Module6 - Planning

8/6/2019 Module6 - Planning

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Management Function:

PLANNING

Cole io de San Juan de Letran


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5The Manager


Foodfor the BRAIN

I learnedthat theonly way youare going

to get anywherein lifeisto work hardatit. Whether

you're a musician, a writer, an athleteor a businessman(a manager), thereisno getting aroundit. Ifyoudo,

you'll winifyoudon't, youwon't.

Bruce Jenner, Olympic Gold Medalist


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Introduction

A manager creates and maintains an

environment also called as an internal

environment or simply the organization, so that

others can work efficiently in it.

A manager's job consists of planning, organizing,

directing, and controlling the resources of the

organization. These resources include people, jobs or

positions, technology, facilities and equipment,

materials and supplies, information, and money.

Managers work in a dynamic environment and must

anticipate and adapt to challenges.


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DefinitionPlanning is a logical and systematic approach of

formulating the objectives, programs, procedures,

rules and regulations, and other types of plans.

Planning is considered the most basic of all

managerial functions. Without this basic function,

the other four functions of a manager cannot be

tackled efficiently and effectively.

Therefore, a manager organizes, staffs, directs, and

controls in order to guarantee the attainment of

objectives and other types of plans.


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Definition

Planning is a process that involves

defining the organizations goals,establishing an overall strategy for

achieving those goals, and developing a

comprehensive set of plans tointegrate and coordinate organizational

work.


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The Role of Goals and

Plan in Planning

Goals are desired outcomes for

individuals, group, or entire organizations.

Plans are documents that outline how

goals are going to be met including resource

allocations, schedules, and other necessaryactions to accomplish the goals


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Types of Goals

Stated Goals official statements of what

an organization says, and what it wants its

various stakeholders to believe, its goals are.

Real Goals goals that an organization

actually pursues, as defined by the actionsof its members.


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Approaches to

Establishing GoalsTraditional Goal Setting an approach to setting goals are

set at the top level of the organization and then broken down

into subgoals for each level of the organization.

Means-Ends Chain an integrated network of goals in

which the accomplishment of goals at one level serves as the

means for achieving the goals, or ends, at the next level.

Management by Objectives a management system in

which specific performance and goals are jointly determined

by the employees and managers, progress toward

accomplishing those goals in periodically reviewed, and

rewards are allocated on the basis of this progress.


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Characteristics of Well-

designed Goals Written in terms of outcomes rather

than actions

Measurable and quantifiable Clear as to a time frame

Challenging yet attainable

Written down

Communicated to all necessary

organizational members


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Steps in Goal Setting

1. Review the organizations mission

2. Evaluate available resources

3. Determine the goals individually orwith input from others

4. Written down the goals and

communicate them to all who need to

know.

5. Review results to see whether goals

are being met.

How might the planning in a non-profit institution such as the Colegio de San Juan de Letran differ from planning in a for-profit company such as


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Types of Plans

Breadth Time

Frame

Specificity Frequency

of Use

Strategic

Operational

Long-term

Short-term

Directional

Specific

Single-use

Standing


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Types of Plans

Strategic Plans plans that apply to the entire

organization, establish the organizations goals,

and seek to position the organization in term ofits environment.

Versus

Operational Plans plans that specify the details

of how the overall goals are to be achieved.


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Types of Plans

Long-term Plans are plans with time frame

beyond three years.

Versus

Short-term Plans are plans covering one year

or less.


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Types of Plans

Specific Plans are plans that are clearly defined

and that leave no room for interpretation.

Versus

Directional Plans are plans that are flexible

and that set out general guidelines.


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Types of Plans

Single-use Plans pertains to a one-time plan

specifically designed to meet the needs of a

unique situation.

Versus

Standing Plans are ongoing plans that provide

guidance for activities performed repeatedly.


