planning in organizations
TRANSCRIPT
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2nd PresentationIBM
Planning in Organizations
Dr Ali Sajid
30-9-2010
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Management is like
writing in the snow.
You've got to keeprepeating the message
over and over.
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• Management's goal should be
to do everything in theirpower to help others be assuccessful as possible.
• Management succeeds onlywhen the rest of theorganization succeeds .
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Management's Task isnot to Control or
be a “Corporate Cheerleader” or “Crisis Handler” ; it is to
“Encourage Experimentation”,Create a
“Climate for Open Communication”,“Promote Constructive Dialogue”
& Give Employees
“License to Expose Failures” &“Promote Dissent”.
- Nick McGill and John Slocum, Organizational Dynamics
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For a manager to be
Perceived as aPositive Manager,
they need a four to onepositive to negative contactratio.
- Ken Blanchard
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Since managers are no
longer the guardians of the knowledge base, we
do not need the“Command-Control
Type Executive” .- Shoshana Zuboff
W d t thi k th t th g '
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We used to think that the manager's job was to know all the answers.
But the new manager ought to knowthe questions, to be concerned
about them and involve others infinding answers.
Today's manager needs to be more of a facilitator - someone skilled ineliciting Answers from others –
Sometimes from Peoplewho do not even know what they
know.• - J. Naisbitt & P.Aburden
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• The assets of most businesseswalk out of the door at the
end of each day.• The challenge tomanagement is to
“Create an environment whichwill Motivate them to want to
return the next day.- Lynn Yates, modified by Grant Bright
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Managers are peoplewho do things right;
leaders are peoplewho do the right thing.
- Warren Bennis
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The old style manager puts
the megaphoneto his or her mouth,
The new style manager puts
the megaphoneto his or her ear.
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People perform better formanagers, who are not
interested in production alone,but who
Express interest in theirEmployee's Welfare,
keep in touch with them,& are approachable.
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Maintain a
“Positive Attitude”
at work: Ask employees what theyenjoy about their work.
Too often, conversations center toomuch on mistakes and problems.
When you ask."What did you like about
that last project?"
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You encourageemployees to become
conscious of how to get
Satisfaction from work.And they may think of ways to
do theirJobs Better.
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Unfortunately,
some companies
worry more aboutBroken Machines
than they do
Broken People
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Half the harm
that isDone in this world is
due to People,who want to feel
important.- T.S. Eliot
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If you want to manage
somebody,manage yourself.
Do that well and you'llbe ready to stop
managing.And start leading.
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Every manager/
Leader should be aCEO:
Chief Empowerment Officer.
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Think about the Qualities of the“Best Managers”
you ever worked for.You'll find that most of them:
- Were approachable & easy to talk to
- Rarely became overexcited orflew off the handle- Didn't let a few problems poison theirwhole outlook took a friendly, pleasant,positive approach- Showed consideration for the feelingsof the people who worked for them
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There's no reason that work hasto be done with seriousness....Professionalism can be worn
lightly.
Fun is a stimulant to people.They enjoy their work moreand work moreProductively.
Herb Kelleher, CEO, Southwest Airlines
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Lead with yourheart (leadership.)
Guide with yourhead(management.)- Jim Cathcart
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• The main challenge for
information agecorporations is the
retraining of manager,not the retraining of
workers.- John Naisbitt
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The only realdisability in lifeis a:
“Bad Attitude”.
h h
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Where there is an
open mind,
there will alwaysbe a frontier
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“Good fortune iswhat happens whenopportunity meets
with Planning. ” Thomas Alva Edison
(1847 -1931 )
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When Planning for a year,“Plant Corn”.
When Planning for adecade, “Plant Trees”.
