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Planning
Planning involves selecting missions and objectives and the
actions to
achieve them; it requires decision making that is choosing
from among
alternative future course of action. Plan thus provides a
rational approach to
preselected objectives. Planning also strongly implies
managerial
innovations.
Types of Plan
1.Purposes or Missions – identifies the basic function or
task of an
enterprises or agency or any part of it.The purpose of
business
generally is the production and distribution of goods and
services.
2.Objectives or goals – are the ends towards which activity
is aimed,
they are the results to be achieved. They represent not only
the end
point of planning but the end toward which Organising,
staffing,
leading and controlling are aimed.
3.Strategies – Strategies are grand plan. The most common
usage of the
term are –general programs of action and deployment of
resourcesto attain comprehensive objectives. The
determination of the basiclong term objectives of an
enterprises and the adoption of courses ofaction and
allocation of resources necessary to achieve these goals.
4.Policies – are general statements or undertakings which
guide or
channel thinking in decision making. Not all policies are
“Statements”, they are often merely implied from the
actions of
managers.
5.Procedures – are plans that require method of handling
future
activities. They are guides to action, rather than to thinking,
and they
detail the exact manner in which certain activities must be
accomplished. They are chronological sequences of required
actions.
6.Rules – spell out specific actions or nonactions, allowing
no
discretion.
7.Programs – are a complex of goals, policies, procedures,
rules, tasks
assignments, steps to be taken, resources to be employed
and other
elements necessary to carry out a given course of action;
they are
ordinarily supported by budgets.
Steps in Planning
1.Being aware of Opportunity
- In light of the market, competition, what customer want,
our
strengths and weakness
2.Setting Objectives or goals
- where we want to be and we want to accomplish and when
3.Considering Planning Premises
- In what environment. Internal or External – will our plan to
operate?
4. Identifying alternatives
- what are the most promising alternatives to accomplish our
objectives
5.Comparing alternatives in light of goals
- which alternative will give us the best chance of meeting
our
goals at the lowest cost and highest profit
6.Choosing an alternative
- Selecting the course of action we will pursue
7.Formulating supporting plan
- Such as plans to buy equipment, buy materials, hire and
train
workers. Develop a product.
8.Numberizing plans by making budgets
-Developing such budgets as volume and price of sales
operating
expenses necessary for plans expenditure for capital
equipment
Management by Objectives(MBO)
“ MBO is a comprehensive managerial system that
integrates many
key managerial activities in a systematic manner and that is
consciously
directed towards the effective and efficient achievement of
Organisation and
individual Objectives.”
-Where superiors and subordinates jointly identify the goals
of
the Organisation
Process of MBO
1.Setting preliminary Objectives
2.Clarifying Organisational roles
3.Setting subordinates Objectives
4. Recycling Objectives
Benefits of MBO
Improvement of managing
Clarification of Organisation
Encouragement of Personal commitment
Development of Effective control
Weakness of MBO
Failure to teach the philosophy of MBO
Failure to give guidelines to goal setters
Difficulty of setting goals
Emphasis on short run goals
Danger of Inflexibility
Planning Premises
-A plan is based on certain assumptions called premises
-Assumptions or premises are for a future setting or
happenings
-Assumptions based upon certain intuition or scientific
forecasting
-The assumptions about future derived from forecasting and
used in Planning are known as planning premises
Technological environment affects the success
offirms and the needfor technological advancement cannot
beignored.
DEMOGRAPHIC ENVIRONMENT
Includes the size and growth of population,
lifeexpectancy of the people rural urban distribution of
populationthe technological skills and educational levels of
labour force.
Since new workers are recruited from outside
thefirm, demographic factors are considered as parts of
externalenvironment.
The skills and ability of a firms workers determine to
a large extent how well the orgn can achieve its mission.
NATURAL ENVIRONMENT
- In the ultimate source of many inputs such as rawmaterials,
energy which business firms use in theirproductive activity.
- Availability of natural resources in a region a country is a
basic factor in determining business activity in it.
- It includes geographical and ecological factors such
asminerals and oil reserves, water and forest resources
wealthand climatic conditions, port facilities areall
highlysignificant for various business activities.
-
INTERNAL ENVIRONMENT
Internal factors are to agood extent controllable
factorsbecause the firm can change or modify these factors
to improveits efficiency.
VALUE SYSTEMS
Mmeans the ethical beliefs that guides the organization in
achieving its mission and objective.
Tthe value system of a business orgn makes an
importantcontribution to its success and its prestige in the
world of business.
Vvalue systemof a business firm has an
importantbearing on its corporate culture and determines its
behaviortowards its employees, shareholders and society at
large.
Iinfosys “Our corporate culture is to achieve
ourobjectives in environment of fairness, honesty,
transparency andcourtesy towards our customers
employees, vendors and societyat large”
ORGANISATION STRUCTURE
Mmeans such things as composition of board of
directors,the number of independent directors, the extent of
professionalmanagement and share holding pattern.
Ssignificant influence over decision making process in an
organization.
Internal Internal
Internal Factors Strengths (S) Weaknesses(W)
Eg. Strength in Eg.
External Factors mgt, Weaknesses in
operation, areas
Finance, shown in the box
Marketing, R&D of
Engineering strength.
ternal Strengths
(S)
External Factors SO strategy Maxi WO Strategy
Mini
Opportunities Maxi . Potentially Maxi Eg.
(O) the Developmental
Consider risk most successful strategy
also. Eg strategy, utilizing to overcome
Current and the weakness
future Organisation in order to take
Economic strength to advantage of
condition, take advantage of oppirtunities
political and opportunities
social
changes, New
product
services and
Technology
Forecasting
-Process of predicting future conditions, that will influence and
guide the activities, behaviour and performance of the
Organisation.
Def – “ Forecasting is the formal process of predicting future
events that will
significantly affect the functioning of the enterprises.
Features
Involvement of Future events
Depends upon past and present events
Happening of future events
Make use of forecasting techniques
Process
Developing the ground work
Estimating the future trends
Comparing actual with estimated results
Refining the forecast
Importance
Key to planning
Means of coordination
Basis for control
Executive development
Facing Environmental challenges
Forecasting Techniques
-Qualitative ( use of Statistical tools) and Quantitative
( employ
human judgments to predict future)
Decision Making
-is the process of choosing a course of action from available
alternatives
- Def . Haynes & Massie “ Decision making is a process of
selection from a set of alternative courses of action which is
thought to fulfills the objective of the decision – problem
more
satisfactorily than others.”
UNIT 2
PART A
1. Define Objectives
2.Mention the characteristic of effective policy
3.Explain TOWS Matrix
4.Mention the benefits of MBO
5. Define Planning
6.Mention different types of Plan
7.Define Strategies and tactics
8.Distinguish between policies and objectives
9.Mention the characteristic of Sound policy
10.Define MBO
11.Define Policy
12.Define budgets
13.Define Forecasting
14.Define decision Making
PART B
15
1.Explain the various steps in Planning
2.Explain the Planning Premises
3.Explain the process of MBO. Explain its Merits and
demerits.
4.Discuss elaborately the various types of plans
5.Explain the various techniques of forecasting
6.Discuss the process involved in decision making
7.Forecasting is a systematic analysis of past and present
condition.
Explain
8.Explain the barriers in decision making and ways to
overcome