PLANNING Module 2

CONTENTS
Planning: Definition and Importance of Planning, Process of Planning, Limitations
of
Planning, Features of Sound Planning, Features and process of decision making
PLANNING - MEANING
 Planning is the primary function of the management
 Planning bridges the gap from where we are to where you want to go
 Planning is deciding in advance:
a. What to do?
b. How to do?
c. When to do?
d. Who is to do it? &
e. What is the cost?
DEFINITION
 According to Philip Kotler: “ planning is deciding in present what
to do in future. It is the process whereby companies reconcile
their resources with their objectives & opportunities.”.
 George R. Terry, “ planning is the selecting & relating of facts &
making & using of assumptions regarding the future in the
visualization & formulation of proposed activities believed
necessary to achieve results.
 In the, absence of planning, there will be disorder, confusion,
inefficiency, wastage of human efforts & material resource
 Planning establishes coordinated effort.
 Planning reduces uncertainty by forcing managers to look ahead,
anticipate change, consider the impact of change, & develop
appropriate responses.
FEATURES
1. Primary function
2. Pervasive function
3. Intellectual & realistic process
4. Objectives-oriented
5. Continuous function
6. Flexibility
7. Raises accuracy, economy &
efficiency
8. Link between past, present &
future
9. Brings unity of purpose & action
10. Future oriented:
IMPORTANCE OF PLANNING
1. Uniform decision making
2. Performance standards
3. Handles change
4. Solution to problems
5. Ensures stability
6. Removal of wastages
7. Unity of purpose
8. Survive & progress
PLANNING PROCESS
SWOT ANALYSIS
https://bstrategyhub.com/nestle-swot-analysis-2019-swot-analysis-of-nestle/
https://bstrategyhub.com/tesla-swot-analysis/
FEATURES OF SOUND
PLANNING
A good plan should have the following essentials:
1. It should be simple and clear.
2. It should be easily understandable to the followers.
3. It should be prepared on the basis of clearly defined objectives.
4. It should cover all aspects that are needed for the fulfillment of the
objectives.
5. It should be flexible to changing situations.
6. It should be as economical as possible.
7. It should be adaptable.
8. It should provide standards for the evaluation of actual performance.
9. It should provide a basis for decentralization of its various activities.
10. It should guide decision-making.
LIMITATIONS OF PLANNING
1. 1. Creates rigidity
(i) Internal inflexibility: Policies, Procedures, Rules, etc.
(ii) External inflexibility: PESTIN Factors
2. Does not work in a dynamic environment
3. Reduces creativity
4. Involves huge costs
5. Time consuming process
6. Planning does not Guarantee success
 DECISION MAKING
 Rational or sound decision making is taken as primary function of
management.
 A decision can be defined as a course of action purposely chosen from a
set of alternatives to achieve organizational or managerial objectives or
goals. 
 Intellectual minds are involved in the process of decision making, it
requires solid scientific knowledge coupled with skills and experience in
addition to mental maturity.
No decision comes as end in itself, since in may evolve new problems to
solve. When one problem is solved another arises and so on, such that
decision making process, as said earlier, is a continuous and dynamic.
According to McFarland “A decision is an act of choice where in an
executive forms a conclusion about what must be done in a given
situation. A decision represents behavior ‘chosen from a number of
possible alternatives.”
Henry Sisk and Cliffton Williams defined “A decision is the
election of a course of action from two or more alternatives; the
decision making process is a sequence of steps leading to a
selection.”
George R.Terry: "Decision-making is the selection, based on some
criteria from two or more possible alternatives. “
IMPORTANCE

