Principal Of Management

Basic elements of decision making and the planning

process.
 The purpose of organizational goals, and identify different kinds of goals. Discuss who sets
goals, and describe how to manage multiple goals. The function of decision making and the
planning process.
 Decision making is the comer stone of planning. P&G decided to set a goal of doubling its
revenues over ten-year period. The firm’s top management could have opted an array of
alternative options i.e. 25% revenue, time frame shorter or longer, new markets, cutting costs,
or buying competing businesses,
 The planning process is the first basic managerial function that organizations must address.
 With an understanding of the environmental context managers develop a number of different
types of goals and plans.
 Decision making is the underlying framework of all planning because every step of the
planning process involves a decision.

The planning process.

 Planning is the most basic and primary function of management. It is the pre-decided
outline of the activities to be conducted in the organization. Planning is the process of
deciding when, what, when, where and how to do a certain activity .

The organization’s Mission

Purpose premises values direction

↓ ↓

Strategic goals Strategic plans

Tactical goals Tactical plans

Operational goals Operational plans

Organizational Goals.

 Purpose of goals.
 Provide guidance and a unified direction for people in the organization.
 Have a strong effect on the quality of planning.
 Serve as a source of motivation for employee of the organization.

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 Principal Of Management

 Provide an effective mechanism for evaluation and control of the organization.

Kind of goals

 Goals by level:
 Mission a statement of an organization’s fundamental purpose.
 Strategic goal: goals set by and for top management of the organization that
address broad, general issues.
 Tactical goal: goals set by and for middle managers: their focus is on how to
operationalize actions to strategic goals.
 Operational goals: goals set by and for lower-level managers to address issues
associated with tactical goals.
 By area
 By time frame:
 Long term
 Intermediate term
 Short term-(action plan & reaction plan)

May be explicit or open-ended

Varies by level

Responsibilities for setting goals

Optimizing: balancing and reconciling possible conflicts among goals

Organizational plans

 Kinds of organizational plans

 Strategic plan: A general plan outlining resource allocation, priorities and action
steps to achieve strategic goals. The plans are set by and for top management.
 Tactical plan: A plan aimed at achieving the tactical goals and is developed to
implement parts of a strategic plan.
 Operational plan: plans that have a short-term focus. These plans are set by and
for lower-level managers to carry out tactical plans

Responsibilities for planning

 Planning staff
 Planning task force
 Board of directors
 CEO
 Executive committee
 Line management

Contingency planning

 Contingency is the determination of alternative course of action to be taken if an

intendeds plan is unexpectedly disrupted or rendered inappropriate. These plans help
managers to cope with uncertainly and change

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 Principal Of Management

Ongoing planning

Action point
specify indicators
Action point,
Action point
implement plan for the successfully
Action point
develop plan, and formally contingency complete plan
identify events and or
considering
contingency develop
contingency events contingency
events contingency plans
for each possivle plan
event
Monitor contingency event indicators and implement
contingency plan if necessary

Tactical planning

Developing and executing tactical plans

Developing tactical
plans
Recognize and overarching
strategic and tactical .
Specify relevant resource time.
Executing tactical plans
Evaluate each course of in light of its
obtain and information and monitor
horizontal and communication and of
monitor ongoing activities goal

Recognize and identify resource

Operational planning

Plan Description
Single-use plan Developed to carryout course of action not likely to
be repeated in the future
Program Single-use plan for a large set of activities
Project Single-use plan of less scope and complexity than a
program
Standing plan Develop for activities that recur regularly over a
period of time
Policy Standing plan specifying the organization’s general
response to a designated problem or situation MC
Donald
Standard operating procedure Standing plan outlining steps to be followed in
particular circumstances
Rules and regulations Standing plans describing exactly how specific
activities are to be carried out

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 Principal Of Management

Barriers to Goal setting & planning

 Inappropriate goals
 Improper reward system
 Dynamic and complex environment
 Reluctance to set goals
 Resistance to change
 Constraints

Overcoming the barriers

 Understand the purpose of goals and plans

 Communication and participation
 Consistency revision and updating
 Effective reward systems

Management by Objective (MBO)

 The process to collaborative goal setting by a manager and subordinate; the extent to which
goals are accomplished is a major factor in evaluating and rewarding the subordinate’s
performance.

The nature and purpose of MBO:

The purpose of MBO is to give subordinates a voice in the goal setting and planning process and
to clarity for them exactly what they are expected to accomplish in a given time span. MBO is concerned
with goal setting and planning for individual manage and their units or work groups.

The MBO process

 Starting the MBO program

-it must start at the top of the organization
-employee must also be educated about what MBO is, what they think it will do.
-manager must implement it in a way that is consistent with overall organizational goals
 Collaborative goal setting and planning
Manager tell their subordinate what org. and unit goals and plans top management has
established.
Manager meeting with their subordinates on a one-to-one basis to arrive at a set of goals and
plans the goals are refined to be as verifiable as possible and to specify a time frame for their
accomplishment.
Role of counselors
Workable and attainable
Spell out the resources
 Period review
 Evaluation

Effectiveness of MBO system

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 Principal Of Management

 Benefits of MBO
 Increased motivation of employee
 Enhanced communication
 More objective performance appraisal
 Helps in finding managerial talents
 Ensures effective control
 Problems associated with MBO
 Improper implementation
 Lack of top management support
 Lack of top commitment at lower level
 Too much emphasis on quantitative goals

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