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Purpose of Planning

1. Planning establishes coordinated effort.

2. Planning reduces uncertainty by forcingmanagers to look ahead, anticipate

change, consider the impact of change,

and develop appropriate responses.

3. Planning reduces overlapping andwasteful activities.

4. Planning establishes goals and standards

that are used in controlling.


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The Nature of Planning

C

ont. to purpose and objectives The first basic function

Function of all managers

Efficient organization


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The Pervasiveness of

Decision Making

Planning- defining goals, establishing

strategies for achieving those goals, anddeveloping plans to integrate and

coordinate activities

What are the organizations long-term objectives?

What strategies will best achieve those objectives?

What should the organizations short term objectives be?

How difficult should individual goals be?

Decision making is synonymous with managing


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Decision Making

Organizing- what tasks are to be done, who is

to do them, how the tasks are to be grouped,

who reports to whom, and where decisions

are made

How many employees should I have report directly to me?

How much centralization should there be in the organization?

How should jobs be designed?

When should the organization implement a different structure?


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Decision MakingControlling- monitoring activities to ensure

that they are going as planned

What activities in the organization needed to be controlled?

How should those activities be controlled?

When is a performance deviation significant?

What type of management information system should theorganization have?


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The Decision Making

Process1. Identifying a problem

2. Identifying decision criteria

3. Allocating weights to the criteria4. Developing alternatives

5. Analyzing alternatives

6. Selecting an alternative7. Implementing the alternative

8. Evaluating decision effectiveness


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The Decision Making

Process1 My sales representatives need new computers!

2 Price; weight; warranties; screen type; reliability;

screen size

3 Reliability10

, screen size 8,4 Acer, Compaq, Gateway, HP, Micromedia, NEC, Sony

Toshiba

5 Acer, Compaq, Gateway, HP, Micromedia, NEC, Sony

Toshiba

6 Acer, Compaq, Gateway, HP, Micromedia, NEC,

Sony Toshiba

7 Gateway

8


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The MBO Process1. Formulize long-range organizational objectives

2. Develop specific divisional objectives

3. Establish departmental objectives

4. Set individual job objectives

5. Formulate action plans

6. Implement and take corrective action

7. Review progress toward objectives

8. Appraise overall performance, reinforce behavior, andstrengthen motivation through: Manager training and

self development, compensation, and career and

manpower


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The Basic Steps in

Business Planning1. Define the business idea

2. Establish goals and objectives

3. Evaluate the ideas, goals, and objectives

4. Forecast cash needs

5. Identify source of funds

6. Write a business plan


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Relationship Between The Planning

Process and the Business Plan

PLANNING PROCESS BUSINESS PLAN

Definition of management Description of the

business

Marketing plan Marketing aspect

Organizational and

management plan

Management/

organization aspect

Production plan Production/ technical

aspect

Financial Plan Financial aspect


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Managerial Decision Making

Decision-Making Approach

-Rationality

- Bounded Rationality

- Intuition

Decision-Making

Process

Decision Makers Style- Directive

- Analytic

- Conceptual

- Behavioral

Types of Problems

and Decisions

-W

ell structured programmed- Poorly structured - nonprogrammed

Decision Making

Conditions- Certainty

- Risk- Uncertainty

Decision-Choosing best alternative

- Implementing

- Evaluating


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Making Decisions:

Rational Decision Making describes choicesthat are consistent and value maximizing within

specified constraints.

Bounded Rationalitypertains to behavior that isrational within the parameters of a simplified decision-

making process, which is limited or bounded by an

individuals ability to process information.

Intuitive Decision Making refers to asubconscious process of making decisions on the basis

of experience and accumulated judgment.


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Assumptions of Rationality

The problem is clear and unambiguous.

A single, well defined goal is to be achieved.

All alternatives and consequences are known.

Preferences are clear.

Preferences are constant and stable.

No time or cost constraints exist.

Final choice will maximize payoff.


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What is intuition?

Experience-based decisions Managers make decisions

based on theirpast

experiences.

