Or would you
rather let the train go way.
Let us take a pause to think what kind
of decision we would make
WHAT TO DECIDE
Analyze the
situation
Thick and reflect
Decide
Now go ahead
WHAT TO DECIDE
Most people might choose to divert the
course of the train, and sacrifice only one
child.
To save most of the children at the expense
of only one child was rational decision
most people would make morally and
emotionally
WHAT TO DECIDE
 But, have you ever thought that the child
choosing to play on the disused track had
in fact made the right decision to play at a
safe place.
 Nevertheless, he had to be sacrificed
because of his ignorant friends who
choose to play in the used track which is
dangerous.
WHAT TO DECIDE
 This kind of dilemma happens around us
everyday. In the office community, in politics
and especially in a democratic society the
minority is often sacrificed for the interest of
the majority. No matter how foolish or ignorant
the majority are and how farsighted and
knowledgeable the minority are.
WHAT TO DECIDE
The child who choose not to play
with the rest on the operational
track was side lined. And in the
case he was sacrificed, no one
would shed a tear for him
WHAT TO DECIDE
 To make the proper decision is not try to change
the course of the train because the kids playing
on the operational track should have known
very well that track was still in use and that they
should have run away if they heard train sirens.
WHAT TO DECIDE
If the train was diverted, that lone
child would definitely die because he
never thought the train could make
over to that track.
Notably that track was not in use
probably because it was not safe.
WHAT TO DECIDE
 If the train was diverted to the unused
track, we would put the lives of all
passengers on board at stake. And in your
attempt to save a few kids by sacrificing
one child, you might end up sacrificing
hundreds of people to save these few kids
WHAT TO DECIDE
 While we are all aware that life is full of
tough decisions that need to be made, we
may not realize that hasty decisions may
not always be the right one.
 Remember that What’s right is not always
popular and what’s popular isn’t always
right.
DECISION MAKING
DECISION
MAKING
ENVIRONMENT

DECISION
DECISION - DECISION
MAKING
TYPES MAKING
APPROACHES
PROCESS

DECISION
MAKING
STYLES
 DECISION MAKING
PROCESS

1. Identification of problem
2. Diagnosis and analysis of
the problem
3. Search for alternatives
4. Evaluation of alternatives
5. Selection of the best
alternative
6. Implementation and
follow-up
 DECISION – TYPES
1. Personal & Organizational
Decisions
2. Casual & Routine Decisions
3. Strategic & Tactical
Decisions
4. Policy & Operative Decisions
5. Programmed & Non-
programmed decisions
6. Individual & Collective
Decisions
7. Financial & Non-financial
decisions
DECISION MAKING
APPROACHES
1. Rationality
2. Bounded
Rationality
3. Intuition
 DECISION MAKING
STYLES
1. Directive
2. Analytic
3. Conceptual
4. Behavioural
 DECISION MAKING
ENVIRONMENT
1. Certain
2. Risk
3. Uncertain
4. Ambiguity
 Certainty Risk Uncertainty Ambiguity

Problem Known Known Known Not Known

Alternatives Known Known Not Known Not Known

Outcomes Known Not Known Not Known Not Known

Decision Making in Different

Situations
 Decision-Making
Conditions
• Certainty
• Risk
• Uncertainty
Types of Decisions •Ambiguity
• Programmed &
Non-programmed Decision-Making
Approach
•Personal & Decision-Making • Rationality
Organizational • Bounded
Process Rationality
•Individual & • Intuition
Collective

Decision Maker Style

• Directive
• Analytic
• Conceptual
• Behavioral