CHAPTER 2: PLANS

FOR AREAS OF
RESPONSIBILITY
IN THIS CHAPTER, WE WILL LEARNS

 DESIGN PLAN WHICH PROMOTE GOALS AND OBJECTIVES

FOR OWN AREA OF RESPONSIBIITY

 WRITE SMART OBJECTIVE TO ALIGN PEOPLE AND OTHER

RESOURCES IN AN EFFECTIVE AND EFFICIENT WAY

 IMPLEMENT APPROPRIATE SYSTEMS TO ACHIEVE

OBJECTIVES IN THE MOST EFFICIENT WAY, ON TIME, TO
BUDGET AND MEETING ORGANIZATIONAL STANDARDS
OF QUALITY

 CARRY OUT WORK ACTIVITIES MEETING THE

OPERATIONAL PLAN THROUGH EFFECTIVE MONITORING
AND CONTROL
 1.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
 1. Planning

 1.1. Hierarchy of objective

 1.2. The business plan
 1.3. Control and planning
 1.4.Purpose of planning and
organizing

 1.5. Measure of success

 Hierarchy of objective

Mission

Goals

objectives

Strategy

Tactics

Operational
Plan
1.3.The business plan

 What to to in future?
 How to do it?
 When to do it?
 Who should do it?
 1.3.The business plan

Planning helps an individual or the organization to clearly

define its purposes and activities:
→ what they want to achieve
→ how, when and who to do it
→ to implement, monitor what has been achieved and
compare with the original plan
→ action plan to correct any deviation
 Level of Business plan

level Activity

Strategic Deciding what business the organization should be

and what its overall objectives should be

Tactical Deciding what it should go about achieving its

over objectives, what products it should produce?
How it will organize work and so on

operational Decide what need to be done from day to day, task

to task
1.3. Planning and control cycle
 Control necessary
Control is necessary because unexpected factors may arise
and affect the system, so making actual results deviate from
the expected results. Example:
The entry of a new competitor
The unexpected rise in the labour cost
A decline in quality standard
Loss of major customer
The new legislation
The appearance of new technology
1.4. Purpose of planning and organizing
 Planning allows manager to identify:
 The objectives for which they responsibility
 What actions will serve towards achieving those objectives
 How far they are being successful in achieving those objectives

 Planning and organizing are important because:

 Uncertainty
 The need for coordination:
 Sub-unit know what and when they need to achieve
 Work “flow” effectively
 Resource required are available at right time, right place
 Required work being done by someone
 All of the abouve are achieve with suitable requirement quality
 1.5. Measure of success

 Efficiency is the relationship between inputs used and

outputs achieved. The fewer the inputs used to obtain a
given output, the greater the efficiency. The efficiency
can be expressed as input/output

 Effectiveness is the measure of how far an organization

(and it managers) achieve their output requirements, as
defined by performance objectives and targets.
ACTIVITY 1. PAGE 41
 2. Management by objective

 Management by Objectives (MBO) was first outlined

by Peter Drucker in 1954 in his book 'The Practice of
Management'. In the 90s, Peter Drucker himself
decreased the significance of this organization
management method, when he said: "It's just another
tool. It is not the great cure for management
inefficiency... Management by Objectives works if you
know the objectives, 90% of the time you don't."
2.1.What is MBO?
 Management by objectives (MBO) is a systematic and
organized approach that allows management to focus on
achievable goals and to attain the best possible results
from available resources. It aims to increase organizational
performance by aligning goals and subordinate objectives
throughout the organization. Ideally, employees get strong
input to identify their objectives, time lines for completion,
etc. MBO includes ongoing tracking and feedback in the
process to reach objectives.
 Core Concepts of MBO

Instead of just a few top-managers, all managers

should:

 participate in the strategic planning process, in

order to improve the implementability of the plan,
and

 implement a range of performance systems,

designed to help the organization stay on the right
track.
 Managerial Focus

 MBO managers focus on the result, not the activity.

They delegate tasks by "negotiating a contract of
goals" with their subordinates without dictating a
detailed roadmap for implementation. Management
by Objectives (MBO) is about setting yourself
objectives and then breaking these down into more
specific goals or key results.
 Main Principle of MBO

 The principle behind Management by Objectives

(MBO) is to make sure that everybody within the
organization has a clear understanding of the aims,
or objectives, of that organization, as well as
awareness of their own roles and responsibilities in
achieving those aims. The complete MBO system is
to get managers and empowered employees acting
to implement and achieve their plans, which
automatically achieve those of the organization.
 Where to Use MBO

 The MBO style is appropriate for

knowledge-based enterprises when your staff is
competent.

