1. Managerial Processes DOSHEM

2. Planning Thinking out in advance the sequence of actions to accomplish objectives All activities that lead to the definition of objectives

3. Overview of Planning Planning: looking ahead to chart the best courses of future action. Strategic planning: Long range planning to set organizational goals, objectives, and policies to determine strategies, tactics, and programs for achieving them. –Top management makes strategic plans. –Middle Management makes annual plans (to implement the above). –For supervisors the planning period is usually a week, day, or shift ( to deal with daily work).

4. Objectives, Plans, Decisions Objectives –End states or targets Plans –Means to hit the desired targets –Strategic and Operational Planning –Decision-making process focused on the future of an organization and how it will achieve its goals

5. Types of Plans Strategic plans –Broad future of the organization –External environmental demands –Internal resources

6. Types of Plans Operational plans –Translate operations into specific actions that achieve the strategic plan –Small units of the organization –Near term

7. Time horizon Long-term –An extended time, typically 5 years or more into the future Intermediate –A period of 1 to 5 years into the future Short-term Goals –Goals set for the very near future, typically less than 1 year

8. Hierarchy of Plans Strategic Plans Plans reflecting decisions about resource allocations, company priorities, and steps needed to meet strategic goals Operational Plans Plans setting short-term targets for daily, weekly, or monthly performance

9. Organizational Levels Corporate level (Strategic) –What industries should the firm be in? – What markets should the firm be in? –In which businesses should the firm invest money? Business level (Tactical) –Who are our direct competitors? –What are their strengths and weaknesses? What advantages do we have over them? – What are our own strengths and weaknesses? – What do customers value in our products/services?

10. Organizational Levels Functional level (Operational) –What activities must my unit perform well in order to meet customer expectations? – What information about competitors does my unit need in order to help the firm compete effectively? – What are our unit’s strengths and weaknesses?

11. Organizational Levels Brunswich Construction Facilities Management HospitalityEducationalHealth Care Finance department Operations department Marketing and Sales department Corporate Level Business Level (Strategic Business Units) Functional Level Adapted from Exhibit 8.2: Organizational Levels

12. Planning Process Define the purpose or problem and set objectives Collect and evaluate data relevant to forecasting the future (focus on the present) Develop alternative courses of action Decide on the best course of action Carry out the plan

13. Forecasting Forecasting: Predicting future needs on the basis of historical data, present conditions, and assured future. Forecasting controls staffing, purchasing, and production decisions. Forecasting is a very important function!

14. Planning for Change Define problem and set objectives Gather past, present, and probable future data Evaluate pros and cons, generate alternatives Make the nessicary decisions Implement the plan

15. Planning for Change Planning for change must be done carefully and thoroughly. It is very much like making other plans but the main differences are the extent of forecasting, the degree of risk, and providing for the impact of the change.

16. Workers Response and Resistance Workers respond to change through: resistance, insecurity, anxiety, resentment of personal losses, and rumors. How to deal with resistance to change: –Establish open communication –Emphasize advantages (avoid overselling) –Involve the workers in planning and carrying out change

17. The Planning Process Analyze environment (forecasts, benchmarks, contingencies, competitor analysis, scenarios) Set objectives Determine requirements Assess resources Develop action plansImplement plansMonitor outcomes Feedback Adapted from Exhibit 8.4: Planning Process

18. The Planning Process Analyzing the environment –Forecasts: what does the future look like? –Environmental uncertainty Contingency plans: identify key factors that could affect the desired results and specify what actions will be taken if key events change –Benchmarking Investigation of the best results among competitors and noncompetitors and the practices that lead to those results

19. The Planning Process Setting objectives –Priorities and multiple objectives Establish which objectives are most important and which have temporary priorities, –Measuring objectives/targets Performance Specified Performance Profits relative to sales Spending

20. The Planning Process Determining requirements –Assess current performance –What will it take in order to get from current levels of performance to that level specified in the objectives? –What drives market share? –What capital will be required?

21. The Planning Process Assessing resources –Resources required What resources are needed to achieve the stated objectives? –Resources available Do we have the needed human talent to meet the requirements? Do we have the financial resources available? Do we have the required technology?

22. The Planning Process Developing action plans –Sequence and timing Materials, manpower and components must be brought together in the right amounts and sequences –Accountability Who is accountable for which actions?

