Professional Documents
Culture Documents
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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
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Proper planning accomplishes the following
1. Managing Uncertainty
2. Better Focus
3. Improves Coordination
5. Improves Effectiveness
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Planning is Pervasive
•Corporation Level
•Strategic Business Unit (SBU) Level
•Functional or Department Level
•Team or work group level
•Individual level
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Corporation Headquarters
SBU 1 SBU 2
prince dudhatra-9724949948
prince dudhatra-9724949948
Organizational Mission
The Mission states the organization’s
values, aspirations, and reason for
existence.
The Mission Statement is the basis for
all following goals and plans.
Without a clear mission, goals and plans
may be developed haphazardly causing
the organization to fail.
prince dudhatra-9724949948
Goals and Plans
Goals: specify future ends. Desired
future state.
prince dudhatra-9724949948
Strategic Goals and Plans
Strategic Goals pertain to the entire
organization (not specific divisions and
departments).
Strategic Plans define the action steps
the company will use to attain strategic
goals.
prince dudhatra-9724949948
Tactical Goals and Plans
Tactical Goals apply to middle
management and describe what major
subunits must do to to enable the
organization to meet its strategic goals.
Tactical Plans:
Help execute major Strategic Plans.
Cover a shorter period of time.
prince dudhatra-9724949948
Operational Goals and Plans
Operational Goals: the specific results
expected of small units, workgroups,
and individuals.
Operational Plans: developed at the
lower levels of an organization to
specify actions required to achieve
operational goals and to support tactical
plans.
prince dudhatra-9724949948
prince dudhatra-9724949948
Goal Characteristics
Be specific and measurable
Quantitive Terms
Cover key result areas
Contribute most to company performance
Be challenging but realistic
Be for a defined time period.
Be linked to rewards.
prince dudhatra-9724949948
Types of Plans
Single-use plans are developed to achieve
objectives that are not likely to be repeated in
the future. Single-use plans include
programs, budgets and projects.
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SINGLE-USE
prince dudhatra-9724949948
STANDING PLAN
prince dudhatra-9724949948
Other Types Of Plans
prince dudhatra-9724949948
The Planning Process
Planning may be seen as the identification
and formulation of the objectives of a
business (Goal Setting)
Determining Planning Premises
Analyzing the data (Identifying
Alternatives)
Evaluation & Selection
Implementation & Review
prince dudhatra-9724949948
The Planning Process
GOAL SETTING
Identification and formulation of
objectives
prince dudhatra-9724949948
Making Planning Effective
Linked to Long term objectives
Consistency
Everyone participates
Feasible
Flexible
Simple
Top Management Support
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MANAGEMENT BY OBJECTIVES
prince dudhatra-9724949948
What Is an Objective?
prince dudhatra-9724949948
Management By Objectives (MBO)
A method whereby managers
and employees define
objectives for every
department, project, and
person and use them to monitor
subsequent performance.
prince dudhatra-9724949948
THE NATURE & PURPOSE OF MBO
MBO is concerned with goal setting and
planning for individual managers and their units.
The essence of MBO is a process of joint goal
setting between a supervisor and a subordinate.
Managers work with their subordinates to
establish performance goals that are consistent
with higher organizational objectives.
MBO helps clarify the hierarchy of objectives as
a series of well-defined means-ends chains.
prince dudhatra-9724949948
Essential Steps for MBO
Set Goals
The most difficult step.
Develop Action Plan
For both workgroups and individuals.
Review Progress/ Take corrective action
Periodic during the year.
Appraise Overall Performance.
Review Annual Goals.
prince dudhatra-9724949948
Essential Steps for MBO
Set Goals Develop Action Plan
–The most difficult step. –Course of action
–Concrete –For both workgroups and
individuals
–Specific target and timeframe
–Assign responsibility
Review Progress
–Periodicity?
–Course corrections
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MAKING MBO PROCESS EFFECTIVE
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•Managers tell their subordinates what
organizational and unit goals and plans top
management has established.
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• Goals must be written and very clearly stated.
prince dudhatra-9724949948
THE EFFECTIVENESS OF MBO
- STRENGTHS
MBO helps identify superior managerial talent
for future promotion.
prince dudhatra-9724949948
THE EFFECTIVENESS OF MBO -
WEAKNESSES
The major reason for MBO failure is lack of top
management support
goals and plans cascading throughout the
organization may not be those of top management.
Some firms may overemphasize quantitative
goals
Some managers will not or cannot sit down
and work out goals with their subordinates
prince dudhatra-9724949948