 It is appropriate in situations where you wish to build

employees' management and self-leadership skills and tap
their creativity, tacit knowledge and initiative.
Management by Objectives (MBO) is also used by chief
executives of multinational corporations (MNCs) for their
country managers abroad.
 Setting Objectives
 In Management by Objectives (MBO) systems, objectives
are written down for each level of the organization, and
individuals are given specific aims and targets. "The
principle behind this is to ensure that people know what the
organization is trying to achieve, what their part of the
organization must do to meet those aims, and how, as
individuals, they are expected to help. This presupposes that
organization's programs and methods have been fully
considered. If they have not, start by constructing team
objectives and ask team members to share in the process.”
Setting objective technique

Smart principle

f i c
e ci
Sp b le
u r a
e as
M
ab l e
c h iev
A
R ele v a n t
Realistic /
SMART

Timetable
 Coordination

 As the business plan will cover all departments of the

organization, so all of the departments plan and budgets
must be coordinated, so that they are all work together to
achieve the business plan.

 At production level, coordination will ensure that:

 Department know what and when they need to
achieve
 Work flows from one department to another without
hold-up, over work for staff and machine…
 The resource are available (time, and place)
 There is no duplication of effort
Individual effectiveness and time management
 The aim of MBO for the individual is to provide clear direction. There
must also be a meeting of objectives. The individual will have personal
objectives. Which need to be placed in the context of business objectives
to ensures “goal congruence”- so that the individual can work toward
personal and organizational objectives simultaneously.

 The effectiveness of individuals depends on how well they organize

themselves. Include:
 Setting priority
 Skill of marshaling and utilizing resource
 Efficiency in time management: long term plan mid- term plan, daily work
plan
 MBO Principles

 Cascading of
organizational goals and objectives
 Specific objectives for each member
 Participative decision making
 Explicit time period
 Performance evaluation and feedback
MBO Strategy : Three Basic Parts

 All individuals within an organization are assigned a

special set of objectives that they try to reach during a
normal operating period.These objectives are mutually
set and agreed upon by individuals and their managers.

 Performance reviews are conducted periodically to

determine how close individuals are to attaining their
objectives.

 Rewards are given to individuals on the basis of how

close they come to reaching their goals.
 Six MBO Stages
 Define corporate objectives at board level
 Analyze management tasks and devise formal job
specifications, which allocate responsibilities and
decisions to individual managers
 Set performance standards
 Agree and set specific objectives
 Align individual targets with corporate objectives
 Establish a management information system to
monitor achievements against objectives
MBO Advantages & Disadvantages
 Advantages
 MBO programs continually emphasize what should be done
in an organization to achieve organizational goals.

 MBO process secures employee commitment to attaining

organizational goals.

 Disadvantages
 The development of objectives can be time consuming,
leaving both managers and employees less time in which to
do their actual work.

 The elaborate written goals, careful communication of goals,

and detailed performance evaluation required in an MBO
program increase the volume of paperwork in an organization.
 3. Systems, policy and procedures

Systems An agree- upon plan or process for carrying out an activity: ex:
accounting system, MIS
Policy General statement that provide guideline for management
decision – making
Procedure Are chronological sequences of actions required to perform a
task. They have 3 main advantages: efficiency; routine,
standardization
Rules Prescribes a specific, definite action that must be taken in a given
situation
Programs Are coordinated group or series of plans, which together achieve
a particular objective
Budgets
3.2. Office procedures and systems
3.2. Office procedures and systems
Effective system and procedures should ensure that:
 Relationship with customer are effectively managed
 Relationship with suppliers are effeftively managed
 Office functions interrelate properly and are not duplicated

Weaknesses in office procedures may be signalled by:

 Arguments over job functions

 Missing paperwork
 Disputes with customers/suppliers
 Goods not delivered
 3.3. Financial control procedures
 Financial control procedures exits specifically to
ensure that:
 Financial transactions are properly carried out
 The assets of the business are safeguarded
 Accurate and timely management information is
produced

 Example:
 Cheques over a certain amount to need two
signatories
 Effective credit control procedures
 Computer security procedures and access levels
 3.3. Financial control procedures

Weaknesses in financial control procedures may be

signalled by:
 Cash or cheques going missing
 Excessive bad or doubtful debts
 Debtors not paying within credit terms
 Suppliers not being paid on time
 Unauthorized purchases being made
 Failure to produce accounts or other reports at the
specified time
 3.4. Managing risk
Risk management is the process whereby an organization
anticipates the potential for adverse events that may lead to injury or
loss and acts to avoid those events before they occur an/ or to
ameliorate them after they occur