1. Proper utilization of resources

2. Selecting the alternative
3. Evaluation of the managerial performance
4. Employees motivation
5. Indispensable element/component
6. Achievement of goal/ objectives
7.Pervasive functions
PROCESS OF DECISION
MAKING
STEPS IN DECISION MAKING
ORGANISING Module 2 Part 1
CONTENTS
Organizing - Definition, nature and significance, Process of organisation, Principles
of
organisation, Formal and Informal organisation - features, advantages and
disadvantages,
Centralisation and decentralisation – factors, merits and demerits, Departmentation
and
Delegation.
ORGANIZING MEANING
 Organizing is a process of defining the essential relationships among
people, task and activities in such a way that all the organization’ resources
are integrated and coordinated to accomplish its objectives efficiently and
effectively.”
Organising is a set of relationships that defines vertical and horizontal
relationships amongst people who perform various tasks and duties.
 The organizational task is divided into departments, people are assigned
specific tasks and their relationship is defined in a way that maximises
organisational welfare and individual goals.
 Organisation structure specifies division of work and shows how different
functions or activities are linked
It includes:
(i) Identification of work,
(ii) Grouping of work into smaller groups,
(iii) Assigning work to every individual at every level in every department,
(iv) Defining its authority and responsibility, and
(v) Establishing relationships amongst people to make them contribute
towards organisational goals in an integrated manner.