When “Planning for Life” “Train & Educate”
People.” Chinese Proverbs Quotes
Planning is bringing the future into the present so
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Planning is bringing the future into the present sothat you can do something about it now ”
Alam Lakein
“Let our advance worrying become advancethinking & planning ” Winston Churchill
“Productivity is never an accident. It is always the
result of a commitment to excellence, intelligentplanning , N focused effort .” Paul J. Meyer
“If anything is certain, it is that change is certain.The world we are planning for today will not existin this form tomorrow. ”
• Philip Crosby
“Failing to plan is planning to fail ” Proverb Quotes
h l f d
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• Without leaps of imagination, or dreaming, welose the excitement of possibilities. Dreaming,after all, is a form of planning .”
• Gloria Steinem
• “Good fortune is what happens whenopportunity meets with planning .”
• Thomas Elva Edison
• “Being busy does not always mean real work.The object of all work is production or accomplishment and to either of these ends
there must be forethought, system, planning ,intelligence, & honest purpose, as well as perspiration. Seeming to do is not doing.
• Thomas Elva Edison
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“Meekness: Uncommon patience in planning arevenge that is worth while. ”
Ambrose Bierce
“Success is blocked by concentrating on it andplanning for it... Success is shy - it won't comeout while you're watching. ”
Tenessee Williams
Leaders who are not planners are simply caretakers and gatekeepers." ~
Perry Smither
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• Planning ahead is a measure of class. Therich and even the middle class plan for future generations, but the poor can planahead only a few weeks or days. ”
Gloria Steinem
Good plans shape good decisions. That's whygood planning helps to make elusivedreams come true. ”
Anonymous
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• “Think ahead. Don't let day-to-day operationsdrive out Planning. ”
• Donald Rumsfeld
• “Strategic P lanning for the future is the mosthopeful indication of our increasing social
intelligence. ” • William Hastie
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• Create a definite plan for carrying out your desire and begin at once, whether you ready or not, to put
this plan into action .• ~ Napoleon Hill
• Bite off more than you can chew, then chew it.Plan more than you can do, then do it.
Anonymous
• Good plans shape good decisions. That's why goodplanning helps to make elusive dreams come
true. ” Anonymous
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Plans are only good intentions unless theyimmediately degenerate into hard work.
Peter Drucker (1909 - 2005)
When we are Planning for posterity, we oughtto remember that virtue is not hereditary ”
By; Thomas Paine
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It is a bad plan that admits of no modification. Publilius Syrus (~100 BC) , Maxims
“ No-one gets an iron-clad guarantee of success. Certainly, factors like opportunity,luck and timing are important. But the
backbone of success is usually found in old-fashioned, basic concepts like hard work,determination, good Planning &
perseverance. ” By: Mia Hamm
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• He who every morning plans the transactionof the day and follows out that plan, carries
a thread that will guide him through themaze of the most busy life. But where no plan is laid, where the disposal of time is
surrendered merely to the chance of incidence, chaos will soon reign.
Victor Hugo (1802 - 1885)
• Plans are only good intentions unless theyimmediately degenerate into hard work.
• Peter Drucker (1909 - 2005)
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•
Even the longest
journey beginswith a single step. –
• Chinese Proverb
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“Planning is
bringing future intopresent
so that you can do
somethingabout it now”
- Alan Lakein
f
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What many mgrs fail to
recognize is thatEffective Planning
is good investment &is less costly to org
than
No planning at all
Nature & Importance of Managerial Planning
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Nature & Importance of Managerial Planning
•All mgrs must plan.
• Planning is intellectual activity &Maj component of managerial task.
•Planning is “Futuristic Activity” directed toward anticipating, predicting,& dealing with change.
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Planning Functions.
A set of related steps bywhich mgt determine
„What is to be done &
„How it will be done ?
“ I i b hi h
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“ I t is process by which mgr
anticipate futuredevelopments &
identify courses of actionnecessary to achieveorganizational &
divisional objectives”
Planning
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Planning• Planning is always a staff function-mgrs does not recognize its importance.
• Hesitant to perform & seek out planning tasksbecause most silent aspect of
Planning is that it is “Iterative Process” .
