UNIT-2 , FME

PLANNING
What is Planning
UNIT– II: Planning and Organizing: Planning – Planning Process, Types of Plans, Decision making and Steps in Decision Making;
Principles of Organization: Span of control, organizational Design & Organizational Structures; Departmentalization, Delegation;
Centralization, Decentralization.
Concept: Planning is basically a decision making process
It refers to policy formulation and establishment of goals
Planning is deciding in advance what to do, when and how to do it
Def: Koontz & O’Donnel – Planning involves selecting entreprise objectives, goals and programmes and determining the ways of
reaching them
Types of Plans – Plans can be classified as
1) Missions
2) Objectives / Goals
3) Strategies
4) Policies
5) Procedures
6) Rules
7) Programs
8) Budgets
Steps in Planning
Following are the Steps in Planning
1) Being aware of opportunities – In light of
The Market
Competition
What customers want
Our Strengths, Weaknesses
2) Setting objectives / goals
Where we want to be and what we want to accomplish and when
3) Considering Planning premises
In what environment internal or external will our plans operate
Steps in Planning
4) Identifying alternatives – What are the most promising alternatives to
accomplish objectives
5) Comparing alternatives in light of goals – which alternative will give us
the chance of meeting our goals at the lowest cost and highest profit
6) Choosing an alternative – Selecting the course of action we will pursue
7) Formulating supporting plans – Such as plans to:
Buy equipment
Buy materials
Hire and train workers
Develop a new product
Steps in Planning
8) Quantifying plans by making budgets –
Developing such budgets as :
Volume and price of sales
Operating expenses necessary for plans
Expenditures for capital equipment

https://www.youtube.com/watch?v=tSzzjJd5BHk – Amazon, Jeff bezos

Types of Plans
• Mission - What is mission meaning?

• Mission is the core purpose of an organization or a company. It is a summary of the aims and core
values.
• A mission clearly tells what you as an organization do for the customers. A mission is comprehensive
but also very specific to set you apart from other organizations.
• Examples of Mission Statements
• Example #1: Amazon
• to be earth’s most customer centric company. To build a place where people can come to find &
discover anything they want to buy online
• Example #2: Apple
• committed to bringing the best personal computing experience to students, educators, creative
professionals & consumers around the world through innovative hardware, software & internet
offerings
• Example #3: Dell
• to be the most successful computer company in the world at delivering the best customer experience
in markets we serve
Types of Plans
• Example #4: Facebook
• to give people the power to share and make the world more open and connected
• Example #5: Google
• to organize the world‘s information & make it universally accessible and useful
• Example #6: Microsoft
• to enable people & businesses throughout the world to realize their full potential
• Example #7: YouTube
• to provide fast & easy video access & the ability to share videos frequently
• A mission statement is a short statement of why an organization exists, what its overall
goal is, identifying the goal of its operations: what kind of product or service it provides, its
primary customers or market, and its geographical region of operation
Types of Plans
Objective- Are the ends toward which activity is aimed
something that one's efforts or actions are intended to attain or
accomplish, target:
Ex: To secure a challenging position in a reputable organization to
expand my learnings, knowledge, and skills.
To secure employment with a reputable company, where I can utilize my
skills
A goal is an idea of the future or desired result that a person or a group
of people envision, plan and commit to achieve. People endeavour to
reach goals within a finite time by setting deadlines.
Types of Plans
Strategies – Is defined as the determination of basic long term objectives of
an entreprise and the adoption of courses of action and allocation of
resources necessary to achieve these goals
• Examples of strategic goals for finance:
• Create and launch a new product(s)
• Increase customer conversion.
• Become market leader.
• Sales: Company's sales growth/Market sales Growth -> must be >1.
• Customer satisfaction.
• Gain market position.
• Explore new customer segments.
• Increase revenues.
Types of Plans
Policies – General statements or understandings that guide or channel
thinking in decision making
Ex: drug and alcohol policy. health and safety policy. anti-discrimination and
harassment policy.
Procedures – They are guides to action
Ex: Case Western University – outlines 3 steps for its appraisal process
1. Setting performance objectives
2. Performing a mid-year review of the objectives
3. Conducting a performance discussion at the end of the period
Rules – spell out specific required actions or nonactions allowing no discretions
Ex: No smoking
Types of Plans
Budgets – A statement of expected results expressed in numerical
terms
Steps in planning
1.Being aware of opportunities- the Mkt, competition, what customers
want, our strengths & weaknesses
2. Establishing Objectives – The second step is establish objectives for
the entire unit and for each subordinate work unit
3. Developing premises – Premises are assumptions about the
environment in which the plan is to be carried out
Forecasting is imp is premising – What kind of Mkts, What volume of
sales, what prices, what products, what costs, wage rates, tax rates
Types of Plans
Developing Alternative Courses – Search for and examine alternative
courses of action especially those that are not apparent
Evaluating Alternative Courses -
Selecting a Course –
Formulating derivative plans
Quantifying plans by budgeting