Planning

Planning 1

PLANNING...

Planning

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CONTENTS

Role of planning

Need of planning

Types of planning

Levels of planning

Corporate planning

Long term planning

Decision making

Creative problem solving

Planning 4

Palak Sood

Roll No. : 67References: Principles of Management

Koontz H. and O’Donnel Principles of Management

Prasad L.M. The Principles of Management

Rustom S. Davar

Planning 5

PLANNING

The process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the goals.

ROLE OF PLANNING

Planning 7

CHARACTERTICS

Primacy

Continuity

Flexibility

Unity

Precision

Pervasiveness

Planning 8

ELEMENTS

Mission

Objectives

Strategies

Policies

Procedures

Programmes

Budgets

Planning 9

TYPES OF GOALS

Mission goals

Strategic goals

Tactical goals

Operational goals

Planning 10

CHARACTERSTIS OF A GOOD PLAN

Objectivity Logic Simplici

ty

Futurity Flexibility

Stability

Comprehensiveness

Economy

Planning 11

STEPS IN PLANNINGIdentifying alternative courses of action and selection of best

Formulating supporting plans

Follow- up

Planning 12

Palak Sood

Roll No. : 67References: Principles of Management

Koontz H. and O’Donnel Principles of Management

Prasad L.M. The Principles of Management

Rustom S. Davar

Planning 13

Swathi Velisetty

Roll No. : 113References: Principles of Management

Koontz H. and O’Donnel The Practice of Management

Drucker P.F. The Fundamentals of Top Management

Ralph C. Davis

NEED FOR PLANNING

Planning 15

BENEFITS

Focus on objectives

Orderliness

Participation and involvement

Dynamism

Effective and faster achievements

Competitive edge

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BENEFITS

Unity of purpose, direction and effort

Minimizes costs

Better utilization of resources

Basis for control

Delegation and decentralization easier

Fixation of responsibility

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LIMITATIONS

Difficulty of accurate premising

Problems or rapid changes

Expensive and time consuming

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LIMITATIONS

Internal inflexibilities

• Psychology inflexibility• Policy and procedural inflexibility• Expensive with respect to capital investment

External inflexibilities

• Political climate• Labour union• Technological change

TYPES OF PLANNING

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TYPES OF PLANNING

Strategic

TacticalCorporate

Planning 21

TYPES OF PLANNING

Organization

Project

Team Worker

Clients

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CLASSIFICATION OF PLANS

Basic

StandingMaster

LEVELS OF PLANNING

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LEVELS OF PLANNING

Strategy implementati

on

Goal setting

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Functional level

Business

levels

Corporate

level

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FIVE LEVELSVision planning

Release roadmap planning

Release planning

Iteration planning

Daily planning

Planning 27

Swathi Velisetty

Roll No. : 113References: Principles of Management

Koontz H. and O’Donnel The Practice of Management

Drucker P.F. The Fundamentals of Top Management

Ralph C. Davis

Planning 28

Siddhi Shah

Roll No. : 101References: Principles of Management

Koontz H. and O’Donnel Principles of Management

Stoner & Freeman

CORPORATE PLANNING

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CORPORATE PLANNING…

Provides a basis of control

Accomplish goals with efficiency and

certainty

Anticipate technology changes

Helps to minimize costs

Helps to acquire a competitive edge

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Characteristics

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CORPORATE OBJECTIVES

Corporate Objectives Overall objective is financial ‘Long Term’ and ‘Short Term’ Most generally, they answer the questions:

Where do we want to be ?

When do we expect to be there?

Forecasting Short-term forecasting Long-term forecasting

Planning 33

COMPONENTS OF CORPORATE PLANNING

What is a Corporate Plan? Quite Similar to a Marketing Plan More ‘contextual’ in nature than other plans Includes plans for disposition of other internal

resources of the organization

Main components of a Corporate Plan Market Position vis-à-vis Customer’s

perception The position the company ‘plans’ to be in 4Ps are the vehicle to reach the destination

SHORT TERM FORECASTING

About Short Term Forecasting• A schedule covering the plan • Overall - Sales & financial growth oriented • Has a limited horizon & demonstrates continuity

Steps / Techniques• Eye-Balling (Data, Charts & Reports)

• Relies on judgment and experience of the

manager/leader

• Exponential Smoothing• Produces data for each period using mathematical tools

LONG TERM FORECASTING

About Long Term Forecasting• A more qualitative plan• Focus on Strategic aspects (not tactical ones)• Has a broad horizon & focus on long term growth