• Check & recheck.
• Tedious process- & no one enjoys tedium.
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Focus of Planning• Planning focus on future, what is to be
accomplished and how?• Objectives for future &Appropriate means for achieving these objectives.
• Outcome of “Planning function is plan”
• “Plan - A written document that specifies courses of action firm will take”.
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Planning
• Process of Establishing Objectives &determining how best to achieve them.• Defining
– Orgl objectives or goals, – Establishing overall strategy for achievingthese goals &
– Developing a Comprehensive hierarchy of plan to integrate & coordinate activities.
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• Specific Benefits of Planning: – Coordinating efforts – Preparing for change – Developing performance standards – Developing managers
The Importance of Planning
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p g
Why is Planning SoImportant ?
Tocoordinate
efforts
To preparefor change
Todevelop
managers
To develop performance
standards
Considerations Required When
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qManagers Initiate Planning
ManagersMust:
Determine the priorityof objectives
Establish time framesfor objectives
Resolve conflictsamong objectives
Create measurementsfor objectives
Manager’s Means of Implementing Plans
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g p g
Manager sAuthority + Manager s
Persuasion + OrganizationalPolicies =
Implementationof Plans
I h t Ti F D Pl E i t ?
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In what Time Frame Do Plans Exists?
• Short-Range Plans, from a day to an year • Intermediate Range Plans , 1 to 3 years• Long Range Plans , 3 to 5 years, also
called: Strategic Plans ,• Plans differ from org to org
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PLANS ACCORDING TO EXTENT OF RECURRING USE
OrganizationalPlans
Single-UsePlans
StandingPlans
Programs
Projects
Budgets
Policies
Standard Operatingprocedures
Rules
Levels of Plans
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Levels of Plans Strategic Plans
Detailed action steps mapped out to reach strategic goals
Tactical Plans Means charted to support implementation of the
strategic plan & achievement of tactical goals
Operational Plans Means devised to support implementation of
tactical plans and achievement of operational goals.
Single Use Plans Aimed at achieving a specific goal that, once
reached, will most likely not recur in future.
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Program A comprehensive plan that coordinates a
complex set of activities related to a major non-
recurring goal that coordinates:
A set of limited Scope activities that need
to be divided into Several major projects in order to
reach a major nonrecurring goal.
Levels of Plans
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Levels of Plans Standing Plans: Pr ovides: Ongoing guidance for performing recurring
activities
Policy A general guide that specifies that broad parameters within which
organization members are expected to operate in pursuit of
organizational goals.
“Service ” A document specifying behaviors that will maintain “Good
Standard of Service , Employees urged to maintain positive eye contact,
use roper vocabulary with guests (e.g. ,“Good Morning,” “Certainly, „l”ll be happy to, “, “My pleasure”)
• Procedure A prescribed Series of related steps to be
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• Procedure A prescribed Series of related steps to be
taken under certain recurring circumstances.
• Well-established & formalized procedures -
called Standard Operating Procedures (SOPs ).
• Rule A statement that spells out specific actions
to be taken or not taken in a given situation
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Planning Process
Step 1-Setting Objectives
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Step 1-Setting Objectives• Setting Objectives: Addresses issue of what
one hopes to achieve.• May be set in performance area, i.e. P ersonnel
to be trained/recruited etc.
Important elements of Planning process.• Actions - means or specific activities planned to
achieve objectives.
• Resources -Constraints on Course of Actione.g. Total cost to be incurred in development of some products. –
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Step 2- Identifying & Assessing ConditionsAffecting Objectives
• Recognize imp variables that:Influence Objectives -
Purchasing Power of Customers &Actions of Competitors,
Enemy move etc.
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Additional Steps
4. Implementing Plan (organizing & leading)5. Monitoring Plans
Implementation(controlling)6. Evaluating plans Effectiveness
(controlling )
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By Duration
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By Duration
• Short-range Plans : Cover actions to be completed
over short time periods, & long-range plans cover longer time period.
