Unit 4: Planning (5 Hrs.

)
The foundations of planning; The
definition of planning; Purposes of
planning; Types of plans; Contingency
factors on planning; Objectives: The
foundation for planning; Multiplicity of
objectives; Real versus stated
objectives; Traditional objective
setting; Management by objectives
 PLANNING
Planning Involves,
choosing of one of the
various alternatives
available for
accomplishing the
desired result

Choosing alternative
must ENSURE:

– Greatest economy
– Certainty through the
process of looking ahead.

It Sketches a complete
picture of thing to happen
in future in the enterprise.
• Planning is a process of deciding
future course of action regarding
what to do, how to do, when to do,
who will to do, to attain the
organizational goals and so on.
• It is one of the management
functions concerning for setting
organizational goals and actions to
achieve them.
• Planning sets the future goals of
organization and selects the course
of actions to attain the goals
effectively and efficiently.
• It is intellectual process in which
managers formulate and select on
best course of action ensuring the
effective and efficient functions.
• Planning represents the vision,
wisdom and foresightedness of
managers.
• In conclusion planning is a process of
determining organizational goals,
objectives and course of actions to be
followed in future.
 Meaning & definition
• Planning is the
primary function of
corporate
management .
• It is the bridge
between the present
& future.
• Planning helps in the
motivation &
provides a frame
works for decision
making .
• It also provides
standards for control
of performance of
overall corporations .
 Characteristics of planning
• Primary function
• Goal oriented
• Future oriented
• Flexible
• Intellectual process
• Action-oriented
• Continuous process
• Pervasive in nature
• Efficiency focused
 Types of plan
• On the basis of
managerial hierarchy
and authority
1. Corporate plan
2. Department plan
3. Operational plan

• On the basis of
Frequency of using
the plan
1. Single use plan
2. Standing plans
• On the basis of flexibility
1. Flexible plans
2. Specific plans

• On the basis of time horizon

1. Long term plan
2. Medium term plan
3. Short term plan
 Activity
• What is planning? Explain the various types of
plan.
• As a manager of an IT company what are the
requisites that is required for a successful plan
that you should make.
 Hierarchy of planning
• A certain type of hierarchy is formed in
planning. It flows down from higher level to
lower level.
• The important outputs of planning system
are inter-linked in a hierarchy.
• Higher level plans are represented by
mission, goals, strategies and policies.
 Mission: (A mission statement is a short statement of
why an organization exists, what its overall goal is,
identifying the goal of its operations: what kind of
product or service it provides, its primary customers
or market, and its geographical region of operation.)

 Goals ( Goal is what organization wants to achieve in

the future)

 Strategy ( Strategy is a comprehensive master plan to

achieve a desired aspects in order to success. It helps
to maximize the competitive advantage and minimize
the competitive disadvantage.)

 Policy ( Policy is the guideline for decision making )

 Contd..
 Procedure (A procedure is a series of steps, taken
together, to achieve a desired result. It is a particular way
of accomplishing something as in a repetitive approach,
process or cycle to accomplish an end result.)

 Rules ( Rule is an accepted principle or instruction that

states the way things are or should be done)

 Programs (A program is a list of instructions that tell a

computer what to do).

 Budget (A budget is a plan showing the company's

objectives and how management intends to acquire and
use resources to attain those objectives).
Planning in the Hierarchy of
Organizations

