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Essential of Planning and Management by Objectives
Planning:
Selecting missions and objectives as well as the actions to achieve them, which require decision making, that is choosing a course of action from among alternatives
Types of Plans
Mission or Purpose:
The basic purpose or function or tasks of an enterprise or agency or any part of it. For example
At KFC we are committed to customer satisfaction through offering high quality with excellent services and good value. We take great pride in serving each other, our customer and our communities.We seek continuous improvement in all that we do.
At IBM, we strive to lead in the invention, development and manufacture of the industry's most advanced information technologies, including computer systems, software, storage systems and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide
Objectives or Goals:
The ends toward which activity is aimed
Strategies:
The determination of the basic long-term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals
Policies: General statements or understandings
that guide or channel thinking in decision making
Procedures: Plans that establish a required method of
handling future activities
Rules : Spell out specific required actions or non-actions allowing no
discretion
Programs: A complex of goals, policies, procedures, rules, task
assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action
Budgets : A statement of expected results expressed in numerical
terms
Steps in Planning: Being aware of opportunities
Establishing objectives
Developing premises
Determining Alternative Courses
Evaluating alternative Courses
Selecting a Course
Formulating Derivative Plans
Quantifying Plans By Budgeting
Hierarchy of Objectives
Multiplicity of Objectives
Objectives are normally multiple
State the importance of each goal so that major goals receive more attention than lesser ones
How to set Objectives
Objectives must be verifiable
Example of non verifiable Objective: To make a reasonable profit
Example of verifiable objective: To achieve a return on investment of 12% at the end of the current fiscal year
Guidelines for Setting Objectives
Management By Objectives
A comprehensive managerial system that integrates many key managerial activities in a systematic manner and is consciously directed toward the effective and efficient achievement of organizational and individual objectives
A formal set of procedures that establishes and reviews progress toward common goals for managers and subordinates
Elements of MBO
Commitment to the program: At every level managers are committed to achieving organizational and personal objectives
Top level goal setting: First determine the organization’s strategy and set goals that resemble annual objectives
Individual Goals: In an effective MBO program each manager and staff member has clearly defined job responsibilities and objectives
Participation: Managers and employees must participate in goal setting
Autonomy in implementation of plans: The employees enjoy full freedom in choosing the means for achieving objectives
Performance review: Managers and employees periodically meet to review progress toward the objectives
Benefits of MBO
Improvement of managing through results oriented planning
Clarification of organizational roles and structure as well as delegation of authority
Encouragement of commitment to personal and organizational goals
Development of effective controls that measure results and lead to corrective actions
Focuses on three key concepts – specific goal setting, feedback on performance and participation
Failure of Management by Objectives
Failure to teach the philosophy of MBO
Failure to give guidelines to goal setters
Setting verifiable goals with right degree of flexibility
Overuse of quantitative goals
May downgrade important goals that are difficult to state in terms of end result
Danger of forgetting that managing involves more than goal setting