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7/27/2019 org and external enivornment3.ppt
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PLANNING
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PLANNING
Management 8/e - Chapter 4 2
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PLANNING
A Plan is course of action to be taken future.
Planning is the process of deciding in
advance what is to be done, how it is to bedone, where, when and whom.
Planning is a mental exercise that requires
imagination, foresight and sound judgement.It is thinking before doing.
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Definition
Koontz O'Donnell :
– “Planning is an intellectual process, the
conscious determination of courses of action”.
Louis A Allen:
“Planning involves the development of
forecasts, objectives, policies, programmes,
procedures, schedules and budgets".Philip Kotler :
“Planning is deciding in the present what to
do in future”.
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Nature of Planning
Planning is goal-oriented:
– Planning seeks to achieve certain objectives
and all plans are linked with the goals of theorganization.
– Planning will become a useless exercises if it
does not contribute in some positive way to the
accomplishment of desired objectives.
– Planning identifies the actions that would lead
to the desired results quickly and economically
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Nature of Planning (Cont.…)
Planning is future Oriented :
– Planning is essentially cooking ahead and
preparing for the future.
– It is based on the proverb “ look before you
leap”.
– Scientific anticipation of future events called
forecasting which serves as the basics of planning.
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Nature of Planning (Cont.…)
Planning is an intel lectual process:
– Planning is a mental exercise involving creative
thinking and imagination.
– A manager can prepare sound plans only when
he has sound judgement , foresight and vision.
– Planning is not mere guess work but involves
logical and systematic thinking.
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Nature of Planning (Cont.…)
Planning is pr imary function :
– Planning saves as the basics for another
functions of management.
– It precedes organizing , staffing, directing and
controlling.
– All the functions are performed within the
framework of plans. – Therefore, Planning is most basic important
function.
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Nature of Planning (Cont.…)
Planning is pervasive :
– Planning required in all types of organizations
and at levels of management.
– Every department prepares plans.
– However, the slope of planning may differ from
one level to another.
–
Top level managers are generally concerned with long time periods.
– Lower level managers are more concerned
with planning activities for the day ,week or the
month.
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Nature of Planning (Cont.…)
Planning is continuous :
– Planning is an ongoing process.
–
Plans are prepared for specific time period e.g.one year.
– At the end of period , new plans have to
prepared.
– Similarly as conditions change , existing plansto be revised.
– They call it the principle of navigational
change.
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Nature of Planning (Cont.…)
Planning aims at eff iciency :
– Planes are prepared to achieve the objectives
in the best way.
– Sound planning leads to accomplishment of
desired objectives at the minimum possible
cost.(i.e. Optimization of resources.)
– A plan is worthless if it is not worth the cost incurred on it.
– Planning also focuses on accurate forecasts.
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Purpose of Planning
Making objectives clear :
– Planning makes goals clean and specific.
– This is because goals are to be achieved are
decided before choosing the course of action.
– Planning focuses attention on the
organizational objectives.
– Plans serve as a guide for deciding what actions should be taken.
– With clear goals ,activities becoming
meaningful.
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Purpose of Planning (Cont.…)
Helps the organization a r ight path:
– Planning helps the organization to keep on the
right path.
– Employees understand how their action relate
to organizational goals.
– Planning avoids aimless and ad-hoc action.
– Planning provides systematic and orderlytowards the goals.
– Without goals, decisions become ad-hoc
choices become meaningless.
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Purpose of Planning (Cont.…)
I t reduces r isk and uncertainty :
– Business enterprises operate in an uncertain
environment.
– Planning enables these enterprises to predict
future events and prepare to face unexpected
events with help of planning , managers can
identify potential dangers and take-steps toover come them.
– Planning is helpful in assessing and meeting
future challenges.
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Purpose of Planning (Cont.…)
I t improve eff iciency of operations :
– Planning involves selection of best possible
course of action.
– It helps to eliminate all types of waste and to
achieve optimum utilization of available
resources.
– Planned action is always better than unplanned action.
– Planning makes the total task of managing
more efficient and effective.
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Purpose of Planning (Cont.…)
Provides the basis for control :
– Planning provides the standard against which
the actual performance can be measured and
evaluated.
– A comparison of performance with the desired
results help to identify the deviations and to
take corrective steps to make the events confirmto plans.
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Purpose of Planning (Cont.…)
Facil i tates decision making :
– Decision making is thus integral part of
planning.
– Process of choosing among alternatives.
– Decision making will occur at many points in
the planning process.
– Planning involves forecasting of futureconditions.
– With the help of planning hasty decisions and
random actions can be avoided.
