Planning & Organizing

Prof. Pratibha Singh

Topics To be Covered
• Concept of Planning.
• Significance of planning.
• Classification of planning.
• Process of Planning.
• Barriers to Effective Planning.
• MBO & MBE.
• Decision Making & strategies of Decision making.
• Steps In Decision-Making Process.
• Factors Influencing the Decision-Making Process.
• Organizing- Definition & Principles.
• Process of Organizing.
• Types of Organizational Structure- Centralization & Decentralization.
• Informal Organization
Planning

PLANNING INVOLVES DEFINING THE

ORGANIZATIONAL GOALS,
ESTABLISHING AN OVERALL
STRATEGY, AND DEVELOPING A
COMPREHENSIVE SET OF PLANS TO
INTEGRATE AND COORDINATE WORK
IN AN ORGANIZATION.
Importance Of Planning
1. Makes for purposeful and orderly activities
All efforts are pointed towards the desired results and an
effective sequence of efforts in accomplished unproductive
work is minimized.

2. Points out the need for fortune change.

Planning helps managers to visualize future possibilities and to
appraise key fields for possible participation.

3. Answers “What if” Question

Such answers permit the planner to see through a complexity
of variables that effect what action he or she decides to take
models can be built and computers used to process answers to
such questions.
4. Provides a Basic for control.
The twin of planning is controlling, which is performed to make sure the planning is
bringing about the results sought.

5. Encourages Achievement
The act of putting thoughts down on paper and evolving a plan provides the planner
with guidance and a desire to achieve. Planning reduces random activity, overlapping
efforts, and irrelevant actions.

6. Compels visualization of entirely

It enables the manager to see important relationships, gain a fuller understanding of
each activity and appreciate the basis upon which managerial actions are supported.

7. Increases and balances utilization of facilities

Activities are balanced both in amount and timing.
 Classification of Planning
Strategical Planning
 Decides the major goals &
policies of allocation of
resources to achieve the goals.
 Done by the higher level of
management.
 It is a long-term process &
generally based on forecasting
technology, political
environment etc.
 It is less detailed because it is
not involved with the day-to-day
operations of the organization.
Tactical Planning
 Decides the detailed use of
resources for achieving each
goal.
 Done at a lower level of
management.
 It is a short-term process &
is done on the basis of the
past performance of the
organization, less certain.
 It is more detailed because it
is involved in the day to day  It’s essential to record each team
operations of the
organization.
Operational Planning
 It is a method a department or
team uses to take the company’s
strategic plan and turn it into a
detailed map broken up into
various components.
 This plan is made with a focus on
the future to outline budget
allocations, departmental
activities, and targets for the next
year to three years.
member’s responsibilities for the
fiscal year in detail.
 Establishing Verifiable Goals
or Set of Goals to be Achieved
Establishing Planning
Premises
Process Deciding the Planning Period
Of Finding Alternative Courses of
Planning Action
Evaluating & Selecting a
Course of Action
Developing Derivative Plans
Measuring & Controlling the
progress
 Done by the Upper management
 Internal & External factors.
 Tangible & intangible factors.
 Controllable & non-controllable factors.
 Lead time in development &
commercialization of new product
 Time required to recover capital investments
or the pay back period.
 To search for and examine alternative
courses of action.
 To evaluate them in the light of the premises
and goals and to select the best course of
action.
 Broad goals must be translated into day to day
operations of the organization.
 Middle & lower-level managers must draw up
the app. Plans, programs and budgets for the
sub units.
 Managers need o check the progress of their plan
so that they can take-
a) Remedial actions necessary to make the plan.
b) Change the original plan if it is unrealistic.
Barriers of Effective Planning
1. Top Management Support
There is a need for top management to support the planning efforts of
those lower down Planning starts at the top and it is communicated
downwards. This makes therefore top managerial support a
prerequisite.

2. Managers should realize the Limitations of Planning

Planning is not a perfect solution to all problems and there is a need
for managers to understand the shortcomings of planning.

3. Efforts must be made to include everybody

For planning to succeed, there is a need for every organizational
member’s participation. This is necessary at both the formulation and
implementation stages so as to minimize resistance.
4. Plans should be communicated to all concerned
Everyone should have information about planning objectives,
targets, etc.

5. Plans should be in accordance with Environmental

Trends
Plans should be adaptable to environmental changes as the
organization is a sub-system of the environment.

6. Contingency Plans should be formulated

The organization must have contingency plans i.e. what to do
if things do not go according to plan.
MBO- Management By Objective
• MBO is a strategic approach to enhance the
performance of an organization. It is a process
where the goals of the organization are defined
and conveyed by the management to the
members of the organization with the intention
to achieve each objective.

• MBO is a process in which a manager and an

employee agree on specific performance goals
and then develop a plan to reach them. It is
designed to align objectives throughout an
organization and boost employee participation
and commitment.
 1. Define organization The objectives set by the superiors
STEPS IN MBO goals. should be achievable.