Affect-initiated decisions Managers can make decisions

based on the feelings oremotions

Cognitive-based decisions Managers make decisions

based on skills, knowledge,

and training

Values or ethics-based

decisions

Managers make decisions on

ethical values or culture

Subconscious mental

processing

Managers use data from

subconscious mind to help

them make decisions


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Types of Problems and

DecisionsWell-Structured Problems (WSP) and Programmed

Decisions (PD). WSP are straight-forward, familiar, and

easily defined problems. PDis a repetitive decision that

can be handled by a routine approach. (EX: customerwanting to return a purchase to retails store, dropping

subject, etc.)

Poorly-Structured Problems (PSP) and

Nonprogrammed Decisions (NPD). PSP are problemsthat are new or unusual and for which information is

ambiguous or incomplete. NDP is a unique decision that

requires a custom-made solution. (EX: selection of

architect to design)


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Decision-Making

ConditionsCertaintypertains to a situation in which a managercan make accurate decisions because all outcomes are

known. (EX: deciding in which bank to deposit)

Riskrefers to those conditions in which the

decision maker is able to estimate the likelihood

of certain outcomes. (EX: adding lift to the

facility)

Uncertaintypertains to a situation in which a

decision maker has neither certainty nor

reasonable probability estimates available.


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Decision-Making Styles

Directive Style a decision making style characterized by

low tolerance for ambiguity and a rational way of thinking.

Efficient and effective. Focus on short run. Minimalinformation and assessing few alternatives.

Analytic Style - a decision making style characterized by

high tolerance for ambiguity and a rational way of thinking.

Want more information and alternatives before makingdecisions.


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Decision-Making Styles

Conceptual Style - a decision making style characterized by

high tolerance for ambiguity and a intuitive way of thinking.

Tend to be very broad in their outlook and will look at manyalternatives. Focus on long run and finding creative solutions

to problems.

Behavioral Style - a decision making style characterized by

low tolerance for ambiguity and a intuitive way of thinking.Work well with others. Concerned about the achievements of

subordinates and respective to suggestions from others.


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Why Managers Fail in Planning

1. Lack of commitment in planning

2. Interchanging planning with plans

3. Failure to develop and implement sound strategies

4. Lack of meaningful objectives and goals

5. Tendency to underestimate the importance of planning

premises

6. Failure to see the scope of plans

7. Failure to see planning as a rational process

8. Too much reliance on experience9. Failure to use the principle of limiting factor

10. Lack of management support

11. Lack of clear delegation

12. Lack of adequate control techniques and information


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Planning Tools and

TechniquesTechniques for assessing the environment

Environmental scanning pertains to the screening of large amount of

information to anticipate and interpret changes in the environment.

Competitor intelligence seeks to identify who competitors are, what they

are doing, and how their actions will affect the organization.

Forecasting predictions of outcomes.Quantitative forecasting applies a set of mathematical rules to a series of past

data to predict outcomes.

Qualitative forecasting - uses the judgment and opinions of knowledgeable

individuals to predict outcomes.

Benchmarking the search for the best practices among competitors

or non-competitors that lead to their superior performance.


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Planning Tools and

TechniquesTechniques for allocating resourcesResources refers to the assets of the organization including financial, physical, human,

intangible, and structural/cultural.

Budgeting/ Budget a numerical plan for allocating resources to specificactivities.

Scheduling refers to detailing what activities have to be done, the order in

which they are to be completed, who is to do each, and when they are to be

completed.

Breakeven analysis refers to a technique for identifying the point at which

total revenue is just sufficient to cover total costs.

Linear Programming pertains to a mathematical technique that solves

resource allocation problems.


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Planning Tools and

TechniquesContemporary planning techniques

Project management refers to the task of getting a

projects activities done on time, within budget, and

according to specifications.

Scenario planning pertains to a consistent view of what

the future is likely to be.

Documents

Module6 - Planning