MG 2351PRINCIPLES OF MANAGEMENT

UNIT- II- PLANNINGR.HARIHARAN,

AP/ EEE

Planning is outlining a future course of action in order to achieve an objective.

Nature – primary function, a dynamic process, based on objectives and policies, a selective process, pervasiveness of planning, an intellectual process, planning is directed towards efficiently, focus with future activities, flexibility of planning, planning is based on facts.

INTRODUCTION

Primary of planning To achieve objectives To cope with uncertainty and change To facilitate control To help in coordination To increase organizational effectiveness To guide decision- making

PURPOSE OF PLANNING

STEPS INVOLVED IN PLANNING

IDENTIFICATION OF OPPORTUNITIES

ESTABLISHMENT OF OBJECTIVES

DEVELOPING PLANNING PREMISES

IDENTIFICATION OF ALTERNATIVES

EVALUATION OF ALTERNATIVES

SELECTION OF ALTERNATIVE

FORMULATING DERIVATIVE PLANS

ESTABLISHING SEQUENCE OF ACTIVITIES

Helps in achieving objectives Better utilization of resources Economy in operation Reduces uncertainty and risk Improves competitive strength Effective control Coordination Encourages motivation Guides in decision making Provides decentralization Improves efficiency Anticipation of crisis

ADVANTAGES AND LIMITATIONS

Lack of accurate information Time and cost Inflexibility Delay during emergency period False sense of security

Contd…

Objectives are the aims, purpose or goals that an organization wants to achieve over varying periods of time.

Characteristics◦ Objectives have an hierarchy◦ Objectives form a network◦ Multiplicity of objectives◦ Objective have a time span◦ Objectives may be tangible or intangible◦ It must have social sanction

OBJECTIVES

Guidelines for setting objectives◦ Cover the main feature of the job◦ Must be clearly specified in writing◦ It should be verifiable◦ It should clearly indicate the organizational mission◦ It should be challenging and reasonable◦ It should yield specific results when achieved◦ It should be coordinated with other units and

managers◦ It should be periodically reviewed◦ It should clearly indicate the resources and authority

SETTING OBJECTIVE

It is a process whereby the superior and subordinate managers of an enterprise jointly identify its common goals, define each individuals major areas of responsibility in terms of result expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.

MANAGING BY OBJECTIVES (MBO)

Focuses attention on what must be accomplished and not how to accomplish the objectives. It is goal oriented rather than work-oriented approach.

To integrate the goals of an organization and individuals.

It tries to combine long and short range goals of organization.

It involves participation of subordinate managers in the goal setting process.

Features of MBO

A high degree of motivation and satisfaction is available to employees through MBO.

Periodic review of performance is an important feature of MBO.

It increases the capability of achieving goals at all levels.

MBO’s emphasis is not only on goals but also on effective performance.

It provides better guidelines for appropriate systems and procedure to achieve the objective.

Contd…

It has an evaluative mechanism by which the contribution of each individual can be measured.

It is not a set of rules, procedures or techniques; it is a particular way of thinking about management.

Contd…

Setting preliminary objectives◦ It starts from top level management.◦ It states why the business is started and exists.◦ Short term objectives are framed taking into

account the feasibility of achieving the long term objectives.

◦ These are formed by viewing the internal and external environment of an organization.

◦ It is subjected to modification.

PROCESS OF MBO

Fixing key result areas◦ Identified based on objectives and planning

premises.◦ Reference to measure the organizational health.◦ Arranged on priority basis.◦ Some KRA’s are profitability, market standing,

innovation, productivity, market performance, public responsibility.

Contd…

Setting subordinate objectives◦ Objectives are achieved through individuals.◦ While setting objectives we should consider

organizational goals, ability and resources available Recycling objectives

◦ Goal setting is a two way process.◦ It should be an interactive one.

Matching resources with objectives◦ Objectives should be carefully matched with available

resources. ◦ Allocation and movement of resources should be

done in consultation with subordinates.