• Long-range: Usually done at upper-mgt levels,while shot-range planning takes place chiefly onlower levels of organizational structure.
• Standing plans or repeat-use plans -usually long-range plans. Used over & over again to help guide
behavior of members of org.
By Function
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By Function
•Developed for key orgal functions: – Defense – Manufacturing
– Finance – Engineering – R&D
• Assist mgt in understanding interactions amongmajor areas of operations.
•Help in spotting Potential Conflicts & Problems &in dealin with them.
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How To Plan- (Action Planning Model)
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How To Plan (Action Planning Model)
• Action Planning Model: H as eight phases or steps.
– Objectives – Tasks
– Human resources
– Facilities & resources – Procedures for implementation
– Cost estimates
– Time schedule – Follow up & review
Objectives
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Objectives • First step - to identify purpose of Planning.
• Setting objectives in concrete form helps todetermine direction of plan.
• Good objective should be
– Achievable – Measurable – Operational-not abstract
Tasks
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Tasks
• After objective, determine tasks tobe done.
• What do you need to do to achievethese objective.
Human Resources
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Human Resources• Determine people, who should be involved in
furthering plan.
• Answer following questions,
– Who will authorize plan? – Who will have to coordinate in plan?
– Who will develop plan?
– Who will approve plan?
• This phase relates to manning of plan (who)
Facilities & Resources• Review other resources & facilities
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• Review other resources & facilitiesneeded for implementing plan.
• Resources will vary, depending onnature of project involved.List available resources for production
plan – Raw material – Fitting & supplies – Production equipment – Auxiliary equipment – Standby equipment – Handling equipment
– Packing materials
Procedures For Implementation
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Procedures For Implementation
• Determine methods to be employed
for putting plan into action- for Executing plan.
Actual implementation of plan & whatit will take to get plan moving.
Strong interrelationship among
different phases of planning process,objectives, resources & methods &means to be employed.
Cost Estimates
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Cost Estimates
• Determine cost estimates or budget of plan.
• Cost considerations are prime factors in all
plans.
• Should be utmost concern to getting job donemost efficiently, effectively & on time.
• Within budget & resources you have.
Time Schedule
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Time Schedule • Set up timetable for planned operations.
• Specific dates & deadlines.
• Drawn up for various phases of plan.
• Deadlines must be realistic
Follow-Up & Review
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Follow Up & Review
• Establish “Built -in Control Mechanisms”
for follow-up & control.
Ensure up to date info abt:
Status of Plan & Progress reports:
So that necessary adjustmentscan be made on time.
Barriers To Planning &
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What To Do About It?
• Most common barriersMgt ego & attitude
– Time& cost – Intellectual activity – Clarity of objectives – Inadequate information – Mgt philosophy & external forces
Mgt Ego & Attitude
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• Business failures & poor decisions arerarely result of too much planning.
• Mgt ego to say-
“I don t need plan, I amsure I can handle
whatever develops”
Time & Cost
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Basically a Tool toPreventive Action,Pay offs of “Good
Planning”are far
“Greater than Costs”.
Intellectual Activity
E i ll l i i b
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• Essentially mental activity but many mgrs are morecomfortable in Taking action than in
“Thinking Abt Problems” .
• Find it difficult to deal with “Abstractions” &
“Think conceptually” in terms of:“Models & Relationships among complex
variables in Hypothetical Situations .
Mgrs -subject to constant pressures & demands ontheir time to point that they do not have any timeleft for real, uninterrupted thinking, let alone
planning.
Clarity of Objectives
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Clarity of Objectives
• Obstacle to Better Planning is:
“Lack of clear obj” &“Sharp definition of problems”
toward which planning is being directed.
• Worse when:• “Problems & Obj• “Not only unclear, but also wrong” .
Inadequate Info
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• Having too Much, too Little, or Wrong
info can be barrier to“Planning Process” .