In simple term, organi­sation is the process by which the chief executive, as a

leader, groups his men in order to get the work done.
G. E. Milward:
“Organisation is the harmonious inter-relation of functions and staff.”
Mooney and Reiley:
“Organisation is the form of every human association for the attainment of
common purpose.”
Louis A. Allen:
“Organisation is the process of identifying and grouping the works to be
performed, defining and delegating responsibility and authority and
establishing relation­ship for the purpose of enabling people to work more
effectively together in accomplishing objectives.”
NATURE
1. Process: Defining, arranging and grouping, establishing authority responsibility
relationships.
2. Structure: The organisation structure consists of a series of relationships at all
levels of authority
3. Dividing & Grouping: Grouping the activities, delegating according to division of
labour and specialization.
4. Accomplishment of Goals and Objectives:
5. Authority responsibility relationships
6. Human and Material aspects
PROCE
SS
IMPORTANCE
PRINCIPLES OF ORGANISING
FORMAL & INFORMAL
ORGANISATION
Chester I Bernard defines formal organization as -"a system of consciously
coordinated activities or forces of two or more persons. It refers to the
structure of well-defined jobs, each bearing a definite measure of authority,
responsibility and accountability."
The essence of formal organization is conscious common purpose and comes
into being when persons–
1. Are able to communicate with each other
2. Are willing to act and
3. Share a purpose.
CHARACTERISTICS OF
FORMAL ORGANIZATION
1. Laid by top management
2. Prescribes relationships
3. Accomplishes common objectives
4. Focus on jobs to be performed
5. Bound by rules, regulation and authority
6. A,A& R are clearly defined
7. Structure based on division of labour and specialization
8. Non sentimental
Advantages Disadvantages
1. Responsibility can be fixed 1. Non Sentimental
2. Ensures law and order 2. Less or no focus on Individuals
3. Coordination 3. Rigidity
INFORMAL ORGANISATION
Informal organisation refers to the relationship between people in the
organisation based on personal attitudes, emotions, prejudices, likes, dislikes
etc. an informal organisation is an organisation which is not established by
any formal authority, but arises from the personal and social relations of the
people.
 These groups may be based on same taste, language, culture or some other
factor. These groups are not pre-planned, but they develop automatically
within the organisation according to its environment.
CHARACTERISTICS
1. Unplanned & Spontaneous
2. Arises from personal and social relation
3. Natural process
4. Not reflected in organizational chart
5. Cutting across formal channels of communication
6. Voluntary membership
7. overlapping membership
BENEFITS
Benefits Drawbacks
1. Blends with formal organization 1. Might undermine formal authority
2. Helps in fulfillment of complex tasks 2. Gives rise to rumor mills
3. Increase in managers awareness
3. No well defined tasks
4. Achievement in sense of security and
belonging 4. Might lead to groupism
5. influence on productivity & job 5. Possibility of gang war
satisfaction
6. communication becomes faster
7. psychological satisfaction
CENTRALIZATION &
DECENTRALIZATION
 Changes in technology, customer expectations, and workforce expectations
make the decision making more important than ever.
 Generally, companies choose between two main types of management
structures: centralized management and decentralized management —
although they may opt for a combination of the two. 
 Right answers may depend on skills, capability of leaders and market
situations.
DECENTRALIZATION
 The key idea behind a decentralized approach is giving authority and
responsibility to those who know best — since they’re closer to stakeholders
and have relevant information available to them.
 Organizations with a decentralized structure allow upper management to
focus more on growth opportunities and major decisions, rather than day-to-
day duties. 
 Decentralization in an organization involves spreading power,
accountability, and responsibility to various management levels.
DECENTRALIZED
ADVANTAGES
1. Senior managers can concentrate on important decisions whilst delegating less important
decisions to people down the organisational structure
2. Decision making is a form of empowerment. Empowerment can increase motivation and
consequently staff output.
3. People lower down the chain have a greater understanding of the environment they work
in and the people (customers and colleagues) that they interact with. This knowledge,
skills and experience may enable employees to make more effective decisions than
senior managers.
4. Empowerment will enable departments and their employees to respond faster to change.
The empowerment provided by decentralised organisations may grants employees the
opportunity to make a success of their responsibilities. Although it may take longer for
senior managers not directly involved with departments to respond to market changes.
5. Organizations are self sufficient
6. scaling is easier
7. fast decision making
8. happier team and business owners
9. strengthen decision making skills
DISADVANTAGES
1. Poor leadership can damage a company’s reputation
2. Communication barriers
3. Difficulty collaborating
4. Expensive teams
5. Service functions can waste resources
CENTRALISATION
 A centralized model, on the other hand, is when a small handful of individuals
make the majority of decisions for a company.
 Centralization in any organization has the flow of communication designed
upright, so as the middle and lower management has to strictly follow the
directions of the senior management.
 Since authority, power is influenced by senior management. The decision-making
process is time-consuming and slower.
CENTRALIZATION
ADVANTAGES
CENTRALIZATION V/S
DECENTRALIZATION
DEPARTMENTATION
“Departmentation is the process of grouping activities into units for purposes of
administration.” —William H. Newman
“Departmentation is not an end in itself but it is simply a method of arranging
activities to facilitate the accomplishment of enterprise objectives.” —Koontz and
O’Donnell
A department,” according to Haimann, “is a distinct area of activities over which a
manager has been given authority and for which he has accepted responsibility.”
BASES OF DEPARTMENTATION
1. function
2. product or services
3. customer
4. location
5. time
6. process
7. combination
DELEGATION
 If you're good at your job, people will want much more than this from you.
This can lead to a real sense of pressure and work overload: you can't do
everything that everyone wants, and this can leave you stressed, unhappy, and
feeling that you're letting people down.
Delegation allows you to make the best use of your time and skills, and it
helps other people in the team grow and develop to reach their full potential
in the organization.
Delegation is a win-win when done appropriately, however, that does not
mean that you can delegate just anything. 
To determine when delegation is most appropriate there are five key questions you need to ask
yourself:
1. Is there someone else who has (or can be given) the necessary information or expertise to
complete the task? Essentially is this a task that someone else can do, or is it critical that you do it
yourself?
2. Does the task provide an opportunity to grow and develop another person's skills?
3. Is this a task that will recur, in a similar form, in the future?
4. Do you have enough time to delegate the job effectively? Time must be available for adequate
training, for questions and answers, for opportunities to check progress, and for rework if that is
necessary.
5. Is this a task that I should delegate? Tasks critical for long-term success (for example,
recruiting the right people for your team) genuinely do need your attention.
To whom should you delegate:
1. The experience, knowledge and skills of the individual as they apply to the
delegated task.
2. The individual's preferred work style.
3. The current workload of this person.