PLANNING

PLANNING
Meaning
PLANNING DETERMINE IN ADVANCE WHAT SHOULD BE DONE. IT
INVOLVES LOOKING AHEAD AND PREPARING FOR THE FUTURE

The first and the foremost function of management is planning. Simply

stated, planning is deciding in advance what should be done.

It is future oriented.

To attain its goal of profit maximization, the business has to produce and
sell goods.

Its yearly production and sales targets are broken into weekly and monthly
targets by proper planning.

This makes it possible to work systematically.

 DEFINITION
ACCORDING TO KOONTZ AND O DONNELL SAYS

PLANNING IS AN INTELLECTUALLY DEMANDING PROCESS , IT

REQUIRE THE CONSCIOUS DETERMINATION OF COURCES OF
ACTION AND THE BASING OF DECISIONS ON PURPOSE,
KNOWLEDGE, AND COSIDERED ESTIMATES
According to Koontz and ODonnell Planning is deciding in
advance
What to do? (Aim)
How to do? (Practice)
When to do? (Time)
Who is to do? (Workers)
It bridges the gap from where we are to where we want to
go.
 CHARACTERISTICS OF PLANNING
Planning is the management function
Its goal- oriented
Its future oriented
Its a continuous process
Its involves decision making
Its interpreted approach
It is all-pervasive
It is an intellectual activity
 ADVANTAGES OF PLANNING

It avoid watage of resources

It focuss on objective
Efficent & efectiveness of work
Reduce risk & uncertainity
Provide co- ordination
Facilitate control
 DISADVANTAGES OF PLANNING

Uncertain nature
Expensive
Loss of initiative
Regitity
Ignores of subordinates interest
 TYPES/KINDS OF PLANNING

Long term planning

Medium term planning
Short term planning
Corporate planning
Divisional planning
Departmental planning
Strategic Planning
Operational planning
 Analysing the
Environment &
Determining
the objectives

Developing
Implementation planning
of plans PLANNING premises
PROCESS

Determination
Formulating and Evaluation of
derivative Alternative
plans courses

Selecting the
best course
 Elements of Planning:
Objectives Programmes

Strategies Budgets

Policies Schedules

Procedures Project

Rules
Planning in a turbulent environment
Building scenarios
Crisis planning
Prevention
Preparation
Containment

PLANNING FOR A HIGH PERFORMANCE

Traditional approaches to planning
High-performance approaches to planning
Start with strong mission and vision
Set stretch goals for excellence
Event-Driven Plan
Use performance dashboards
Organize temporary Task Force
 FORECASTING

Forecasting is the formal process of predicting

future events that will significantly affect the
functioning of the enterprise.
 DECISION MAKING
Decision-making is the process of selecting one alternative
from among a number of alternatives available.

Definition of decision-making
According to Haynes and Massie, Decision-making is a
process of selection from a set of alternative courses of action
which is thought to fulfill the objective of the decision-
problem more satisfactorily than others.
 Characteristics of Decision Making
It is a goal-oriented activity
Existence of alternative courses of action
It may be positive or negative
It may also be a decision not to decide
Decision-making is both a science and an art
It is situational
It may be voluntary or induced
It is a complex mental exercise
It is an ongoing activity
 Types of managerial decision
Organisational and personal Decisions

Routine and strategic decisions

Programmed and Non-programmed decisions

Policy and operating decisions

Individual and group decisions

 The process of Decision-making
Defining the Problem

Analysing the problem

Developing Alternative solutions

Evaluating the Alternatives

Selecting the Best Solution

Implementing the Decision

Feedback and control

 Factors involved in Decision Making

Tangible Factors Cost, Profit, Man-hours, Machine-hours,

Output.

Intangible Factors Morale, consumer behavior, Labour

relationship etc.

Personal Factors Experience, intelligence, Courage, Level of

Motivation, Values, Self-Confidence.
 Techniques of Decision Making

Marginal Analysis
Cost Effective Analysis
Risk Analysis
Break-even Analysis
Linear Programming
Operations Research
Simulation
Brainstorming
Delphi method
Decision Tree
 Merits and De Merits of DM
De-merits
Merits
Decision maker is unaware
Decision making helps to
of the alternatives available.
adopt best course of action
Indecisiveness.
Optimum use of resources.
Failure to make correct
It helps to find a solution
diagnosis
It helps to promote
Quick decision
efficiency
Unavailability of necessary
It helps to resolve conflicts
information
Resistance
Making decision by itself
cannot solve any problem
 MANAGEMENT BY OBJECTIVES (MBO)
INTRODUCTION
An organization can have many objectives. The objectives of the workers
may differ from that of management. The Principles of MBO aims at
co-ordinating the individual goals with that of organizational goals. Through
this principle, the management and workers work without any conflicts.