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Purpose of Planning (Cont.…)
Effective coordination :
– Planning determines the activities of different
individuals ,groups and departments in such
away that maximum coordination between
physical and human resources.
– Without planning it is not possible to co -
ordinate the different activities of anorganisation.
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Limitations of Planning
Planning premises may not be fully reliable.
Dynamic conditions act as a limitation of planning.
Availability of time is a limiting factor of planning.
Cost involved in planning is also a limiting factor. Mental attitude of management can be serious limiting
factors to planning.
Procedural and policies rigidities also proved to be a
hindrance to planning. Capital invested in the fixed assets may be limitation to
planning.
External – Scientific , Technological, economic , political ,
Ethical ,legal and social.
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Types of Planning
Long-range planning :
– Long-range planning sets long-term goals for the
enterprise and then proceeds to formulate specific
plans for attaining these goals. – It involves an attempt to anticipate ,analyze and make
decisions about basic problems.
Short – range planning :
– This concerned with determination of short term
activities to accomplish long term objectives.
– Relates to a relatively short period and has to be
consistent with the long – range plans.
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Types of Planning (Contd...)
Strategic planning :
– Strategic planning is part of functional areas of
business.
– It involves key decisions regarding the overall goalsand strategic of the enterprise.
– It is the process of deciding on basic goals , the
resources required to achieve.
– It is based upon long term forecasts and is done at higher levels of management .
– It contains developmental cum resources planning.
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Types of Planning (Contd...)
Operational planning :
– It also know as tactical or administrative .
– It involves the conversion of strategic plans into
detailed operational programs. – It is blue print for current action and its
supports the strategic plan.
–
It is concerned with specific tasks and reflects aroutine decision.
– It is being prepared at lower level management.
– It concerned with optimum use of resources
with in frame work
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Types of Planning (Contd...)
Functional planning :
– It is prepared for various functional areas like
production ,marketing ,financial and manpower
planning.
– It serves as a guide for people in particular
department of functional area of the enterprise.
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Steps in Planning
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Steps in Planning (Contd...)
Define and describe objective :
– Plans are prepared to achieve objectives/goals.
– First step in planning to define clearly the
objectives of the organization as a whole and each of its individual departments.
– Need for planning arises either for solving a
problem or for exploiting an opportunity that may arise in the future.
– Therefore ,the problem to be solved or the
opportunity to be utilized should be clearly
defined
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Steps in Planning (Contd...)
Determination of planning premises :
– Planning premises are the assumptions about
the future.
– They provide environment or boundaries inwhich plans will be implemented.
– Planning premises are established with help of
forecasting. – Present trends and future possibilities should
be assessed .
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Steps in Planning (Contd...)
Discover alternate courses of action :
– To identify all possible alternatives , it is
necessary to collect and analyze all relevant
information. – Information may be collected from primary
and secondary sources.
–
The data so collected will serve as the basis for development of an alternative course of action.
– The information used in discovering alternative
must be up to date and reliable.
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Steps in Planning (Contd...)
Evaluation of alternatives and final choice :
– The various alternatives are evaluated and
compared in terms of their expected costs and
benefits. – The alternative courses of action should be
judged in terms of common factors such as the
risk involved , expected return , planning
promises goals to achieved etc.
– After objective and scientific evaluation of
different alternatives ,the best alternative is
selected.
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Steps in Planning (Contd...)
Formulating of derivative plan :
– After the basic plan is decided , the next logical steps is
to develop detailed plan for its implementation.
– These detailed plans refer to the policies, procedures ,rules , schedules and budgets , etc.
– For instance, when a company decides to new product ,
plans concerning the product design , procurement of
funds , purchase of materials, training of personnel ,advertising for the product , etc. , have to be prepared.
– Proper timing and sequencing of should be done.
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Steps in Planning (Contd...)
Communicating the plan :
– Plan should be explained to the subordinates to
earn their support in the execution of plans.
– Successful implementation of plans requires
whole hearted coordination and understanding
of personnel.
– It depends upon the attitudes and belief of theemployees in enterprises.
– Successful executing of plans ,requires the
participation of subordinates.
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Steps in Planning (Contd...)
Reviewing the planning process :
– Continuous evaluation of plans and the process
of planning helps to detect short-comings or
pit-falls of the plans.
– All the plans should be reviewed from time to
time in the light of current circumstances and
necessary action should be taken to keep them
up to date.
– A system of constant review and appraisal of
plans must be devised to improve the planning
process.
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Principles of Planning
Principles of contribution to objectives
Principles of pervasiveness of planning
Principles of limiting factor
Principles of flexibility
Principles of navigational change
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Measures of making Planning
more effective