planning
DESCRIPTION
PlanningTRANSCRIPT
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Unit-2: Planning
Nature, importance and purpose of planning process Objectives, Types of plans (Meaning only), Decision making, Importance of planning, steps in planning, Planning premises, Hierarchy of plans
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Planning is the process of analyzing the situation, determining the objectives that will be influence in the future and deciding in advance, the actions that will be taken to achieve.
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Where we are Where we want to
be
Planning
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Planning is deciding in advance what to do, how to do it, when to do it and who to do it.
It involves anticipating the future and consciously choosing the future course of action.
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Planning is most basic function of management.
Planning referred as “deciding in advance”.
“Planning is the function that determines in advance what should be done.”
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• Planning is purposeful : it is objective oriented. It is directed towards efficiency.
• Planning is a primary function : It is the basic level of management process.
• Universal process : Many people believe in planning. It is the job of all the managers in all types of organizations.
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• Intellectual process : A process involving imagination, foresight and knowledge but not guesswork.
• Continuous process : An on-going/dynamic exercise as old assumptions change, old plans are revised or new ones are prepared.
• Forward process : No plan can be prepared without knowledge of future.
• Involves choice : Decision making is core of planning
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Focuses attention on objectives and result Reduces uncertainty and risk Provides sense of direction Encourages innovation and creativity Guides decision-making Provide efficiency in operation Provide economy in operation Effective Control Bridge between present and future
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Analyzing opportunities
Reviewing theplans
Establishingobjectives
Determining Planning premises
Identification of alternatives
Evaluation of alternatives
Choice of Alternative plans
Formulating of Supporting plans
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Not a step of Planning, It is pre-step of planning.
Essential to make a successful plan.
SWOT analysis
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Strengths
Weaknesses
Opportunities
Threats
2. SWOT Analysis
SWOT stands for:
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Strengths - the positive internal attributes of the organisation
Weaknesses - the negative internal attributes of the organisation
2. SWOT Analysis
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Opportunities - external factors which could improve the organisation’s prospects
Threats - external factors which could undermine the organisation’s prospects
2. SWOT Analysis
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Example: Vehicle Company M
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High oil price High material price Foreign exchange Other competitive companiesPolitical interference
Huge market in China/IndiaMore global cooperation
Poor reputation among customers Slow decision making Old fashioned style Weaker brand images
Accumulated high technology Motivated young staff Global network to distributeCost efficiency manufacture
Threat Opportunity
WeaknessStrength
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• First and real starting point of planning.First and real starting point of planning.
• Management has to define objectives in clear manner by Management has to define objectives in clear manner by considering organizational resources and opportunities because considering organizational resources and opportunities because aa minor mistake in setting objectives might affect in minor mistake in setting objectives might affect in implementation of plan.implementation of plan.
• Objectives must be specific, clear and practical.Objectives must be specific, clear and practical.
• Objectives should be time boundObjectives should be time bound
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Premises are the assumptions about the future in which the planning is implemented.
They provide environment and boundaries for the implementation of plan in practical operation.
There are 3 types of planning premises Internal and external premises Tangible and intangible Controllable and uncontrollable
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Internal premises with in the organization ( Policies, investment, availability of equipments, funds etc)
External premises means out side the organization (Govt policies, Economic conditions, population , demand)
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Tangible premises are the measurable premises like population, investment, demand etc.
Intangible premises are those which cannot be measured like business environment, economic conditions etc
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Controllable premises like technical man power , input technology, financial investment etc
Uncontrollable premises like strikes, change of govt policies, wars etc.
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It is essential to identify all the possible hidden alternatives.
There must be search for the best alternative. The management must develop alternatives through the support of experienced and intellectual experts in management sectors.
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Evaluate the alternatives from their expected cost and benefits. This is the logical step to evaluate each alternative from its plus and minus points.
Each alternative is studied and evaluated in terms of some common factors such as risk, responsibility, planning premises, resources, technology etc.
Selecting a course of actionSelecting a course of action
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It is essential to formulate action of supportive plan for each step of work and to all departments of the organization.
These action plans involve formulation of policies, rules, schedule and budget to complete defined objectives. Thus, formulation of supportive plans is an essential step in planning process.
It is difficult to implement main plan without formulation of derivative plan.
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Without this step, other this procedure of plan will remain as paper work.
This step brings all the procedure of plan into action. For implementation plan, management has to take some steps
such as to communicate with subordinates who initiate to plan into action; provide necessary instruction and guidance; make arrangement of all resources like materials, machines, money, equipments etc; make timely supervision and control over subordinates.
Reviewing the planning processReviewing the planning process
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Establish objectives Develop Strategies
Determination of premises
Determination of alternatives
Evaluation of alternatives
Selecting a course of action
Formulation of derivative plans
Implantation of plans
Reviewing the planning process
How does a manager Plan?Planning Process:
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Resource: what can be used to meet the scope.
Time: what tasks are to be undertaken and when.
Quality: the spread or deviation allowed from a desired standard.
Risk: defines in advance what may happen to drive the plan off course, and what will be done to recover the situation.