It helps to realise the organizational goals quickly without unnecessary efforts.

DEFINITIONS OF MBO : Each and Every employee of an organization works

whole heartedly towards the attainment of the objectives of an organization is
known as Management by objectives: -Peter F. Drucker.

John Humble calls it a dynamic System which integrates the company need to
achieve its goal for profit and growth with managers need to contribute and
develop himself.
 SETTING
OBJECTIVES

APPRAISAL ,
ANNUAL DEVELOPING
PERFORMANCE ACTION PLANS

CONDUCTING
PERIODIAC REVIEW
PRINCIPLES/STEPS IN MANAGEMENT BY OBJECTIVES :
MBO comprises of the three important principles.
1. FRAMING THE OBJECTIVES :
Objectives can be framed based on the following steps.
a ) EACH AND EVERY OBJECTIVE HAS DIFFERENT GOALS.:
Objectives attained in the lower level help in the achievement of
objectives at the higher level. Each objective depends on the objective
below it and helps in achievement of Upper level objectives. These steps
help in the achievement of upper level objectives by directing the
members and Departmental activities.
b ) AIMS OF MANAGEMENT BY OBJECTIVES :
Each and every activity of the organization is directed towards satisfying
the goals. This is the last stage of the organization. Objectives may be
short and clear. The objectives must be easily understood by persons who
are involved in the activity of achieving them. Goals must agree with the
policies and procedures of the organization. Goals must be efficiently
evaluated, dependent on decision and dependable. Goals must be
reachable within a given period.
c ) CLEAR CUT AIMS :
The indivudaual goals and organisatinal goals must be clear. If the aims are
not clear then confusionarises. Goals must be fixed clearly at all
management levels.

2.IMPLEMENTATION :
Managers require efficiency. Intelligence and ability inorder to attain the
common objective of the organisation. They must be properly
remunerated and motivated so that they will put on best efforts in
management by objectives. Top level executives must not enforce their
control through management by objectives, otherwise it will change into
control by objectives.

3. EVALUATING THE RESULTS :

The objective fixed must be evaluated with the results obtained. The
managers at all levels must have a watch on the activities of the
subordinates to attain the objectives and after a specified period the
results achieved have to be evaluated.
 ADVANTAGES OFMBO
(1)It promotes better communication relationship between the superior and
his subordinates.

(2)It gives the subordinate an opportunity to fix his own targets in

consultation with his superior.

(3)As the subordinates have the freedom to determine their own targets,
they feel motivated.

(4)The periodic review of the subordinates performance enables him to know

whether he is proceeding in the right direction.
 DIS ADVANTAGES OF MBO

(1)The superior and his subordinate may have to meet several times for the
sake of setting the objectives mutually.

(2) Periodic review of the subordinates performance involves lot of time and
also paper work.

(3)MBO has not much to do with the lower levels of management.

CONTROL BY EXCEPTION or MANAGEMENT BY EXCEPTION (MBE)
It is a management technique by which managers concentrate only on
exceptional deviations instead of trying to correct each and every
deviation.
The advantage of the technique of Management by Exception is that it
allows the manager to concentrate on problems that need his attention
and to avoid dealing with those that can be well handled by the
subordinates themselves.
ADVANTAGES OF MBE
(1)It allows the manager to devote more time for important issues by letting
the subordinates deal with the issues of a routine nature.
(2)As the manager need not bother about routine matters.
(3)Since the manager devotes more time for vital issues, he will be able to
make better decisions.
(4)The subordinates are given authority to make decisions on certain matters
without any interference by the executives.
(5)The management is also able to utilize the available talent at the lower
levels.
LIMITATIONS OF MBE
(1)There is no parameter available by which one can differentiate
important deviations from the unimportant ones.

(2)Only an organization that has a perfect system of control will be able to

employ the technique of MBE.

(3)It may lead to dispersal of authority that has its own limitations.