Risk Risk Risk

assessment managment transference
 4. Customer oriented

4.1. Managing the relationship with customer

4.2. Customer oriented: internal and external customer

 4.2. Customer oriented:
internal and external customer
An internal customer is the person within the company who
receives the work of another and then add his or her contribution to
the product or service before passing it on to someone else

Market driven Driving market

Consumer
Consumerexpectation/
expectation/ Marketing
Marketingstrategy
strategy
preferences
preferences Anticipate
Anticipateand
andform
form
customer
customerexpectation
expectation

Marketing
Marketingstrategy
strategy
Meet
Meetcustomer
customerexpectation
expectation Create
Createcustomer
customerpreferences
preferences
better
betterthan
thanthe
thecompetition
competition for
forproducts
productsand
andservices
services

Competitive
Competitiveadvantage
advantage Competitive
Competitiveadvantage
advantage
 5. Product policy.
5.1. Product development
 Product means everything that is used by a firm to provide consumer
satisfaction.

 Developing your product line has to be based on a thorough

understanding of consumer, the market and all the various forces that
make an impact upon them. These steps are:
 Appraising the product
 Analysing the customer needs, habits (present and future)
 Preparing product specification
 Formulating prices with tager volume anf profit in mind
 Controling product lines by developing administering policies,
programmes andplan
 Process product ideas to make plan for inovation
 Providing product information for manuals, advertising…
 Recommenting design and redisigning
 Corrdnating the plan and product program wit other management
fucntion.
5.2. Marketing research

Learned
6 Project management
6.1. What is a project?
6.2. Planning and resourcing technique
6.3. Projecting network
6.4. More projecting planning tool
 1. What is a project?

A project is an undertaking that has a beginning and an

end and is carried out to meet established goals within
cost, schedule and quality objectives.
Characteristics of project (Spinner, Elements of PM):
 Specific start and end point
 Well defined objectives
 The project endeavors is to a degree unique and not
repetitious
 Contains costs and time schedules to produce a specified
product or result
 Cuts across many organizational & functional lines
Objectives of project management
2. Planning and resourcing
techniques
1. Planning the project
2. Work breakdown structure
3. Estimating
4. Cost estimation
5. Estimating job times
 1. Planning the project

- Analyze the project

- Estimate time and cost
- Draw the network (network the diagram)
- Locate the critical path
- Schedule the project
- Monitor and control
- Revise plan
Work breakdown structure
 Work break down structure
• Breaking down a project into stages is often the best way of

Actually discovering the work that must be done in the project

 Determining the resources required

 Sequencing the work down, so that resources can be allocated in the most convenient way

• Example:

Building a house can be sub divided into

 Installing the cable runs

 Fitting the accessories

 Wiring the circuit breaker box

 Testing

 Connecting to the main

 Estimating
Different classifications to denote the accuracy of
estimates:

• Ball-park estimates are made before a project starts

(accurate to within 25%)

• Comparative estimates are made if the project under

consideration has some similarities with the previous one
(accurate to within 15%)

• Feasibility estimate arise from preliminary aspects of the

design (accurate to within 10%)

• Definitive estimates are only made when all the design

 Cost estimate

Costs
- Direct
- Overhead
Considerations
- Total materials
- Lead times
- Contingencies
- Additional work escalation
Estimating job time

Duration

Earliest start

Latest start
Gantt chart
6.3. Projects as networks
1. Network analysis
2. The critical path, event times, floats
3. Crashing activity
4. Uncertain activity durations
5. Criticisms of critical path analysis
1. Network analysis

• Network analysis is basically concerned with the

deployment of available resources for the
completion of a complex task

• Net work analysis is sometimes called critical path

analysis (CPA) or critical path method (CPM)

• Network analysis helps mangers to

 plan when to start various tasks

 allocate resources

 monitor actual progress

 find out when control action is needed

 1. Network analysis

• Draw a network diagram: the activity on arrow

presentation

• In a certain project, there are 2 activities: A and

B. Activity B cannot be started until activity A is
completed.

This would be represented as follows

Event Event
Activity Activity
A B
1 2 3
 1. Network analysis
• Neither activity D nor E can start until C is completed, but D and E could be done at
the same time if required.

