1.2.

1 Planning process, Characteristics of a sound plan, Management by Objectives (MBO), Policies

and strategies(CO3)

CO3: To analyze different alternatives while taking strategic decisions for organizational growth.

Reading Material:

1. Title: "Strategic Planning for Success: Aligning People, Performance, and Payoffs" Author: Roger
Kaufman Link: PDF

2. Title: "Management by Objectives" Author: Peter Drucker Link: PDF

Relevant PPT/Notes:

1. Title: "Planning Process and Management by Objectives" Description: This presentation covers
the planning process, characteristics of a sound plan, management by objectives (MBO), and
policies and strategies. Link: PPT

1.2.1 Planning Process:

The planning process refers to the series of steps undertaken by an organization to set objectives,
identify actions, and allocate resources in order to achieve its goals. The planning process typically
involves the following steps:

1. Establishing objectives: The first step is to define clear and specific objectives that the
organization aims to achieve. These objectives should be aligned with the overall mission and
vision of the organization.

2. Analyzing the environment: Organizations need to analyze the internal and external
environment to identify opportunities, threats, strengths, and weaknesses. This analysis helps in
understanding the current state of the organization and the factors that may impact its success.

3. Formulating strategies: Based on the analysis, strategies are developed to achieve the
objectives. Strategies are high-level plans that outline the approach and actions required to
accomplish the desired outcomes.

4. Developing action plans: Action plans are created to outline the specific steps, tasks, and
timelines required to implement the strategies. These plans include details such as
responsibilities, resources needed, and milestones to track progress.

5. Allocating resources: Organizations need to allocate appropriate resources such as finances,

human capital, and technology to support the implementation of the action plans. Resource
allocation should be aligned with the priorities and needs identified during the planning process.

6. Implementing the plans: This step involves putting the action plans into practice. It requires
effective coordination, communication, and monitoring to ensure that activities are carried out
as intended.
 7. Evaluating and adjusting: Continuous evaluation is crucial to assess the effectiveness of the plans
and make necessary adjustments. Organizations should regularly review progress, measure
performance, gather feedback, and make improvements to optimize outcomes.

Characteristics of a Sound Plan:

A sound plan possesses several key characteristics that contribute to its effectiveness. These
characteristics include:

1. Clear objectives: A sound plan should have well-defined and specific objectives that are aligned
with the organization's mission and vision. Clear objectives provide direction and purpose for
the plan.

2. Feasibility: A plan should be realistic and achievable within the available resources and
constraints. It should consider factors such as time, budget, and capabilities to ensure its
feasibility.

3. Flexibility: Plans should have the ability to adapt and respond to changes in the internal and
external environment. Flexibility allows organizations to adjust their strategies and actions when
faced with unexpected circumstances.

4. Coherence: A sound plan should be consistent and coherent, with all elements working together
towards the achievement of objectives. Each component of the plan should be aligned and
supportive of the overall goals.

5. Clarity and communication: Plans should be clearly articulated and easily understood by all
stakeholders. Effective communication of the plan ensures that everyone is on the same page
and can contribute to its implementation.

Management by Objectives (MBO):

Management by Objectives (MBO) is a goal-setting and performance management approach that

involves collaboration between managers and employees to define goals, set objectives, and monitor
progress. The key features of MBO include:

1. Goal alignment: MBO aims to align individual goals with the overall objectives of the
organization. This ensures that every employee's efforts are directed towards achieving the
desired outcomes.

2. Participatory goal setting: In MBO, managers and employees jointly set goals that are specific,
measurable, achievable, relevant, and time-bound (SMART). This participatory process increases
employee engagement and ownership of the goals.

3. Performance monitoring: MBO emphasizes regular monitoring and feedback on progress

towards objectives. Managers and employees periodically review performance, track
milestones, and make adjustments as necessary.

4. Performance appraisal: MBO often involves performance appraisals based on the achievement
of objectives. The evaluation focuses on the results and outcomes rather than solely on activities
or behaviors.
Policies and Strategies:

Policies and strategies are essential components of organizational planning. They provide guidance and
direction for decision-making and actions. Here are their key characteristics:

1. Policies: Policies are guidelines or principles that define the boundaries and expectations for
decision-making within an organization. They serve as a framework to ensure consistency,
fairness, and compliance with laws and regulations.

2. Strategies: Strategies are the high-level plans and approaches adopted by organizations to
achieve their long-term goals. Strategies outline the key actions, resource allocation, and
competitive positioning required to succeed in the marketplace.

Strategies are typically formulated based on the organization's analysis of its internal and external
environment, including factors such as market conditions, competition, and customer needs. They
provide a roadmap for the organization's future direction and guide the allocation of resources to
achieve desired outcomes.

Overall, effective planning involves a systematic process, sound plan characteristics, the implementation
of management by objectives (MBO), and the development of clear policies and strategies to guide
organizational decision-making and actions.

Relevant Book Readings:

1. Title: "Strategic Planning: A Practical Guide for Competitive Success" Author: Michael Allison and
Jude Kaye Link: Amazon

2. Title: "Policies and Strategies for Sustainable Development" Author: Victor T. King Link: PDF

Relevant Videos:

1. Title: "The Power of Planning" Description: This video explores the importance of the planning
process and its impact on organizational success. Link: YouTube

2. Title: "Management by Objectives Explained" Description: This video explains the concept of
management by objectives (MBO) and how it can be implemented in organizations. Link:
YouTube

TEXTBOOKS

T1 Stephen Robbins (Author), Timothy Judge (Author), 2019, Essentials of Organizational

Behavior, 14 Edition, , Pearson Education, India, ISBN: 978-0134523859

T2 George, J. and Jones, G.R. 2109. Understanding and Managing Organization Behaviour.
5thEdition,Pearson Education, India, ISBN:9788131724965.

Reference Books:

R1 Parsad L.M., 2019 . Principles and Practices of Management, 10 th Edition, S. Chand

Publication, India, ISBN: 978-93-5161-181-3
R2 Aswathappa, A. 2019. Organizational Behaviour – Text Cases and Games,
13thEdition,Himalayan Publishing House, India. ISBN: 978935990887.

R3 Luthans Fred, Organisational Behaviour, 12 th Edition, McGraw Hill Book Co, New Delhi.