Contd…

Periodic performance reviews◦ Superior and subordinates should hold meetings

to discuss the progress towards objectives.◦ Feedback from these reviews is provided to each

individuals to facilitate self regulation and control. Appraisal

◦ Try to measure the performance of employees.◦ Purpose is to find the shortcomings to reach

objectives and the way to rectify them.

Contd…

Improvement of managing Clarification of organization Personnel satisfaction Team work Development of effective control Fast decision making

BENEFITS OF MBO

Failure to teach the philosophy of MBO Failure to give guidelines to goal setters Difficulty of setting goals Emphasis on short term goals Danger of inflexibility Time consuming Increased paper work

WEAKNESS OF MBO

It is the determination of basic long term objectives and the adoption of the course of action and allocation of resources to achieve these goals.

Nature – SWOT, working towards goal, contingent plan, forward looking, flexible and dynamic, calculation of risk, formulated by top level management.

STRATEGY

Facing environmental challenges. Long term guide to reach goal. Effective utilization of resources. Better coordination Helps in maintaining the market share.

NEED AND IMPORTANCE

STRATEGIC PLANNING PROCESS

MISSION AND OBJECTIVES

ALTERNATIVESCORPORATE ANALYSIS

ENVIRONMENTAL ANALYSIS

STRATEGIC DECISION MAKING

IMPLEMENTATION

REVIEW AND CONTROL

Growth Finance Organizational Personnel Products / services market

KINDS OF STRATEGIES

Communication of strategies◦ Strategies should be communicated to all

employees◦ It should be make sure that everyone involved in

implementing strategies. Developing and communicating planning

premises◦ Managers must develop the planning premises

critical to plans and decisions.◦ If managers do not select the premises and it has

been implemented on personal assumptions then it lead to improper plans.

OPERATIONAL PLANNING

Developing appropriate operational plan◦ Action plans, operational programmes and

decision that take place in various parts of an organization.

◦ Managers should be clear in implementing the program and reviewing it.

Periodic review of strategy◦ Strategy should be reviewed periodically to find

out whether the given strategy is relevant.◦ Major strategies should be reviewed at least once

in a year

Contd…

Developing contingency strategies and programmes◦ Uncertainty can occur at any time. The

formulated strategies should be flexible to make changes.

◦ It provide a degree of preparation for future. Developing appropriate organization

structure◦ For proper function a defined structure is needed.◦ It provides facilities for implementing strategy.

Contd…

Continuing to emphasis planning and implementing strategy◦ Responsible person continue to stress the nature

and importance of these elements.◦ It can be achieved by teaching the managers

about the aim. Setting proper organizational climate

◦ It refers to the characteristics if internal environment such as the condition of cooperation, dedication of people to work

Contd…

It is a broad statement formulated to provide guidance in decision making.

Characteristics◦ Relationship to organizational objectives◦ Clarity of policy◦ To guide in decision making◦ It should be written◦ Communication of policies◦ Balance of policy

POLICY

Need / importance◦ To operationalise objectives◦ To save time and effort◦ To facilitate delegation of authority◦ To speed up decision making◦ To control administration

Contd…

POLICY FORMULAITION PROCESS

DEFINITION OF POLICY AREA

DEFINITION OF POLICY ALTERNATIVES

EVALUATION OF POLICY ALTERNATIVES

CHOICE OF POLICY

COMMUNICATION OF POLICY

IMPLEMENTATION OF POLICY

REVIEW OF POLICY

It is a process of choosing a course of action from among alternatives to achieve a desired goal.

Features◦ Selection process◦ Goal-oriented process◦ End process◦ Human and rational process◦ Dynamic process◦ Situational ◦ Ongoing process

DECISION MAKING

DECISION MAKING PROCESS

IDENTIFICATION OF PROBLEM

DIAGNOSIS AND ANALYSIS THE PROBLEM

SEARCH FOR ALTERNATIVES

EVALUATION OF ALTERNATIVES

SELECTING AN ALTERNATIVES

IMPLEMENTATION AND FOLLOW UP