D 3
1 2
C
E 4
• H can’t start until F and G are both complete

1 F
H
3 4

2 G
Example: Draw network for project building a factory

Activity Description Preceding activity

A Lay foundations -
B Build walls A
C Lay drains A
D Install electricity cables A
E Fit window frames B
F Fit door frames B
G Fit windows E
H Fit doors F
I Plaster inside walls G,H
J Lay floor C
K Fit power outlets D
L Install machines I,J,K
Network analysis

• A dummy activity is used in network analysis

when 2 activities could start at the same and
finish at the same time too. It is represented by a
broken arrowed line

• Any network can be analyzed into a number of

different path or routes. A path is simply a
sequence of activities from the start to the end of
the network
 Activity Description Preceding activity
A Install computer -
B Write programs A
C Hire trained staff A
D Test system B,C

3
1 2 4 5

Activity Description Preceding activity

A Buy equipment -
B Allocate extension numbers -
C Install switch board A
D Install wiring B,C
E Print office directory B

2 C 3 D
dummy
A 5
1 4
B E
 The critical path, event times and floats

• The critical path is the path through the network with the greatest total duration

• A network can have more than one critical path, if several paths tie for the greatest
duration

• Activities on the critical path must be started and completed on time, otherwise
the total project tie will be extended
Example:

The following activities comprise a project to renovate a block of flats

Activity Description Preceding Duration (Weeks)

activity
A Replace windows in lounges - 5
B Rewire - 4
C Replaster walls of loungers A 2
D Fit lights in lounges B 1
E Decorate bedrooms B 5
F Install plumbing B 5
G Decorate lounges C,D 4
H Decorate kitchens F 3
I Decorate bathrooms F 2

What is the critical path and its duration?

 2 C
A
5 2 4 G
1 4
B
E 7
4 H
3 5
F 3
I 0
5 6
5 2

Path Duration (weeks)

A-C-G 5+2+4 11
B-D-G 4+1+4 9
B-E 4+5 9
B-F-H 4+5+3 12
B-F-I-Dummy 4+5+2+0 11

The critical path is B-F-H, with a duration of 12 weeks

 The critical path, event times and floats
 Earliest event time is the earliest time that any subsequent activities can start

 Latest event time is the latest time by which all preceding activities must be
completed if the project as a whole is to be completed in the minimum time

Earliest event time

Event
number
Latest event time
 The critical path, event times and floats

• Activities which are not on the critical path are non-critical

path , can:

Start late, and/or

 Take longer than the time specified

Without holding up the completion of the project

• The float for any activity is the amount time by which its
duration could be extended up to the point where it would
become critical

• The total float for an activity

 Criticisms of critical path analysis

• It is not always possible to devise an effective work

breakdown structure

• There are inevitable problems in estimation. Where the

project is completely new, the planning process may be
conducted in conditions of relative ignorance

• It does not appear to develop plans for contingencies

• With costing techniques, cost are based only on labor hour
and all problems relating to absorption of indirect overhead
apply
6.3. MORE PROJECT
PLANNING TOOLS
•Gantt chart
•Resources histograms
•Building a plan
 Gantt charts
A Gantt chart is a horizontal bar chart used to plan the time
sale for a project and to estimate the amount of resource
required
 Resource histograms

• A resource histogram shows a view of project data in which resource requirements,

usage and availability are shown against a time scale

• It is a bar chart showing the number and mix of staff over the duration of the project

• It is used to plan and control the human resource requirement of the project
 Resource histograms

A project manger might use a resource histogram to help with decisions as to

when to schedule non critical activities
 Building a plan
You are to initiate a project to study the feasibility of building a new
supermarket. The activities to be carried out to complete the feasibility project
are given below
Activity Description Preceding Expected time Staff
activity (weeks) required
A Preliminary design - 5 3
B Materials research - 3 2
C Obtain material quotes A 2 2
D Draw up plans A 5 5
E Marketing research A 3 3
F Costing C 2 2
G Get planning permission D 4 5

H Design, research fittings B,E 6 4

I Pricing estimates H 2 1
J Final report F,G,I 6 2
 Draw a network and indentify its critical path

• The critical path is A, E, H,I, J

• Total expected duration= 5 + 3 + 6 + 2 + 6 = 22 weeks

The Gantt chart is constructed with reference to the earliest times the duration and
the number of staff required for each activity
The number
of staff
required for
the project is
shown in the
resource
histogram
• Conduct a survey in Nguyen Trai university and identify the type of
structure it has.
• Draw an organizational chart of Nguyen Trai Univeristy showing all
positions in the departments.
• Identify the culture existing in Nguyen Trai Univeristy and give
explanation for its
• After going through the structure and culture analysis identify different
functions, and processes carried out by these functions.
• List the relationships between different functions/processes.
• List some of the aims, objectives and mission of Nguyen Trai Univeristy
and briefly explain the effect of each on its structure and culture.
• After going through aims/objectives & functions analysis draw a process
map for any
of the function.
• Identify if there is a quality gateway implemented on the output of the
process you had chosen in previous task.