7–12
 Planning process
• Establishes goals
• Identifying the planning premises
• Identifying alternatives
• Evaluating the alternatives
• Selecting the best alternatives
 Importance of planning
• Uncertainty reduction
• Goals focus
• Better coordination
• Increases efficiency
• Environmental adoption
• Basis for control
• Avoid random activity
• Increase commitments
 Contingency factors on planning
• Managers level in the organization
– Strategic plans at higher levels
– Operational plans at lower levels
• Degree of environment uncertainty
– Stable environment: specific plans
– Dynamic environment: specific but flexible plans
• Length of future commitments
– Current plans affecting future commitments must be
sufficiently long-term to meet those commitments.
 Objectives:
The foundation for planning
 Contd..
• Managers start planning by stating or
formulating organizational objectives.
• Only when they have clear view of
organizational objectives when they
appropriately carry out subsequent planning
efforts.
Objectives
• Objectives define strategies or implementation steps
to attain the identified goals.
• Unlike goals, objectives are specific, measurable, and
have a defined completion date.
• They are more specific and outline the “who, what,
when, where, and how” of reaching the goals.
• Organizational objectives are the targets toward which
the open management system (input, process and
output) is directed.
• It reflects the purpose of the organization.
 Contd..
 Objectives are:
• Narrow in scope
• Specific steps
• Associated with a schedule and time frame
• The means to the end result
• Easy to measure
• Short term or medium term

 Examples of objectives include:

• I will speak at five conferences in the next year
• I will read one book about sales strategy every month
• I will work with a coach to practice my networking skills by
the end of this month
Examples of statement of
organizational purpose
 Multiplicity of objectives
• Organization pursue multifarious objective. At every level in
the hierarchy, goals are likely to be multiple.
• This objective can be broken down into a group of objective
for the product, advertising, research, promotion managers.
• The number of objectives assigned to a manager depends on
how much would be performed by himself and how much
would he be delegating to the subordinates and then would
supervise and control.
• Most organizations simultaneously follow multiple goals,
rather than focus on a single, well-defined objective.
• For example, manufacturing firms often concurrently strive to
decrease costs, increase revenues, and enhance margins.
 Real vs. stated objectives
• Real Goal - A real goal
is the one adopted and
actively pursued by
the organization.
• Stated Goal - A stated
goal is one that is
communicated to
stakeholders but is not
actually pursued by
the organization.
• Stated goals serve
more to affect the
image or perception of
the organization by
third-parties.
 Traditional objective setting
• Traditional goal-setting is a method of setting goals that has
been used for a long time. In this approach, an organization
or an individual sets a goal they want to accomplish
without defining specific, measurable, and achievable
objectives or key results.
• In traditional goal setting, goals set by top managers flow
down through the organization and become sub goals for
each organizational area.
• This traditional perspective assumes that top managers
know what’s best because they see the “big picture”. And
the goals passed down to each succeeding level guide
individual employees as they work to achieve those
assigned goals.
 The Downside of
Traditional Goal Setting

7–25
 MBO
• Management by Objectives, or MBO is a concept expressed by
Peter Drucker more than 50 years ago.
• This strategy for managing people, which focuses on managing
teams based on their ability to complete individual and team goals,
has been used in larger organizations since its inception.
• Small to midsize organizations, however, can also benefit from
adopting this strategy
• MBO is a collaborative process whereby the Leader and team
members can jointly determine objectives for each team members.
• MBO begins when the Team Leader explains the goals for his group.
The team members take the goals and propose objective for his /
her particular job.
• In case of any modification of individual’s objectives, it is
accomplished through negotiation since the Team Leader has
resources to help the team member commit to the achievement of
the objective.
• Thus, a set of verifiable objectives for each team member are
jointly determined, prioritized and formalized.
MBO contd..
 Examples of MBO
Sales
• Decrease the sales cycle from four to two months
• Increase the average sales to $10,000
• Bring in 15 new customers during a specific time period
Marketing
• Increase social media likes by 40%
• Increase time spent on the website by five minutes
• Generate 500 new leads per month
• Get five media placements
Customer Service
• Decrease call time to under five minutes
• Increase customer satisfaction by 30%
• Reduce manager call intervention by 10%
Human Resources
• Improve retention rate by 15%
• Implement a leadership training program for remarkable employees
• Increase employee satisfaction by 30%
 MBO
Key Points:
– MBO is a process
– Jointly determine objectives
– Negotiation between superior and subordinate
– Objectives are measurable
– Objectives are prioritized
Activity