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Planning
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Planning 1
PLANNING...
Planning
Planning 3
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
Planning 16
BENEFITS
Unity of purpose, direction and effort
Minimizes costs
Better utilization of resources
Basis for control
Delegation and decentralization easier
Fixation of responsibility
Planning 17
LIMITATIONS
Difficulty of accurate premising
Problems or rapid changes
Expensive and time consuming
Planning 18
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
Planning 20
TYPES OF PLANNING
Strategic
TacticalCorporate
Planning 21
TYPES OF PLANNING
Organization
Project
Team Worker
Clients
Planning 22
CLASSIFICATION OF PLANS
Basic
StandingMaster
LEVELS OF PLANNING
Planning 24
LEVELS OF PLANNING
Strategy implementati
on
Goal setting
Planning 25
Functional level
Business
levels
Corporate
level
Planning 26
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
Planning 30
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
Planning 31
Characteristics
Planning 32
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
Planning 42
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
Planning 51
MULTIVOTING
Description
When to Use
Keeping the End in Mind
• Option 1• Option 2• Option 3• Option 4• Option 5
Planning 52
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.
Planning 53
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.
Planning 58
PARETO ANALYSIS…AN EXAMPLE
Planning 59
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
Planning 60
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
Planning 61
PAIRED COMPARISON ANALYSIS…AN EXAMPLE
A = 3 (37.5%) B = 1 (12.5%) C = 4 (50%) D = 0
Planning 62
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
Planning 63
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
Planning 64
GRID ANALYSIS…AN EXAMPLE
Planning 65
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
Planning 66
DECISION TREE ANALYSIS
Assign a cash value or score to each
possible outcome
Estimate the probability of each outcome
Select the most profitable outcome
Planning 67
Planning 68
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
Planning 70
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
Planning 77
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
THANK YOU