SUBJECT:-

FUNDAMENTALS OF
MANAGEMENT
PIMR
UNIT :- 2
SNEHAL VYAS TRIVEDI
UNIT:- 2

Planning & decision making

INTRODUCTION

• Planning is the process of thinking about and organizing the activities required to achieve a
desired goal. ... Planning is also a management process, concerned with defining goals for a
company's future direction and determining the missions and resources to achieve those
targets.
DEFINATION

• Planning is the fundamental management function, which involves deciding beforehand,

what is to be done, when is it to be done, how it is to be done and who is going to do it. It is
an intellectual process which lays down an organisation’s objectives and develops
various courses of action, by which the organisation can achieve those objectives. It
chalks out exactly, how to attain a specific goal.
CHARACTERISTICS OF PLANNING
Managerial function: Planning is a first and foremost managerial function provides the base
for other functions of the management, i.e. organising, staffing, directing and controlling, as
they are performed within the periphery of the plans made.

Goal oriented: It focuses on defining the goals of the organisation, identifying alternative
courses of action and deciding the appropriate action plan, which is to be undertaken for
reaching the goals.

Pervasive: It is pervasive in the sense that it is present in all the segments and is required at
all the levels of the organisation. Although the scope of planning varies at different levels and
departments.
• Continuous Process: Plans are made for a specific term, say for a month, quarter, year
and so on. Once that period is over, new plans are drawn, considering the organisation’s
present and future requirements and conditions. Therefore, it is an ongoing process, as
the plans are framed, executed and followed by another plan.
• Intellectual Process: It is a mental exercise at it involves the application of mind, to
think, forecast, imagine intelligently and innovate etc.
• Futuristic: In the process of planning we take a sneak peek of the future. It encompasses
looking into the future, to analyse and predict it so that the organisation can face future
challenges effectively.
• Decision making: Decisions are made regarding the choice of alternative courses of
action that can be undertaken to reach the goal. The alternative chosen should be best
among all, with the least number of the negative and highest number of positive
outcomes.
IMPORTANCE/PURPOSE OF PLANNING

• It helps managers to improve future performance, by establishing objectives and

selecting a course of action, for the benefit of the organisation.
• It minimises risk and uncertainty, by looking ahead into the future.
• It facilitates the coordination of activities. Thus, reduces overlapping among activities
and eliminates unproductive work.
• It states in advance, what should be done in future, so it provides direction for action.
• It uncovers and identifies future opportunities and threats.

• It sets out standards for controlling. It compares actual performance with the standard
performance and efforts are made to correct the same.
STEPS INVOLVED IN PLANNING PROCESS
• Define objectives
• The first, and most crucial, step in the planning process is to determine what is to be accomplished
during the planning period. The vision and mission statements provide long-term, broad guidance on
where the organization is going and how it will get there. The planning process should define specific
goals and show how the goals support the vision and mission. Goals should be stated in measurable
terms where possible. For example, a goal should be “to increase sales by 15 percent in the next quarter”
not “increase sales as much as possible.”
• Develop premises
• Planning requires making some assumptions about the future. We know that conditions will change as
plans are implemented and managers need to make forecasts about what the changes will be. These
include changes in external conditions (laws and regulations, competitors’ actions, new technology being
available) and internal conditions (what the budget will be, the outcome of employee training, a new
building being completed). These assumptions are called the plan premises.
• Evaluate alternatives
• There may be more than one way to achieve a goal. For example, to increase sales by 12 percent, a
company could hire more salespeople, lower prices, create a new marketing plan, expand into a new
area, or take over a competitor. Managers need to identify possible alternatives and evaluate how
difficult it would be to implement each one and how likely each one would lead to success. It is valuable
for managers to seek input from different sources when identifying alternatives. Different perspectives
can provide different solutions.
• Identify resources
• Next, managers must determine the resources needed to implement the plan. They must examine the
resources the organization currently has, what new resources will be needed, when the resources will be
needed, and where they will come from. The resources could include people with particular skills and
experience, equipment and machinery, technology, or money. This step needs to be done in conjunction
with the previous one, because each alternative requires different resources. Part of the evaluation
process is determining the cost and availability of resources.
• Plan and implement tasks
• Management will next create a road map that takes the organization from where it is to its goal. It will
define tasks at different levels in the organizations, the sequence for completing the tasks, and the
interdependence of the tasks identified. Techniques such as Gantt charts and critical path planning are
often used to help establish and track schedules and priorities.
• Determine tracking and evaluation methods
• It is very important that managers can track the progress of the plan. The plan should determine which
tasks are most critical, which tasks are most likely to encounter problems, and which could cause
bottlenecks that could delay the overall plan. Managers can then determine performance and schedule
milestones to track progress. Regular monitoring and adjustment as the plan is implemented should be
built into the process to assure things stay on track.
PRINCIPLES OF PLANNING
1. Principle of contribution to objectives:- plan must be directed towards organizational objectives.
2. Principle of objectives:- objectives are the basis of planning so they should be clear, specific,
measurable and unambiguous. They should be understood and accepted by all the organisational
members.
3. Principle of primacy of planning:- planning is pre-requisite to other managerial functions. It should be
effective.
4. Principle of efficiency of plans:- Plans must be efficient in their contribution to objectives. I.e. Returns
must be exceed the costs.
5. Principle of planning premises:- Since planning is bases on forecasts, clear planning premises lead to
efficient planning process. Planning premises are assumptions or forecasts about future on which plans
are based.
6. Principle of Strategy and policy framework:- Strategies and policies help to attain organisational goals.
Clear policies and strategies lead to clear and effective plans.
7. Principle of limiting factor:- limiting factor limits the capacity of the organization to achieve the goals.
While selecting a course of action, managers narrow their search for alternative and try to overcome them
8. Principle of commitment:- plans should cover a time span long enough for managers to fulfill their
commitment to the decision made by them.
9. Principle of flexibility:- Plans should be flexible to adjust to environmental changes.
10. Principle of navigational changes:- This principle is closely related to the principle of flexibility.It reviews
the plan from time to time and reframes them if the need arises as the navigator does when the ship is not
going in the right direction.
SOLUTION

