1. MG 2351 PRINCIPLES OF MANAGEMENT UNIT- II- PLANNING
R.HARIHARAN,
AP/ EEE

2. INTRODUCTION
Planning is outlining a future course of action in order to achieve an objective.
Nature – primary function, a dynamic process, based on objectives and policies, a selective process, pervasiveness of planning, an intellectual process, planning is directed towards efficiently, focus with future activities, flexibility of planning, planning is based on facts.

3. PURPOSE OF PLANNING Primary of planning To achieve objectives
To cope with uncertainty and change
To facilitate control
To help in coordination
To increase organizational effectiveness
To guide decision- making

4. STEPS INVOLVED IN PLANNING
IDENTIFICATION OF OPPORTUNITIES
ESTABLISHMENT OF OBJECTIVES
DEVELOPING PLANNING PREMISES
IDENTIFICATION OF ALTERNATIVES
EVALUATION OF ALTERNATIVES
SELECTION OF ALTERNATIVE
FORMULATING DERIVATIVE PLANS
ESTABLISHING SEQUENCE OF ACTIVITIES

5. ADVANTAGES AND LIMITATIONS
Helps in achieving objectives
Better utilization of resources
Economy in operation
Reduces uncertainty and risk
Improves competitive strength
Effective control
Coordination
Encourages motivation
Guides in decision making
Provides decentralization
Improves efficiency
Anticipation of crisis

6. Contd… Lack of accurate information Time and cost Inflexibility
Delay during emergency period
False sense of security

7. OBJECTIVES
Objectives are the aims, purpose or goals that an organization wants to achieve over varying periods of time.
Characteristics
Objectives have an hierarchy
Objectives form a network
Multiplicity of objectives
Objective have a time span
Objectives may be tangible or intangible
It must have social sanction

8. SETTING OBJECTIVE Guidelines for setting objectives
Cover the main feature of the job
Must be clearly specified in writing
It should be verifiable
It should clearly indicate the organizational mission
It should be challenging and reasonable
It should yield specific results when achieved
It should be coordinated with other units and managers
It should be periodically reviewed
It should clearly indicate the resources and authority

9. MANAGING BY OBJECTIVES (MBO)
It is a process whereby the superior and subordinate managers of an enterprise jointly identify its common goals, define each individuals major areas of responsibility in terms of result expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.

10. Features of MBO
Focuses attention on what must be accomplished and not how to accomplish the objectives. It is goal oriented rather than work-oriented approach.
To integrate the goals of an organization and individuals.
It tries to combine long and short range goals of organization.
It involves participation of subordinate managers in the goal setting process.

11. Contd…
A high degree of motivation and satisfaction is available to employees through MBO.
Periodic review of performance is an important feature of MBO.
It increases the capability of achieving goals at all levels.
MBO’s emphasis is not only on goals but also on effective performance.
It provides better guidelines for appropriate systems and procedure to achieve the objective.

12. Contd…
It has an evaluative mechanism by which the contribution of each individual can be measured.
It is not a set of rules, procedures or techniques; it is a particular way of thinking about management.

13. PROCESS OF MBO Setting preliminary objectives
It starts from top level management.
It states why the business is started and exists.
Short term objectives are framed taking into account the feasibility of achieving the long term objectives.
These are formed by viewing the internal and external environment of an organization.
It is subjected to modification.

14. Contd… Fixing key result areas
Identified based on objectives and planning premises.
Reference to measure the organizational health.
Arranged on priority basis.
Some KRA’s are profitability, market standing, innovation, productivity, market performance, public responsibility.

15. Contd… Setting subordinate objectives Recycling objectives
Objectives are achieved through individuals.
While setting objectives we should consider organizational goals, ability and resources available
Recycling objectives
Goal setting is a two way process.
It should be an interactive one.
Matching resources with objectives
Objectives should be carefully matched with available resources.
Allocation and movement of resources should be done in consultation with subordinates.