Getting right info,
in right amount at right time“Prerequisite”
for “Effective Planning”. Fundamental Roles mgrs assume is:
“Informational Role”.
Mgt- Philosophy & External Forces
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• Major determinant of “Effectiveness of Planning”
Process:Values, Philosophies &
Attitudes of Top mgttowards Planning Activity.
Mgrs should understand
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Mgrs should understand
“Orientations, Biases & ValueJudgments “Of Key Mgrs &
Executives”. • Enables them to Deal with
Potentialinterdepartmental conflicts.
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• While Attitudes of all
mgrs affect planning process,external forces are of equal
importance.Mgrs must seriously consider
Them in Planning.
Strategic PlanningS t ti f li d ff t f t
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• Systematic, formalized effort of org toestablish basic Orgl purposes,
objectives, policies & strategies toachieve obj & basic company process.
• It is actually process wherebycorporate obj for future are identifiedin response to perceived opportunities
& threats, whereby activities areselected & resources allocated to meet
these objectives.
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Recognize Causes of Managerial FailureManagerial failure in planning is caused by several factors.
• Failure to consider each of:“People whom mgr s plan will affect” .
• Failure to mgr to provide “alternativeoptions” in case original plan is not adopted.
• Failure of “Mgr to Anticipate Change” .
• Unwillingness of Mgr to “Take calculatedRisks” . Risk taking always associated with
planning, integral part of mgt.Contd…
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Recognize Causes of Managerial Failure
5. Mgr s failure to “Establish Priorities” .
6. Mgr s failure to make “Plans known to thoseinvolved” .
5. Failure to establish appropriate measurementswhen plan is prepared.
Ten Commandment for Effective Planning
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1. Review & incorporate policy guidelines into planning process.
2. Policy determination should precede planning.3. Marshall organizational resources – such as info,
people, capital, & equipment – specifically for planning.
4. Recognize budgeting as both “Planning & control process.
5. Consider time element in planning.6. Involve people, who are affected by plan in
planning process.
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Ten Commandment for Effective Planning
6. Define task assignments, delegations of authority &responsibilities for individuals for individuals involved.
7. Develop priorities among various plans put into actions.8. Be prepared to resolve conflicts arising during plan
implementation.9. Put plans in writing this p will improve planning itself, action.
Incorporate reasoning in every plan.10. Maintain plans through specific review & control processes.
Provide for appropriate monitoring & evaluation by settingdeadlines & making necessary changes.
Major Components of Planning
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Major Components of Planning
Goal. A future target or end result that an org whishes toachieve.
Plan the means devised for attempting to reach a goal.
Mission The org purpose or fundamental reason for existence
Mission Statement A broad declaration of the basic,unique purpose and scope of operations that distinguishthe org from others of its type.
The Overall Planning Process
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The Overall Planning Process
Mission Goals Plans
Goal Attainment
(organizationalEfficiency &Effectiveness)
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Mission
• An orgs mission statementcontains an outline of orgs
beliefs or general guidelinesthat it will use in pursuing its
mission, sometimes referred toas company creeds.
Effective Mission Statements
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Focus onMarkets Rather Than Products
Are
Motivating
AreSpecific
Are
Achievable
Effective
MissionStatements
How Often Plans Are To Be Reviewed &
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Revised?
• Depends on resources available• Degree of accuracy• Usually
– Longer time span of plan, longer period between reviews & revisions .
• Conversely, – More important plan is to org,s immediate
success, more closely it will be monitored.
Specific Vs Directional Plans
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Specific Vs. Directional Plans
• Plans that are clearly defined &leave no room for interpretation arespecific plans.
• Flexible plans that set out generalguidelines are directional plans.
Centralized Vs Decentralized Plans
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Centralized Vs Decentralized Plans• Centralized- done by a single group,
corporate planning. – Not usual for large orgs.
• Decentralized- used where each division or department is responsible for planning itsown operations, with little if any guidancefrom central planning unit.
– Common in large-scale orgs with multiple product line.