1. Introduction of firm/company
2. SWOT analysis
3. Problem identification
4. Summary
5. Suggestions
6. Answers of given questions
• Q.2
• Ans:-There are 8 types of plans
1. Strategic plans
2. Operational plans
3. Long term plans
4. Short term plans
5. Specific plan
6. Directional plans
7. One time plan/single use plan
8. Standing plan/ongoing plans
UNIT-III
CONCEPT & NATURE OF OBJECTIVES

• PIMR(MM)
• I sem
• Snehal Vyas Trivedi
MEANING OF OBJECTIVES:

• Objectives are the ends for the achievement of which managerial activities are directed.
Effective management is possible only through the setting up of objectives and all managerial
efforts should be directed to achieve these objectives. 
• Objectives constitute the purpose, the attainment of which is necessary for the business. An
organization can grow in an orderly way if well defined goals have been set. Objectives are a
pre-requisite for planning. No planning is possible without setting up of objectives.
• Objectives are not only helpful in planning but also in other managerial functions like
organizing, directing and controlling. 
• Clear cut objectives help in proper decision-making and in achieving better results.
DEFINITION OF OBJECTIVES

• Mc. Farland defines objectives, “Objectives are the goals, aims, or purposes that organizations
wish to achieve over varying periods of time.”
• In the words of Terry, “A managerial objective is the intended goal which prescribes definite
scope and suggests direction to efforts of a manager.”
CLASSIFICATION OF OBJECTIVES:

• 1. Primary Objectives:
• These are the objectives for which a company has been started. Every business aims to earn
more and more profits out of its working. Primary objectives are related to the company and
not to individuals. 
• Earning of profits out of providing goods and services to the customers is the primary objective
of a company. The goods and services are provided as per the requirements of customers.
Earning profits through customer satisfaction helps in earning goodwill and customer loyalty.
• The production of goods and services as per determined targets will be achieved through
individual goals of employees in the organization.
• 2. Secondary Objectives:
• These objectives help in achieving primary objectives. The targets are identified and efforts are
made to increase efficiency and economy in the performance of work.
• The goals dealing with analysis, advice and interpretation provide support to goals directed by
primary objectives. 
• Secondary objectives, like primary objectives, are impersonal in nature and helps in achieving
primary objectives.
• 3. Individual Objectives:
• These are the goals which individual members in an organization try to achieve on daily,
weekly, monthly or yearly basis. 
• These objectives are achievable as subordinate to primary and secondary goals. 
• Most of the individual objects are economic, psychological or non-financial rewards which an
individual tries to achieve by using resources of time, skill and effort.
• An individual tries to satisfy his needs and desires by working in an organization. 
• In order to motivate individuals for raising their performance, organizations offer varied
incentives.
• 4. Social Objectives:
• These are the goals of an organization towards society. These include the obligations required
by the community, government agencies etc. 
• These also include goals intended to further social, physical and cultural improvement of the
society. Social obligations of business has become essential these days.
• Business has to produce goods and services by taking into consideration health requirements of
people. 
• There are expectations that business should also spent a part of its profits for the welfare of
community.
HIERARCHY OF OBJECTIVES:
IMPORTANCE OF OBJECTIVES:

• 1. Market share is high.