Steps / Techniques• Identify the important variables• Brainstorm to find the possible outcomes • Link these together in a series of alternative scenarios • Refine these scenarios

CORPORATE MISSION

About Corporate Mission• Provides context for Corporate objectives • Defines exactly what an organization is & what it does• Not too wide (meaningless) nor too narrow (lack development)

Key Characteristics• Customer groups to be served• Customer needs to be met• Technologies to be utilized

CORPORATE VISION

About Corporate Vision • Most crucial aspect to long term success • Vital for top leadership to develop intricately• Equally important to create a sense of mission

Key aspects• Powerful and relevant• Inspiring and exciting• Focused and forward-moving

Planning 38

Siddhi Shah

Roll No. : 101References: Principles of Management

Koontz H. and O’Donnel Principles of Management

Stoner & Freeman

Planning 39

Mayank Sanghai

Roll No. : 87References: Principles of Management

Koontz H. and O’Donnel The fundamentals of top management

Ralph C. Davis

LONG RANGE PLANNING

LONG RANGE PLANNING

•LRP has seen growing popularity in recent history•Led by post-1945 boom in business theory•Resulted as the forecasting horizon expanded

Background

•Powerful and relevant•Inspiring and exciting•Focused and forward-moving

Key features

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AREAS OF LONG RANGE PLANNING

New product selection and development

Marketing channels and Strategiess

Facilities, particularly Major Capital Facilities

Cash

People and Organisation

Planning 43

FORECASTING AND BUDGETING

•predicting future •based upon certain general assumptions may or may not be explicit•typically that all other things are equal •without any special action

Forecasting

•the organization believes is specifically achievable•budget is a target •budget becomes management's commitment

Budgeting

PROACTIVE MANAGEMENT

Experiences with Long Range Planning (LRP) show unpredictable changes can be very disorienting

Discontinuities (fractures) in environment that largely determine the long-term future

Must be handled, as opportunities, as positively as possible – Successfully shown by great companies such as IBM, GE & Google

Anticipating uncertainties & working proactively is a measure for good Long Range Planning

UNCERTAINTY

•Identify these uncertainties & •Manage their impact on the organization

Dealing with

uncertainty involves

•Risks•Structural uncertainties•Unknowables

Main types of

Uncertainty

Planning 46

SCENARIO PLANNING

Scenario planning for ordinary uncertainties

Basic Methodology

Quick response system to unknowable uncertainties

Planning 47

Mayank Sanghai

Roll No. : 87References: Principles of Management

Koontz H. and O’Donnel The fundamentals of top management

Ralph C. Davis

Planning 48

Shreyash Shah

Roll No. : 93References: www.mindtools.com www.accel-team.com Planning –A Global perspective

Weihrich & Koontz

DECISION MAKING

Planning 50

DECISION MAKING MODEL

Frame

Decide

Communicate

Implement

Evaluate

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MULTIVOTING

Description

When to Use

Keeping the End in Mind

• Option 1• Option 2• Option 3• Option 4• Option 5

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GUIDELINES FOR CONDUCTING THE MULTIVOTING ACTIVITY

1. Brainstorm a list of options.

2. Review the list from the Brainstorming activity.

3. Participants vote for the ideas that are worthy of further discussion.

4. Identify items for next round of voting.

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GUIDELINES FOR CONDUCTING THE MULTIVOTING ACTIVITY

5. Vote again.

6. Repeat steps 4 and 5.

7. Discuss remaining ideas.

8. Proceed with appropriate actions.

Planning 54

PARETO ANALYSIS

A formal technique for finding the changes that

will give the biggest benefits

Pareto principle - the idea that by doing 20% of

work you can generate 80% of the advantage

of doing the entire job

Particularly useful where many possible

courses of action

Planning 55

PARETO ANALYSIS

The 80/20 rule can be applied to almost anything: 80% of customer complaints arise from 20% of

your products or services. 80% of delays in schedule arise from 20% of

the possible causes of the delays. 20% of your products or services account for

80% of your profit. 20% of your sales-force produces 80% of your

company revenues. 20% of a systems defects cause 80% of its

problems.

