Managing the Planning Process A Pandey

Planning A management function that: assesses the management environment to set future objectives; and maps out activities necessary to achieve those objectives. Planned actions require careful resource allocation. Plans must be accompanied by implementation guidelines.

Elements of Planning Objectives: what? Actions: what to do? Resources: with what? Implementation: how to?

Assessment of external forces Benefits of Planning Assessment of external forces Develop a sense of direction and purpose Identifying the factors that affect the organization Encouraging participation Coordination of efforts Establishment of priorities Focusing attention on different time horizons

Benefits of planning (continued) Understanding circumstances contributing to past success or failure Ensuring the availability of adequate resources Establishing performance standards Supporting organizational control systems Developing “what if” scenarios Management development

The Pitfalls of Planning Poor forecasts of future conditions Plans imposed from above Planning as a self-contained activity Extensive bureaucratization Inflexible adherence to objectives and processes

How to plan successfully Decentralizing the planning powers Using both numerical and judgmental methods Viewing planning as continuous and capable of adapting to change Avoiding paralysis of the analysis Concentrating on a manageable set of issues

GOOD BAD Good and Bad Planning Decentralize planning process Use numerical and judgmental methods Assess external forces Develop a sense of direction and purpose Identify factors that affect the organization Encourage participation Coordinate efforts Establish priorities BAD Poor forecast of future conditions Plans imposed from poor forecasts Planning as self- contained activity

Formal Planning and Opportunistic Planning Identify objectives Structure the major tasks of the organization to accomplish them. Opportunistic planning triggered by unforeseen circumstances. can coexist with formal planning and help the formal plan function more smoothly.

The Formal Planning Process Involves Setting objectives Charting a course of action to meet the objectives Implementation

Objectives Specific Measurable Achievable Realistic Timely More general at the top and more specific at the lower level Reflect its mission Should be prioritized

Charting a Course of Action Strategic Action Plans Proactive, congruent, synergistic Tactical Action Plans Division of labor, budgeting Operational Action Plans Inputprocessoutput cycle

To be effective, a strategic action plan should meet the following criteria: Proactivity – The degree to which the strategic action plan takes a long-term view of the future. Congruency – The extent to which the strategic action plan fits with organizational characteristics and the external environment. Synergy – The integration of the efforts of various organizational subunits to better accomplish corporate-wide business objectives

Tactical Action Plans must include: Division of Labor – The formal assignment of authority and responsibility to job holders. Helps ensure that tasks of jobholders are appropriate for accomplishing the department’s tactical action plan, which in turn should support the organization’s strategic action plan. Budgeting – Controlling and allocating funds. Variable budgeting Moving budgeting

A Typical Operating System Control Inputs Transformation Outcome Feedback Loop

Operational Plans must include Opportunity to use feedback for continued incremental learning. Ability to visualize alternative types of operations – that is, alternative ways to use resources to create a product or service. Ability to predict the effects of modifications in operations on the efficiency of operations. Ability to evaluate the effectiveness of operations.

Means of implementation: Authority Persuasion Policy Feedback mechanism

A Six-Stage Approach to Facilitate Organizational Problem Solving Identify performance gaps. Identify tasks and work processes. Check for organizational congruence. Align in-congruencies or inconsistencies to effectively implement the plan. Execute the plan. Learn from the consequences.

Mechanisms to Deal with Organizational Change Deal with power and politics Reduce individual anxiety and resistance Maintaining control during the transition period

What should the manager do? Focus on the Customer Ensure Goal congruity with the organization. Establish an effective goal-driven plan. Planning should not become a straitjacket. Engage others in plan design and implementation.