CSC350: Learning Management Systems COMSATS Institute of Information Technology (Virtual Campus)

Lecture # 5 Planning and Planning Tools

Review of the Previous Lecture Understanding international management Categorizing organizations by level of international involvement Constituting a multinational corporation Information about those who work in multinational corporations Relating management functions to multinational corporations Transnational organizations Issues impacting managing in the international system

Topics of Discussion General characteristics of planning Different types of plans Major steps of the planning process Relationship between planning and organizational objectives Management by objectives (MBO) program Types of planning tools

GENERAL CHARACTERISTICS OF PLANNING Defining Planning Process of determining how an organization can get where it wants to go and what it will do to accomplish its objectives Through planning, the firm identifies: Where it is going How it will get there

GENERAL CHARACTERISTICS OF PLANNING Purposes of Planning Minimize risk by reducing uncertainties Increase degree of organizational success Establish a coordinated effort within the organization Facilitate the accomplishment of the organization and its objectives

GENERAL CHARACTERISTICS OF PLANNING Advantages of Planning Helps managers become future-oriented Enhances decision coordination Emphasizes organizational objectives Helps ensure sustainability of the firm Helps managers identify and deal with problems that arise as the firm conducts its business

GENERAL CHARACTERISTICS OF PLANNING Disadvantages of Planning Managerial time involvement Rigidity and lack of adaptability Balance of time spent on organizing, influencing, and controlling

GENERAL CHARACTERISTICS OF PLANNING Primacy of Planning Planning is the primary management function Planning serves as the basis for the other management functions

TYPES OF PLANS Standing Single-Use Exist for routine guidelines & actions that occur repeatedly Single-Use Exist for single purpose only

STEPS IN THE PLANNING PROCESS

STEPS IN THE PLANNING PROCESS Step 1 – State Organizational Objectives Managers begin the planning process with a clear statement and understanding of the organization’s objectives Step 2 – List Alternative Ways of Reaching Objectives Managers need to list as many alternatives as possible for reaching the firm’s objectives

STEPS IN THE PLANNING PROCESS Step 3 – Develop Premises on Which to Base Each Alternative Managers need to identify the premises and assumptions upon which the alternatives are based Step 4 – Choose the Best Alternative for Reaching Objectives Managers determine which alternative best accomplishes an organizational objective

STEPS IN THE PLANNING PROCESS Step 5 – Develop Plans to Pursue the Chosen Alternative Managers begin their strategic/long-range and tactical/short-range plans based on the chosen alternative Step 6 – Put the Plans into Action Managers implement the plan and evaluate the results of the planning process

ORGANIZATIONAL OBJECTIVES The target toward which the organization’s open management system is directed Reflect the purpose (mission) of the organization Identify what the organization exists to do, given a particular group of customers and customer needs

ORGANIZATIONAL OBJECTIVES

ORGANIZATIONAL OBJECTIVES In an open management system, the organization’s targets/objectives are reached from many sources

ORGANIZATIONAL OBJECTIVES AREAS OF FOCUS Market Standing Innovation Productivity Physical & Financial Resources Profitability Managerial Performance & Development Worker Performance & Attitudes Public Responsibility

ORGANIZATIONAL OBJECTIVES Three Types of Objectives Short-Term Targets to be reached in one year or less Intermediate-Term Targets to be achieved in one to five years Long-Term Targets to be achieved in five to seven years

ORGANIZATIONAL OBJECTIVES Guidelines for Establishing Quality Objectives Let the individuals responsible for attaining the objectives have a voice in setting them State objectives as specifically as possible Relate objectives to specific actions whenever necessary Pinpoint expected results

ORGANIZATIONAL OBJECTIVES Guidelines for Establishing Quality Objectives Set goals high enough that employees will have to strive to meet them but not so high employees will give up trying to meet them Specify when goals are expected to be achieved Set objectives only in relation to other organizational objectives State objectives clearly and simply

MANAGEMENT BY OBJECTIVES (MBO) Management approach based exclusively on objectives Includes three basic parts: Mutually set and agreed upon objectives Performance reviews conducted periodically Employees rewarded upon reaching goals

MANAGEMENT BY OBJECTIVES (MBO) The MBO Process

MANAGEMENT BY OBJECTIVES (MBO) Factors Necessary for a Successful MBO Program Top management commitment Managers and employees develop goals together Employee performance conscientiously evaluated against established objectives Management follow-through on employee performance and reward accordingly

MANAGEMENT BY OBJECTIVES (MBO) Advantages: Emphasize what should be done in an organization to achieve organizational goals Secures employee commitment to attaining organizational goals Disadvantages: Time-consuming Increased paperwork

PLANNING TOOLS FORECASTING Process of predicting future environmental happenings that will influence the operations of the organization Ability to help managers understand future makeup of the organizational/managerial environment helps managers formulate more effective plans

Planning Tools - Forecasting Sales Forecasts Qualitative Jury of Executive Opinion Method Delphi Method Sales Force Estimation Method Quantitative Moving Average Regression Product Stages

Planning Tools - Forecasting Regression Analysis Method

Planning Tools - Forecasting Product Stages Method

PLANNING TOOLS SCHEDULING Process: Formulating detailed listings of activities that must be accomplished to attain an objective Allocating resources necessary to attain the objective Setting up and following time tables for completing the objective

Planning Tools - Scheduling Gantt Charts

Planning Tools - Scheduling PERT – Program Evaluation & Review Technique

WHY PLANS FAIL Understanding why plans fail helps eliminate factors that cause failures and increases probability plans will succeed… Planning not integrated Lack of understanding Managers across all levels are not engaged Responsibility is wrongly vested Expectation plans are realized effortlessly

WHY PLANS FAIL Understanding why plans fail helps eliminate factors that cause failures and increases probability plans will succeed… Too much attempted at once Management fails to implement the plan Financial projections confused with planning Inadequate inputs used in planning Failure to grasp overall planning process

Conclusions Think of the sum-up and listen to me carefully.

Thank You