– Danger of overlaps even conflicts in planning
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Management by Objectives
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Management by Objectives (MBO) is a process through which
specific goals are set collaboratively for the organization as awhole and every unit and individual within it.
Goals- then used as a basis for planning, managing org
activities, & assessing and rewarding contributions.
MBO usually incorporates considerable participation among
managers and subordinates in setting goals at various levels.
Steps in the MBO
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1. Develop overall organizational goals
2. Establish specific goals for various dept,subunits, and individuals
3. Formulate action plans
4. Implement plans and maintain self-control
5. Review progress periodically
6. Appraise performance
Strengths and Weaknesses of MBO
STRENGTHS WEAKNESS
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1. Aids Coordination of goals and plans
1. Tends to falter without strong,continual commitment from topmanagement
2. Helps clarify prioritiesand expectations
1. Necessitates considerabletraining or managers
3. Facilitates vertical andhorizontalcommunication
3. Can be misused as a punitivedevice
4. Fosters employeesmotivation
4. May cause overemphasis of quantitative goals
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Strategic - Management
Includes Strategic -planning, implementation,
& control.
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Strategic- Planning
• It involves decisions made by topmanagement.
• Involves ultimate allocation of largeamounts of resources such as money, labor,or physical capacity.
• Has significant long term impact.• Focuses on orgs interaction with external
environment.
Strategic Planning
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Strategic Planning
• Strategic planning includesthose activities that involvesdefining an org”s mission,
setting its objectives, &developing strategies to enableit to operate successfully in its
environment.
Strategic Planning
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StrategicPlanning
Making decisions about thelong-term goals and
strategies of an organization
Strategic GoalsMajor targets or end results that relate to the long-
term survival, value, and growth of theorganization
StrategyA pattern of actions and resource allocations designed to achieve
the goals of the organization
The Budgeting ProcessManagement objectives for the organizations.
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Management objectives for the organizations.
Sales budget
• Forecast of quantities sold• Forecast of dollar income
Other income• Interest income
• Miscellaneous income LessProduction budget
•Units to be produced•Cost of materials•Direct labor costs
•Factory overhead
Marketing Budget•Promotion costs
•Selling expenses byterritories
Administrativeexpense budget
•For each operatingdepartment
Miscellaneousexpense budget
•Interest on loans•Other
Results in
Financial budget• Budgeted balance sheet
• Supporting budgets
Barriers To Goal Setting & Planning
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• Major Barriers
• Inappropriate Goals• Improper rewards system• Dynamic & complex
environment• Reluctance to establish
goals
• Resistance to change• constraints
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Barriers To Goal Setting & Planning
• Overcoming Barriers
Understanding purposesof goals & planning
• Communication &participation
• Consistency, revision &updating effectiverewards system
Potential Obstacles to Planning
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Several Potential obstacles threaten - ability of org to develop effective plans.
One barrier is a rapidly changing environment,- makes planning more difficult
because plans must be altered frequently.
View among some managers that planning is unnecessary.
Org can take several steps to reduce obstacles to planning. One step isconveying strong top mgt support for planning process.
Planning staff A small group of individuals who assist top level managers in
developing the various components of planning process.
Contingency planning is development of alternative plans for use in the event
that environmental condition evolve differently than anticipated, rendering
original plans unwise or unfeasible.
Efficiency of Plans• Its Contribution to “Purpose & Objectives
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• Its Contribution to “Purpose & Objectives,offset by costs & other factors required to
formulate & operate it”.
• Plans are efficient if they achieve their purposeat a reasonable cost, when cost is measured notonly in terms of time & money or production
but also in degree of individual or groupsatisfaction.
Issues in Planning
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Issues in Planning
1. Being aware of Opportunities2. Establishing Objectives3. Determining Alternative Courses
4. Evaluating Alternative Courses5. Selecting a Course6. Formulating Derivative Plans
7. Numberizing Plans By Budgeting