• 2. Consumer satisfaction.
• 3. Hovel Ideas
• 4. Cooperation everywhere.
• 5. More output.
• 6. Cost control.
• 7. Loyalty of employers.
• 8. Different kinds of products.
ADVANTAGES OF OBJECTIVES:

• 1. Proper Planning
• 2. Single Motivation
• 3. Direct Coordination:
• 4. Control Process is Standard
• 5. Integration
• 6. Decentralization of Authority
DISADVANTAGES OF OBJECTIVES:

• 1. In objectives, individual satisfaction unlimited. If we satisfy one wants, new wants are arises
and similarly the employee attitude, the different process, of thinking creates objectives in
disable manner.
• 2. Sometimes more manpower less machines is more machine and material less manpower. It
creates the problem in getting without taking into account the resources available in the
organisation.
• 3. Sometimes there is tendency to exploit between the workers. There may be problem in goal
attainment. This problem will lead due to results in frustration among the workers.
• 4. Objective is normally affect the organisation due to cut down labour cost this may affect the
labour and management relationship.
PROPER SETTING OF ENTERPRISE OBJECTIVES:

• 1. Objective must be performed or defined in exactly right terms. Ambiguity should be avoided
in the setting of objectives.
• 2. The statement must be qualitative so that the objectives must be essential. Only then
accomplishment of measures will become easy
• 3. Objectives must be truthful and procedural manner. So as to maintain the availability of
resources, extent of competition and government regulation etc.
• 4. Certain policies, procedures programmes and strategies must be supported the objectives so
as to depends on the existence.
• 5. It is also necessary to make the objectives very soft. Hard objectives may cause the work very
heavy and tough.
SMART GOAL APPROACH
SMART GOAL FOR STUDENTS
EXAMPLES OF CORPORATE OBJECTIVES

• Prepare for product launch by developing launch checklist of activity, tasks, due-dates and drive
approval by all stakeholders by April 1
• Gain four new clients for my business this quarter by conducting 3 or more customer meetings each
week
• Increase the reach of the business Facebook page from 35,000 likes to 100,000 likes by July 31 through
ads, events, and video
• Ensure that the 90%+ of the team has completed training on the new inventory management software by
the end of the quarter.
TIPS FOR USING SMART GOALS AT WORK

• Tip #1. Get everyone on the same page

• Tip #2. Set an example and make your goals shared and public
• Tip #3. Create a schedule to keep everyone on track
• Tip #4. Be clear on what success looks like
• Tip #5. Collect feedback and optimize your goal setting process
MBO

• Management by objectives (MBO) is a strategic management model that aims to improve

organizational performance by clearly defining objectives that are agreed to by both
management and employees.
• For example, if you work in customer service, your goals could be to increase customer
satisfaction by 13% and reduce customer call times by two minutes. Create employee
objectives: Once you have created your goals, you need to develop objectives or steps to
achieve them.
PROCESS OF MBO
IMPORTANCE OF MBO
• Advantages of Management By Objectives
• Efficient Management. The management is efficient when the team's output is higher than the input
and resources they put into it. ...
• Effective Planning. ...
• Transparency. ...
• Reinforces Commitment. ...
• Goal Setting. ...
• Accountability. ...
• Efficient Utilization of Human Resources. ...
• Minimizes Ambiguity.
DISADVANTAGE OF MBO
• Disadvantages of MBO:
• Time-Consuming: MBO is time-consuming process. ...
• Reward-Punishment Approach: MBO is pressure-oriented programme. ...
• Increases Paper-Work: ...
• Creates Organizational Problems: ...
• Develops Conflicting Objectives: ...
• Problem of Co-Ordination: ...
• Lacks Durability: ...
• Problems Related to Goal-Setting:
LIMITATIONS OF MBO
• Limitations of MBO:
• Lack of Support of Top Management: ...
• Resentful Attitude of Subordinates: ...
• Difficulties in Quantifying the Goals and Objectives: ...
• Costly and Time Consuming Process: ...
• Emphasis on Short Term Goals: ...
• Lack of Adequate Skills and Training: ...
• Poor Integration: ...
• Lack of Follow Up:
ANALYSIS OF CASE

• Introduction of case ( Company name, it’s products, clients etc.)

• Define the problem (lack of coordination, not well defined goals, no standard procedure of purchase)
• Identify the alternatives ( Appointment of new manager, setting of SMART GOALS, MBO, employee
feedback, follow up, monitoring)
• Compare the alternative( Trial of every alternatives)
• Select the alternative( Implementation of right solution)
CONCEPT OF MBO
These Steps were missing in the case
Mr.Malhotra should follow these three basic strategies of MBO for the
achievement of organizational goal.