Planning Sreekanth N V

Overview Nature Forms of Planning Types of Plans Importance of Planning Steps in Planning& Planning Premises Limitations of Planning Decision Making Types of Decisions Steps in decision making Difficulties in Decision Making

Introduction What is Planning? Planning is the beginning of the process of management It is an intellectual process which requires a manager to think before acting. It is thinking in advance

Nature of Planning Intellectual Process- think before act -What? / When?/How? /Who? ---To do Decision making is a integral part of planning Planning is a continuous process A plan must be flexible -Flexibility in technology/market/Organization/Finance/personnel Planning is an all-pervasive function -Top level managers set long term (5yrs/annual)goals -Lower level managers on weekly or monthly goals -First line supervisors on daily goals

Importance of Planning What are the reasons for planning to be considered a management function? -Minimizes risk and Uncertainty -Leads to Success -Focuses attention on Organizational goals -Facilitates control -Trains the executives

Forms of Planning Strategic planning Tactical Planning It decides major goals and policies of allocation of resources to achieve these goals It decides the detailed use of resources for achieving the goal It is done at higher levels of management. Middle level managers are not even aware that strategic planning is being considered It is done at lower levels of mangement It is long term in nature It is short term Forecasts are long term about technology, political environment and is very uncertain It is generally based on the past performance of the organization and is less uncertain It is less detailed as it does not deal with day-to day operations of the organization It is more detailed because it is involved with day-to-day operations of the organization

Types of Plans Objectives For Non-repitative For repititive Strategies Broad ends of organizations For Non-repitative Single use plans (programmes and Budgets For repititive Standing Plans (Policies. Procedures, methods and rules) Strategies Objectives achieved by strategies

OBJECTIVES They are the goals or aims which the management wishes to achieve Defined by “Vision” “Purpose” and “Mission” -Vision– a long term goal -Purpose– primary role defined by society where it operates -Mission– Unique aim that sets the organization apart from other organizations (An organizations objectives take into account all stakes and specify a common viewpoint acceptable to all stakeholders)

Characteristics of Objectives Objectives are multiple in number -market standing, innovation, productivity, physical and financial resources, profitability, manager performance and development, worker performance and attitude, public responsibility Objectives are tangible or intangible Objectives have a priority Objectives are generally arranged in hierarchy Objectives sometimes clash with each other

Activity Consider that each one of you have started an organization. You have given it a name and has a purpose. Set out the Vision Set out the Mission Set out goals

Strategies It is a plan which takes into account the strengths and weaknesses and provides a optimal match between the firm and the environment. -Environmental appraisal Political and legal factors Economic factors Competitive factors Social and cultural factors -Corporate appraisal Company’s SWOT analysis Leadership, product quality, customer service, low cost manufacturing skill, efficient distribution, etc

Standing Plans Policies General guidelines, For people at higher level, to fulfill objectives of organization, broad, established without any study Procedures General guidelines for people at lower levels, procedures tell you how implement policies, very specific, established after thorough study Methods: Steps in which procedure to be performed, increases effectiveness Rules Detailed recorded instructions, details of dos and donts, brings uniformity in the efforts

Single use plans Programmes Programmes are precise plans or definite steps in proper sequence which need to be taken to discharge a given task. Budgets:According to Institute of Costs and Work Accountants, London Budget is a “financial and/or quantitative statement prepared prior to definitive period of time, of the policy to be pursued during that period, for the purpose of obtaining a given objective” Eg: Sales Budget, Production Budget, Cash Budget, Revenue Budget and expense Budget.

Steps in Planning Establishing set of goals to be achieved Establishing planning premises (Internal & External/Tangible & Intangible/ Controllable and non-controllable) Deciding the planning period Finding alternative courses of action Evaluating and selecting a course of action Developing derivative plans Measuring and Controlling the progress

Activity Now that you have established the Vision and Mission. Start the planning process for your organization..

Limitations of Planning It is old Requires money, energy and risk Unnecessary in risk free organizations Delays decision making Some do not require planning where demand is difficult to gauge.

For Effective Planning Coordination Communication Participation Proper climate Planning Skills -Ability to think ahead -Ability to define company objectives -Ability to forecast future environmental trends -Ability to frame correct strategies -Ability to monitor the implementation of strategies

Prepare Your Own Business Plan Set an Objective -Set Vision, Purpose & Mission statements Make Standing Plans -Set Policies, Procedures, Methods & Rules Make Single Use Plans -Set the Programmes & Budgets Also make short term(3 months- 1year) and long term goals (1 year-5 year)

Decision Making It is a major part of the manager’s role. It is continuous Meaning: Choosing- on the basis of some conscious and deliberate logical or judgement Alternatives- requires wisdom, experience to evaluate the alternatives and select the best one. Purpose- make or take decisions based on how close the decision’s outcome closes to the planned goals.

Types of Decisions Programmed and Non-Programmed Decisions -Programmed decisions are those that are made in accordance with some policy, or procedure that they do not have to be handled starting from the beginning each time of they occur. -Non-Programmed decisions are novel and non-repititive . If a problem has not occurred before manager solves it by own personal beliefs, attitudes, value judgments. Major and Minor decisions -Degree of futurity for decision -Impact of decision on other functional areas -Qualitative factors that enter the decision -Recurrence of Decisions Routine and Strategic decisions Individual and Group decisions Group decisions- Increased acceptance, Easier coordination, Easier communication, More information processed

Rational Decision Making Recognising the problem Deciding priorities among problems Diagnosing the problem Developing alternative solutions or courses of action Measuring and comparing the consequences of alternative solutions Converting the decision into effective action and follow-up of action

Environment of decision making Certainty Risk Decision tree Uncertainty -Maxmin, Maximax, Minimax

Difficulties in decision making Incomplete information Unsupporting environment Non-acceptance of subordinates Ineffective communication Incorrect timing