The managers can start working

2. Define employee with their subordinates on
objectives. establishing their personal
objectives.

3. Continuous monitoring It is essential for monitoring the

performance and progress. performance and progress of each
employee in the organization.

The performance review is

4. Performance evaluation. achieved by the participation of
the managers concerned.

Continuous feedback on the results

and objectives, as it enables the
5. Providing feedback. employees to track and make
corrections to their actions.

Performance reviews are routine

6. Performance appraisal. reviews of the success of employees
within MBO organizations.
 Benefits of Management by Objectives
• Management by objectives helps employees appreciate their on-the-job roles and responsibilities.

• The Key Result Areas (KRAs) planned are specific to each employee, depending on their interest,
educational qualification, and specialization.

• The MBO approach usually results in better teamwork and communication.

• It provides the employees with a clear understanding of what is expected of them. The supervisors
set goals for every member of the team, and every employee is provided with a list of unique tasks.

• Every employee is assigned unique goals. Hence, each employee feels indispensable to the
organization and eventually develops a sense of loyalty to the organization.

• Managers help ensure that subordinates’ goals are related to the objectives of the organization.
MBE- Management By Exception
Management by exception (MBE) is a style of business
management that focuses on identifying and handling
cases that deviate from the norm, recommended as
best practice by the project management method.

“Management by exception is a business management

strategy that states that managers and supervisors
should examine, investigate and develop solutions for
only those issues where there is a deviation from set
standards, norms, business practices, or any other
financial goals like profits deviation, quality issues,
infrastructure issues, etc. instead of examining and
dealing with each routine business activities”
 Process of MBE
Setting Assessing the performance
Analysing the Solving the
objectives or and comparing it with the
deviation exception
norms norm.

The norm should be The most crucial part of the It then becomes an
something easily process is monitoring the  Find no significant
issue for the
quantifiable and relevant data sets and assessing deviation
responsible
achievable. whether the actual performance  Find a significant deviation
management to
matches with the norms. deal with the
deviation and to
respond
appropriately
 Principles of MBE

1. A systematic approach.

2. A comprehensive
organizational policy.

3. A good understanding of
exceptions.

4. A proper delegation of
authority.

5. Continuous development of
subordinates.
Decision Making -Introduction
Decision-making is a soft skill that involves
choosing between possible solutions to a
problem.
The person making a decision follows a step-
by-step process, including collecting
information, weighing pros and cons, and
reviewing alternative solutions.

Reasoned process- Programmed Decision.

Intuitive process- Non Programmed decision.
Strategies in Decision Making
1. Analytical decision-making
The analytical decision-making strategy uses logic, data, and facts to make a rational
decision.
This strategy is an excellent choice if you have access to all the information you need to
assess a situation accurately.

2. Command decision-making
Command decision-making strategy makes a choice without listening to input from
other people.
This approach can be useful in urgent or time-sensitive situations since it is the fastest
and most direct form of decision-making.
3. Collaborative Decision-Making
The approach involves getting input from multiple people.
Groups or teams work together to discuss a situation and develop a potential solution.
This strategy can help you ensure your team members feel like you value their opinions.

4. Expertise Decision-Making
The Experts in a certain industry, career, or subject matter may choose to use the
expertise decision-making strategy.

5. Consensus-based Decision-Making
To ensure everyone on your team is aligned about a decision, use the consensus-based
decision-making strategy.
It may take longer than many other strategies, as it can promote a sense of unity and
teamwork.
6. Random Choice Decision-Making
This decision-making is one of the simplest strategies available. When used
appropriately, this approach can save you time and help you make effective decisions.

7. Vote Decision-Making
Using the vote decision-making strategy allows you to make your decision based on
what the majority of people want.
This can be a great method for gathering direct input from a large group of people
without spending an extensive amount of time in discussion.

8. Single-feature Decision-Making
The single-feature decision-making strategy can be an effective method to make quick
decisions about simple topics. To use this approach, identify the most important
feature your decision needs to include.
9. Delegation Decision-Making
This strategy is a great option if you need input from someone who is well-informed on the
topic.
It gives the decision-making responsibilities to someone else, such as a consultant, expert, or
someone on your team that is more knowledgeable about the subject.

10. Additive Feature Decision-Making

This strategy accounts for all the most important features before systematically evaluating
each option. This approach can help you make challenging decisions.