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Managers engage in planning to:
Set the standards to facilitate control
Provide direction
Minimize uncertainty
Reduce the impact of change
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Strategic plan Tactical plan Single use plan Standing plan Long Range plan Short Range plan Proactive Plan Reactive Plan
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It consists of major task and policies of an organization resources and facilities to accomplish the objectives
Used by community groups, government departments, organizations and businesses to develop blueprint for action and change
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Benefits of Strategic Planning
• Defines mission, vision & values
• Establishes realistic objectives
• Ensures effective use of resources
• Provides base to measure progress
• Develops future direction• Solves major problems
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◦ Mission
Core purpose of your organization
Presented in a clear, short statement that focuses on attention in one clear direction by stating purpose of the group’s uniqueness.
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Vision
◦ What is your organization’s vision of excellence
◦ Has to be realistic and not something impractical
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Values
◦ What are the principles, standards, and actions considered worthwhile in the organization
◦ Includes how people treat each other, how groups conduct business and what is most important to the organization
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Its a short time planning
Tactical plan are immediate decisions based on the executive’s judgment and experience in facing an actual situation
It consists of use of facilities and resources
It is day-to-day operation and activities of the organization
At lower level management
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Standing Plans◦ Developed for activities
that occur regularly over a period of time
Ex: ◦ Objectives, Policies,
Procedures, Rules
Single Use plans◦ Developed to carry out a
course of action that is not likely to be repeated in future
Ex: ◦ Schedules, Projects,
Budgets
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Long range plan Point of distinction
Short range plan
Covers many years & affects many departments of an organization
Meaning Covers less than one year and is more specific & detail
5 yrs or more Time 2 to 5 Years
Organizations linkage with external factors
Primary focus Linkage with various parts of an organization
Mission ,long term objectives and strategies
Deals with Current operations of organization
Top management Prepared by Lower level executives
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Proactive Planning:◦ Managers challenge the future, anticipating future and get
ready with alternative routes for unseen circumstances
Reactive Planning:◦ Organizations react to events as and when they arise
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Objectives Budgets Policies Rules
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End results to be achieved
They give direction to activities
Require creative thinking
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Used as both- planning and control device
May be expressed in units of finance etc
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It provides the framework with in which decisions must be made by the management in different area’s of organization.
Policy is general guideline for decision making
Policies are often made with out any study or analysis.
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Rules are related to policies as they guide action. Rules are detailed and recorded instruction that a
specific action must or must not be done under the given instance.
Rule is different from policy, since it does not give guide to thinking
Eg: Procedure for handling mail may require a rule “all letters received should be replied to on the same day”
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Access to network resource will be granted
through a unique user ID and password
Passwords should include one numeric
and one special char
Passwords will be 8
characters long
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It must contribute to accomplish purpose and objectives
It must be considered as parent exercise in all processes
It must spread through all management functions
It must be efficient in such a manner to achieve the designed objectives at the least cost.
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Decision making is the process of choosing among alternatives
Decision making is part of all the functions of the management
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1. Individual and collective decision2. Minor and major decision3. Strategic and routine decision4. Simple and complex decision5. Temporary and permanent decision
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If the decisions are taken by a single person they are called individual decisions.
If the decisions are taken by a committee or group of people they are called collective decisions
Individual decisions are taken where the problem is of routine nature
Interdepartmental decisions are generally taken by a group
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Minor decisions are those decisions relate to day to day and periodical occurrences like purchase of stationery, permission etc.
Major decisions are those decisions generally taken by top management like purchasing of new machinery, employing new technology, hiring new people.
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Strategic is similar to major decision like price increase, discounts etc.
Routine is similar to minor decision like day-to-day operations of an organization
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Simple decision is one that is related to a problem with few number of variables
When there are many variables the decision making will be complex
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Temporary decisions are to be taken depending on situation till the solution is found , generally taken by shop managers
Permanent decisions are taken as on permanent basis
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Decisions in the Management Functions
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Identifying the Problem
Selecting the Best Alternatives
Analyzing the Alternatives
Following UpDetermining Alternative
Courses of Action
Implementingthe Decision
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The Decision-Making Process
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ProblemIdentification
“My salespeople
need new computers”
Identification of Decision Criteria
PriceWeightWarrantyScreen typeReliabilityScreen size
Allocation ofWeights to
Criteria
Reliability 10Screen size 8Warranty 5Weight 5Price 4Screen type 3
Development of Alternatives
AcerCompaqGatewayHPMicromediaNECSonyToshiba
Implementationof an Alternative
GatewayEvaluationof Decision
Effectiveness
Analysis ofAlternatives
R S W W P SAcer 4 3 4 3 2 6Compaq 3 4 5 2 6 7Gateway 9 6 7 7 8 2HP 3 5 6 7 6 5Micromedia 2 2 3 4 5 4NEC 3 4 5 6 7 2Sony 7 5 6 4 2 8Toshiba 3 4 5 6 7 3
Selection of anAlternative
AcerCompaqGateway HPMicromediaNECSonyToshiba
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1. Incomplete information2. Opposition by subordinates3. Improper communication4. Wrong timing5. Government policies6. External influence7. Lack of support
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Purpose or Mission
Procedures
Strategies
Policies: Major or Minor
Rules
Objectives
Programs: Major or minor and supporting
Budgets: numberized programs
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Example
Planning for ”Going to Goa this Cristmas”Major Steps :
Hotel Booking Ticket Booking Reaching Goa Staying and enjoying there Coming Back
Minor Steps : Take a taxi to reach station / airport Have dinner on beach Take photos