MANAGEMENT CONCEPTS APPLICATION UNIT 2 PLANNING OBJECTIVES TYPES

MANAGEMENT CONCEPTS & APPLICATION UNIT 2 PLANNING: OBJECTIVES & TYPES OF PLANS, Planning Process

PLANNING? Encompasses defining • The organizations objectives or goals • Establishing the overall strategy for achieving those goals • Developing Comprehensive hierarchy of plans to integrate and coordinate activities It is concerned, then, • With Ends (What is to be done) • With Means ( How is it to be done) • In Terms of FORMAL or INFORMAL

DEFINITIONS OF PLANNING “Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses” URWICK “Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur”. KOONTZ & O’ DONNEL

PLAN It is a commitment to a particular course of action believed necessary to achieve specific results.

PLANNING It is an activity. It can be considered as consisting of a process, hence various sub activities.

NATURE OF PLANNING RATIONAL APPROACH OPEN SYSTEM APPROACH PERVASIVENESS of PLANNING

Rational Approach • Defined for where one stands & where one wants to go in future & how to reach there. • Includes choice of appropriate means to achieve the stated objectives • It tries to bridge the gap between the current and the desired status.

Open System Approach It indicates that identification of the gap between the current and the desired status in future and the action required to fill the gap is influenced by the environmental factors(PESTLE)

OBJECTIVES OF PLANNING Set Standards to Facilitate Control Minimize Waste & Redundancy MANAGERS PLAN TO Reduce Impact of Change Provide Directions

CRITICISMS OF FORMAL PLANNING CREATES RIGIDITY PLANS CAN’T BE DEVELOPED FOR DYNAMIC ORGANIZATIONS FORMAL PLANS CANT REPLACE INTUTION & CREATIVITY FORMAL PLANNING DOES NOT FOCUS ON TOMORROWS SURVIVAL

CLASSIFICATION OF PLANS BREADTH (SRATEGIC VS TACTICAL) TIME FRAME (LONG TERM VS SHORT TERM) SPECIFICITY (DIRECTIONAL VS SPECIFIC) FREQUENCY OF USE (SINGLE USE VS STANDING)

PLANS ON THE BASIS OF BREADTH STRATEGIC TACTICAL • PLANS THAT ARE ORGANIZATION WIDE • ESTABLISH OVERALL OBJECTIVES • POSITION AN ORGANIZATION IN TERMS OF ITS ENVIRONMENT • PLANS THAT SPECIFY THE DETAILS OF HOW AN ORGANIZATION’S OVERALL OBJECTIVES ARE TO BE ACHIEVED

PLANS ON THE BASIS OF TIME FRAME SHORT TERM LONG TERM COVER LESS THAN ONE YEAR PLANS THAT COVER MORE THAN ONE YEAR

PLANS ON THE BASIS OF SPECIFICITY SPECIFIC DIRECTIONAL PLANS THAT HAVE CLEARLY DEFINED OBJECTIVES AND LEAVE NO ROOM FOR MISINTERPRETATION FLEXIBLE PLANS THAT SET OUT GENERAL GUIDELINES

PLANS ON THE BASIS OF FREQUENCY OF USE SINGLE USE STANDING PLANS USED TO MEET THE NEEDS OF A PARTICULAR OR UNIQUE SITUATIONS PLAN THAT IS ONGOING & PROVIDES GUIDANCE FOR REPEATEDLY PERFORMED ACTIONS IN THE ORGANIZATIONS

TYPES OF PLANNING CORPORATE VS FUNCTIONAL STRATEGIC VS OPERATIONAL LONG TERM VS SHORT TERM PROACTIVE VS REACTIVE

MANAGEMENT BY OBJECTIVES (MBO) A SYSTEM IN WHICH SPECIFIC PERFORMANCE OBJECTIVES ARE JOINTLY DETERMINED BY SUBORDINATES AND THEIR SUPERVISORS, PROGRESS TOWARD OBJECTIVES IS PERIODICALLY REVIEWED, AND REWARDS ARE ALLOCATED ON THE BASIS OF THAT PROGRESS

ELEMENTS OF MBO GOAL SPECIFICITY PARTICIPATIVE DECISION EXPLICIT TIME PERIOD PERFORMANCE FEEDBACK

OBJECTIVES should be defined at ALL LEVELS Over All DIVISIONAL DEPARTMENTAL INDIVIDUAL

OBJECTIVES SHOULD BE S PECIFIC M EASURABLE A TTAINABLE R EALISTIC T IMEBOUND

Conclusions of MBO • Keeping persons ability and acceptance of goals constant : • More difficult the goals higher the performance • Specific & difficult to achieve goals produce higher level of output than generalised goals • MBO increases the employee effectiveness & performance & organizational productivity.

PROCESS OF PLANNING BEING AWARE OF THE OPPORTUNITIES SETTING THE GOALS OR OBJECTIVES CONSIDERING PLANNING PREMISES IDENTIFYING ALTERNATIVES COMPARING ALTERNATIVES IN LIGHT OF GOALS CHOOSING AN ALTERNATIVE FORMULATING SUPPORTING PLANS QUANTIFYING PLANS BY MAKING BUDGETS

BEING AWARE OF DUTIES THE MARKET COMPETITION IN LIGHT OF WHAT CUSTOMERS WANT STRENGTHS WEAKNESS

FORMULATING SUPPORTING PLANS BUY EQUIPMENTS BUY MATERIALS HIRE & TRAIN WORKERS DEVELOP A NEW PRODUCT

QUANTIFYING PLANS BY MAKING BUDGETS • VOLUME & PRICE OF SALES • OPERATING EXPENSES NECESSARY FOR PLANS • EXPENDITURES FOR CAPITAL EQUIPMENT