23. Gantt Chart Contact clients Obtain contract specifications Submit bid Receive feedback Revise bid Submit revised bid Final approval or rejection Complete bid review NovOctSeptAugustJulyJuneMay Adapted from Exhibit 8.5: Gantt Chart

24. The Planning Process Implementing Plans –Monitoring the implementation Monitor the progress of the plan and its implementation Monitor the level of support that the plan receives as it is being implemented Monitor the level of resistance –Real-time adjustment

25. The Planning Process Monitoring outcomes –Unanticipated consequences Negative unanticipated consequences Positive unanticipated consequences Feedback loop –Apply what has been learned to modify and improve the planning process

26. Planning Tools Budgets –Capital expenditure budget Specifies the amount of money to be spent on specific items that have long-term use and require significant amounts –Expense budget Includes all primary activities on which a unit or organization plans to spend money and the amount allocated for the upcoming year

27. Planning Tools –Proposed budget Provides a plan for how much money is needed, and is submitted to a superior or budget review committee –Approved budget Specifies what the manager is actually authorized to spend money on and how much Budgets

28. Planning Tools Two budgetary approaches –Incremental budgeting approach From the approved budget of the previous year present arguments for why the upcoming budget should be more or less –Zero-based budgeting approach Justify all allocations of funds from zero each year

29. Goal Setting Attributes of effective goals –Specific –Measured –Agreed –Realistic –Time bound

30. Management by Objectives (MBO) Organization Strategy Strategic plan Tactical plan Operational plan Jointly set goals Goal acceptance Goal difficulty Goal specificity Explicit time period Individual motivation and ability Top management support and involvement Performance Periodic review and evaluation Feedback Adapted from Exhibit 8.6: The Process of MBO

31. Day-by-Day Planning Top priority of the first line supervisor. Primary concern is what is to be done, who will be doing it, and adjusting various standing plans. Plan before the day begins. Establish routines simplify planning. Whenever possible reduce risks by increasing predictability.

32. Planning Your Own Time Track your present time use, and analyze your use of time. Get rid of activities that waste your time (socializing, poor organization, procrastination, etc.). Set priorities. Initiate long-range solutions. Set aside regular periods of time without interruption for interviews, etc.

33. Thinking Analysis and Process Strategic Planning

34. Key Elements Strategic Thinking Strategic Analysis Corporate Targets and Objectives Corporate Strategies Development Strategic Business/Departmental Objectives Action Planning Financial Projections

35. Example Strategic Plan Executive Summary Introduction Historical Perspective Mission Review Planning Assumptions Key Areas Monitoring and Review

36. HIERARCHY OF PLANS CORPORATE PLAN For the entire organisation (Break down into strategic plans) Strategic Plans Promotion, Facilitating, Client Service strategies for Services Markets Customers etc Finance strategies for financial controls funding etc Facilities strategies for offices structures computers etc Human resource strategies for skills, Training Manpower Other strategies for other strategies issues Which are summarized into the business plan THE BUSINESS PLAN (QUANTITY AND SUMMARIZE ALL THESE STRATEGIES AND OPERATIONAL PLANS) Annual Budgets Cash flows Plans Staffing, development, compensation Capital Expenditure Information Systems Others OPERATIONAL PLANS at Divisional, Departmental, unit and sectional levels

37. Strategy Defined Strategy is the pattern of resource commitments of an organisation which -reflects the company’s purpose -is more than purely economic -Results from a continuous process

38. purpose reflects the company’s purpose and objectives, and a concept of its activities

39. culture Is more than purely economic, and corresponds to the values of the owners, managers and workers of the firm, their sense of identity, and their ways of perceiving their environments

40. continuous Results from a continuous process, a stream of perceptions, analyses, decisions and actions, intertwined with the discovery of new goals and objectives and the mobilising of people towards them

41. Strategic Corporate Planning Corporate planning is a management process which involves the continuous assessment of the totality of a business enterprise (or organisation or entity) and its environment to determine what it is NOW, what it must be in the FUTURE, and HOW it can become what it must be.

42. Vision States –what the organisation wants to be –what it must be in the future –a desire that inspires –picture providing clear decision criteria

43. Mission A mission statement describes what the organization seeks to do, why it exists and who it serves (its customers are).

44. Strategic Thinking In strategic planning the thinking is everything Proactive thinking instead of day-to-day fire fighting or crisis management Innovation instead of ‘that is how we have Creativity instead of the same old thing

45. Requirements It requires the readiness to accept a formal factual and disciplined approach to organisations (entities). For an organisation to succeed, corporate planning requires the commitment of the chief executive and the entire management team to the discipline of keeping the organisation on course to implement the agreed plan and not yield to the easy temptation of fire fighting.

46. OBJECTIVES We have formulated a vision We have developed a mission statement The SWOT We need to balance the present position We need to find the right mix of objectives

47. IMPORTANCE OF OBJECTIVES Objectives help translate our vision and mission into reality through achievable results

48. OBJECTIVES Hoped for results or goals to be achieved within a specific time period Indications of management intentions Fundamental standards against which performance can be measured

49. Organizational Strategies Organizational strategies are actions that affect the organization as a whole, and which are taken because management believes that this would enable the organization achieve its vision, mission and objectives

50. Strategy development A simple approach to strategy development is considering the action to be taken to deal with every item arising from the strategic planning process eg.: vision mission strengths (capitalise on them) weaknesses (eliminate or minimise effects)

51. Assessment How do we assess … Examine the fundamentals Analyse the totality of the organisation - Strengths - Weaknesses Analyse the environment - opportunities i- threats Establish direction/set objectives Develop strategies