11. Elimination by Aspects Decision-Making

This strategy works well when you have multiple options to choose from.
Starting with the most important feature, evaluate each option one by one. Then
systematically eliminate each option that doesn't meet the criteria you've set in place until you
have just one choice left.
12. Availability Heuristic Decision-Making
This strategy can help leaders make effective decisions in ambiguous situations.
This method can help you determine how likely something is by comparing your
current situation to a similar event from the past.
 Steps in Rational Decision-Making Process
 Recognizing Developing Measuring and Decision
Diagnosing Comparing Implementation
Problems Alternative
the problem consequences and Follow Up
 Deciding Priorities Solutions

1. When there is a 1.Every problem In every 1. Compare the quality 1. Efforts should be
deviation from past should be correctly course of and Acceptability of made to secure
experience. diagnosed. action, various solutions. employee’s
2. When there is a 2. Identify symptoms alternatives 2. The solution must be acceptance of the
deviation from the of the problem, which exist. determined by decision.
plan. mislead the DM. taking into account 2. In case of
3. When other people the tangible and resistance, steps
bring problems to intangible should be taken to
the manager. consequences win cooperation.
4. When Competitors
3. Otherwise even the
outperform the
best decisions are
manager’s
not accepted by
organization.
the employees.
 Factors Affecting the Decision-Making Process

Certainty

•Decisions are made under Risk

conditions of certainty when the
manager has enough information
to know the outcome of the
decision before it is made.
•The manager knows the available
alternatives as well as
conditions and consequences of
those actions.
•There is little ambiguity and hence
the relatively low possibility of
making a bad decision.
Uncertainty
•Most managerial decisions
•Decisions are made under
are made under conditions of
uncertainty when the
risk.
probabilities of the results are
•Decisions are taken at risk unknown.
when the manager has some •There is no awareness of all
the
information leading to the the alternatives and also the
outcomes, even for the known
decision but does not know
alternatives.
everything and is unsure or
unaware of the consequences.
Psychological Bias & Decision Support System
PSYCHOLOGICAL BIAS
DECISION SUPPORT SYSTEM
 Also Known as Cognitive bias.
 A decision support system (DSS) is an
information system that aids a business
 Cognitive bias is a systematic error in
in decision-making activities that require
thinking, affecting how we process
judgment, determination, and a sequence
information, perceive others, and make
of actions.
decisions.
 The information system assists the mid-
 It can lead to irrational thoughts or
and high-level management of an
judgments and is often based on our
organization by analyzing huge volumes
perceptions, memories, or individual and
of unstructured data and accumulating
societal beliefs.
information that can help to solve
problems and help in decision-making.
 Biases are unconscious and automatic
processes designed to make decision-
 A DSS is either human-powered,
making quicker and more efficient.
automated, or a combination of both.
Five frogs are sitting on a log, two decided to jump off.
How many are left?

Answer- 5, deciding is different from doing.

ORGANIZING- Introduction
Organizing is a managerial activity that involves arranging
and structuring of responsibilities and work of the
employees for attaining the desired result.

It manages different resources, such as human, financial,

physical, and information resources, to create value for the
firm and achieve its goals.

It involves clarifying jobs, working relationships, and

policies, and coordinating and integrating resources into a
unified whole.

It also requires establishing an organizational structure

that allows for the efficient execution of tasks.
Principles of Organizing
1. Objectives
2. Specialization
3. Span of Control
4. Exception
5. Scalar Principle
6. Unity of Command
7. Delegation
8. Responsibility
9. Authority
10. Efficiency
11. Simplicity
12. Flexibility
13. Balance
14. Unity of Direction
15. Personal Ability
16. Acceptability
 Types of Organizational Structure
CENTRALISATION

Decision Making It Implies:

Centre(authority base) 1. Distance from top to bottom.
1 2. Extended Communication lines
3. Impersonality
4. Narrow span of control
2
5. Centralization
Organization
Levels
3

Tall Structure
Features of Centralization
What is centralization?
Centralization is a process
where the power of making
an all-important decision
related to all the activities
taking place in an
organization is either in the
hands of an individual or a
central location.
FEATURES
1. Top management is an important part of
an organization.
2. Authority to make a decision is in the
hand of top management only.
3. Information flows from the upper level to
the lower levels.
4. Longer time to make decisions.
5. Centralization is suitable for a small
organization.
6. Inflexible in nature.
DECENTRALISATION

This implies:

1 1. High level of decentralization.

2. Extremely wide spans of control
2 are determined on the basis of
each superior’s interpersonal
3 skills.
3. Less extended communication
lines.

Flat Organization
Features of Decentralization

Decentralization is referred to FEATURES

as a form of an organizational
structure where there is a 1.Delegation of authority to lower
delegation of authority by the management.
top management to the middle
and lower levels of management 2. Faster response time.
in an organization.
3. Quick decision-making.

4. Development of individual departments.

5. Employee engagement and development

Informal Organization
Informal organizations are
social structures that
provide direction for how
people work together in the
workplace or other
environments. Informal
organizations represent the
cluster of personal and
professional connections and
norms that give structure to
how teams complete projects
and tasks and build
relationships at work.
FEATURES
•Formal policies and procedures do not play a role in
their creation.
•It emerges from social interactions between people. The
ranks and functions of people have no relevance here.
•People generally tend to interact more with those with
whom they can relate.
•It exists in each and every enterprise. This is because
social interactions between people are inevitable.
•Managers cannot prohibit informal organizations,they
can only regulate them.