16. Contd… Periodic performance reviews Appraisal
Superior and subordinates should hold meetings to discuss the progress towards objectives.
Feedback from these reviews is provided to each individuals to facilitate self regulation and control.
Appraisal
Try to measure the performance of employees.
Purpose is to find the shortcomings to reach objectives and the way to rectify them.

17. BENEFITS OF MBO Improvement of managing Clarification of organization
Personnel satisfaction
Team work
Development of effective control
Fast decision making

18. WEAKNESS OF MBO Failure to teach the philosophy of MBO
Failure to give guidelines to goal setters
Difficulty of setting goals
Emphasis on short term goals
Danger of inflexibility
Time consuming
Increased paper work

19. STRATEGY
It is the determination of basic long term objectives and the adoption of the course of action and allocation of resources to achieve these goals.
Nature – SWOT, working towards goal, contingent plan, forward looking, flexible and dynamic, calculation of risk, formulated by top level management.

20. NEED AND IMPORTANCE Facing environmental challenges.
Long term guide to reach goal.
Effective utilization of resources.
Better coordination
Helps in maintaining the market share.

21. STRATEGIC PLANNING PROCESS
MISSION AND OBJECTIVES
ALTERNATIVES
ENVIRONMENTAL ANALYSIS
CORPORATE
ANALYSIS
STRATEGIC DECISION MAKING
IMPLEMENTATION
REVIEW AND CONTROL

22. KINDS OF STRATEGIES Growth Finance Organizational Personnel
Products / services
market

23. OPERATIONAL PLANNING Communication of strategies
Strategies should be communicated to all employees
It should be make sure that everyone involved in implementing strategies.
Developing and communicating planning premises
Managers must develop the planning premises critical to plans and decisions.
If managers do not select the premises and it has been implemented on personal assumptions then it lead to improper plans.

24. Contd… Developing appropriate operational plan
Action plans, operational programmes and decision that take place in various parts of an organization.
Managers should be clear in implementing the program and reviewing it.
Periodic review of strategy
Strategy should be reviewed periodically to find out whether the given strategy is relevant.
Major strategies should be reviewed at least once in a year

25. Contd… Developing contingency strategies and programmes
Uncertainty can occur at any time. The formulated strategies should be flexible to make changes.
It provide a degree of preparation for future.
Developing appropriate organization structure
For proper function a defined structure is needed.
It provides facilities for implementing strategy.

26. Contd… Continuing to emphasis planning and implementing strategy
Responsible person continue to stress the nature and importance of these elements.
It can be achieved by teaching the managers about the aim.
Setting proper organizational climate
It refers to the characteristics if internal environment such as the condition of cooperation, dedication of people to work

27. POLICY
It is a broad statement formulated to provide guidance in decision making.
Characteristics
Relationship to organizational objectives
Clarity of policy
To guide in decision making
It should be written
Communication of policies
Balance of policy

28. Contd… Need / importance To operationalise objectives
To save time and effort
To facilitate delegation of authority
To speed up decision making
To control administration

29. POLICY FORMULAITION PROCESS
DEFINITION OF POLICY AREA
DEFINITION OF POLICY ALTERNATIVES
EVALUATION OF POLICY ALTERNATIVES
CHOICE OF POLICY
COMMUNICATION OF POLICY
IMPLEMENTATION OF POLICY
REVIEW OF POLICY

30. DECISION MAKING
It is a process of choosing a course of action from among alternatives to achieve a desired goal.
Features
Selection process
Goal-oriented process
End process
Human and rational process
Dynamic process
Situational
Ongoing process

31. DECISION MAKING PROCESS
IDENTIFICATION OF PROBLEM
DIAGNOSIS AND ANALYSIS THE PROBLEM
SEARCH FOR ALTERNATIVES
EVALUATION OF ALTERNATIVES
SELECTING AN ALTERNATIVES
IMPLEMENTATION AND FOLLOW UP