PLANNING

FAILING TO PLAN
IS
PLANNING TO FAIL

It bridges the gap from

where we are and
where we want to go.

Not only determination of the future courses

of action to achieve the desired results
but also searching for possibilities of future
problems that might appear.
TYPES OF PLANS
 1. PURPOSES OR PLANS

 Identifies the basic

function or task of an
enterprise.
 It differs from
organization to
organization
.
 2. OBJECTIVES/GOALS
• Ends towards which the activity is aimed.
 3. STRATEGIES
• Determination of the basic long- term
basic objectives
• Adoption of courses of action and
allocation of resources necessary to
achieve them
 4. POLICIES
General statements or
understandings.
Helps in decision making.
Helps decide issues before
they become problems
 5. PROCEDURES
• Establish a required method of
handling future activities.
• Follows a chronological sequence of
required action.
• Action -oriented
6. RULES • Includes the
DO’S and
DONOT’S
allowing no
discretion.
• Simplest type of
plan
 7. PROGRAMMES
• Complex of goals, policies, procedures,
rules ,task assignments etc.
 8.
Expected results in numerical
terms
A control device although making
it is planning
 STEPS IN PLANNING
• Being aware of opportunities – in both external and
internal environment and present standing.

• Establishing Objectives – what the organization wants in

long as well as short term. Should be realistic.

• Developing Premises – Assumptions/ Forecasts about

the future environment. Understanding of utilising
planning premises such as forecast, basic policies, and
existing plans.

• Determining Alternative courses – backup plans if the

actual plans are not going as desired. Pros and Cons of
all the alternatives.
 STEPS (cont.)
• Evaluating Alternative Courses – in light of premises and goals.
Choosing only the most fruitful or desirable alternatives from
the generally large number of alternatives.

• Selecting a Course – the real point of decision making where

the most desirable plan is chosen.

• Formulating Derivative Plans –

• Numberizing Plans by Budgeting – representing plans through

numbers so that they can be measured , compared and
corrected.
 STEPS IN PLANNING
1.Being Aware of Opportunity 5.Evaluating Alternatives

2. Setting Goals 6. Selecting a Course

7. Formulating Supportive
3. Developing Premises plans

4. Identifying Alternatives 8. Making Budgets

 PLANNING AND CONTROL
• These are two different functions of management
but are closely related.
• Plans are meant to be implemented thus it
generates the need for control. Controlling also
helps to reveal the defects (if any) in the plans as
per the actual situation which can be used to
reframe the plans.
• Control is of no use without plans or standards
with which comparison of actual results has to be
made. Planning provides the basis of controlling.

Planning without control is MEANINGLESS

and Control without planning is BLIND.

EXAMPLE
 NEW PLANS

No
Controlling :
Implementation undesirable
Planning Comparing plans
Of plans deviations
With results
from plans

Corrective action
• Important ends toward which
organizational and individual
activities are directed.
• They need to be supported by
a hierarchy of sub-objectives
duly networked through the
organization to avoid discord
and wasted effort.
 HIERARCHY OF OBJECTIVES
1.SOCIO-ECO PURPOSE
M
TO
BO
T Board of
2.MISSION
UP directors
CH

ROA
P
AP
ROA

CH Top – level
APP N
TOP
DOW

3.OVERALL OBJECTIVES managers

4.SPECIFIC OVERALL OBJECTIVES

( K.R.A s’ )

5. DIVISION OBJECTIVES
Middle –level
managers

6. DEPARTMENT and UNIT OBJECTIVES

Lower-Level
7, INDIVIDUAL OBJECTIVES
Performance
managers
Personal development objectives

Organization
Hierarchy of Objectives
Hierarchy
KEY RESULT AREAS – PETER DRUCKER
K.R.A’ s refer to general areas of outcomes or outputs for which
the department's role is responsible.

Key result areas (K.R.A ‘s) capture about 80% of a work role.
The remainder of the role is usually devoted to areas of shared
responsibility. Having K.R.A enables to-

a) Have clearly defined and achievable goals.

b) Measure progress in terms of target.
c) Promote self – management.
d) Identify areas for development.
S.M.A.R.T
It should be S (Specific), M (Manageable) , A (Achievable), R
(Relevant ) and T ( Time frame) = S.M.A.R.T
For e.g. K.R.A. for HR department is RECRUITMENT /
SELECTION whereas the K.R.A. for MARKETING department is
DISTRIBUTION and for SALES department K.R.A. is SALES
COVERAGE
 HOW K.R.A. works ?
2. Period specific target is set.
This target is the K.R.A of the C.E.O.

1. Board of Directors decide 3. The target is divided till the bottom

the objectives. rung. K.R.A. of each is linked

Example -Company Name: XYZ.

Business of the Company: sells PCs.
Suppose the objective decided by the Board is to make a profit of $500 crores in 3
years.
The KRA of CEO is to attain $500 crores profit in 3 years.
The CEO decides to attain this by making $400 crores by selling PCs, $50 Crores by
Investing in Stocks and 50 Crores by improving productive cycle.
Now the KRA of Cheif Marketing Officer will be to sell PCs that will give the company
$400 crore profit in 3 years. He will then set the KRAs for his subordinate in such a
way that this target is achieved.
The Chief Operating Officer has KRA of improving the productivity cycle and
producing PCs by which $400 crores can be achieved.
The Chief Finance Officer will as KRA have to look after investing in Stock and
providing finance for purchase of raw materials, machinaries and others so that both
Operation and Marketing can achieve their KRAs. Similarly the Chief People Officer (
H.R. ) as his K.R.A. will have to provide manpower and maintain harmonious
industrial relationship.
 K.R.A ‘s by PETER DRUCKER
o Market standing
o Innovation
o Productivity
o Physical and financial
resources
o Profitability
o Manager performance and Development
o Worker Performance and Attitude
o Public Responsibility
o Service { Recently
added }
o Quality