Planning 56

THE PROCEDURE…PARETO ANALYSIS

Seven steps to identifying the important causes using Pareto Analysis :

1. Form a table listing the causes and their frequency as a percentage.

2. Arrange the rows in the decreasing order of importance of the causes, i.e. the most important cause first.

3. Add a cumulative percentage column to the table.

Planning 57

THE PROCEDURE…PARETO ANALYSIS

4. Plot with causes on x-axis and cumulative percentage on y-axis.

5. Join the above points to form a curve.

6. Plot (on the same graph) a bar graph with causes on x-axis and percent frequency on y-axis.

7. Draw a line at 80% on y-axis parallel to x-axis. Then drop the line at the point of intersection with the curve on x-axis. This point on the x-axis separates the important causes on the left and less important causes on the right.

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PARETO ANALYSIS…AN EXAMPLE

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PAIRED COMPARISON ANALYSIS

Paired Comparison Analysis helps you to

work out the importance of a number of

options relative to each other

Helps you to set priorities where there

are conflicting demands on your

resources

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PAIRED COMPARISON ANALYSIS

Follow these steps to use the technique List the options you will compare

For each comparison, you will decide which of the two options is most important

Assign a score to show how much more important it is 0 (no difference) to 3 (major difference)

Consolidate the results

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PAIRED COMPARISON ANALYSIS…AN EXAMPLE

A = 3 (37.5%) B = 1 (12.5%) C = 4 (50%) D = 0

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GRID ANALYSIS

Also known as Decision Matrix analysis, Pugh Matrix analysis or MAUT which stands for Multi-Attribute Utility Theory

Most effective where you have a number of good alternatives and many factors to take into account

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GRID ANALYSIS

To use the tool, lay out your options as rows on a table

Set up the columns to show your factors Allocate weights to show the importance

of each of these factors Score each choice for each factor using

numbers from 0 (poor) to 3 (very good) Multiply each score by the weight of the

factor, to show its contribution to the overall selection

Finally add up the total scores for each option. Select the highest scoring option

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GRID ANALYSIS…AN EXAMPLE

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DECISION TREE ANALYSIS

Tool for helping to choose between several courses of action

Provides a highly effective structure within which you can lay out options and investigate the possible outcomes of choosing those options

Forms a balanced picture of the risks and rewards associated with each possible course of action

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DECISION TREE ANALYSIS

Assign a cash value or score to each

possible outcome

Estimate the probability of each outcome

Select the most profitable outcome

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FORCE FIELD ANALYSIS

Looks at all the forces for and against a

decision

Method of weighing pros and cons

Helps you to plan to strengthen the

forces supporting a decision, and reduce

the impact of opposition to it.

69Planning

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COST/BENEFIT ANALYSIS

Technique for deciding whether to make a

change

Add up the value of the benefits of a

course of action, and subtract the costs

associated with it

Takes into consideration the effect of time

by calculating the payback period

Planning 71

COST/BENEFIT ANALYSIS

Two possible approaches Consider only financial costs and

benefits put a financial value on intangible costs

and benefits Example: Tree worth 5000 for wood or

100000 for its environmental value This inevitably brings an element of

subjectivity

Planning 72

Shreyash Shah

Roll No. : 93References: www.mindtools.com www.accel-team.com Planning –A Global perspective

Weihrich & Koontz

Planning 73

Kairav Parikh

Roll No. : 70References: Principles of Management

Koontz and O’Donnel Principles of Management

Prasad L.M. The Principles of Management

Rustom S. Davar

CREATIVE PROBLEM SOLVING

Planning 75

CREATIVE PROBLEM SOLVING

Approach towards Problems

Avoid them - refuse to

recognize that a problem exists

Solve them as necessary - deal with the urgent

Seek them out - anticipate them

thus avoiding them becoming urgent

Planning 76

STAGES IN CREATIVE PROBLEM SOLVING

Monitor Anticipate

Identify

Generate

Evaluate / Make

Decisions

Champion

Implement

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BRAINSTORMING

Proven tool for expanding the range of solutions

Emphasis is on spontaneous suggestion of ideas for problem solution

Team for brainstorming should be a mix of experienced professionals and freshers

Open thinking should be encouraged to bring out innovative ideas

Planning 78

BRAINSTORMING

Rules for Brainstormi

ng:

No evaluation of ideas

presented

No consideration of likelihood of implementation

Build on what others have suggested

Grope for the completely new

and unusualWhen in doubt, say what you are thinking

Planning 79

PARADIGMS

Strongly held beliefs and assumptions

Paradigm paralysis

Paradigms may be long standing or new

Appear to be completely consistent with common sense and the decision maker's life experiences

Shift in opinion is required

Planning 80

Kairav Parikh

Roll No. : 70References: Principles of Management

Koontz and O’Donnel Principles of Management

Prasad L.M. The Principles of Management

Rustom S. Davar

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