“Successful managers deal with

foreseen problems and unsuccessful

managers struggle with
unforeseen problems”….Terry

1
Principles of Management

Planning
 Foundations of Planning
• Planning is one of the four functions of
management.
• Planning involves defining the organization’s
goals, establishing an overall strategy for
achieving these goals, and developing plans
for organizational work activities.

3/14/2016 3
 Deciding in advance what to do, how to do it ,
when to do it and who has to do it.
 A forecast for accomplishment.
 Predetermined course of action.
 To produce a scheme for future action and to
bring about specified results at a specified cost
in a specified period of time.

4
 Purposes of
Planning
Planning serves a number of
significant purposes.
1.Planning gives direction to managers and non-
managers of an organization.
2. Planning reduces uncertainty.
3. Planning minimizes waste and uncertainty.
4.Planning establishes goals or standards
used in controlling.

3/14/2016 5
 Defined in to directions by management thinkers.
 Based on futurity
 As an intellectual function

 Based on futurity:
 “Planning is a trap laid down to capture the future” (Allen)
 “Deciding in advance what is to be done in future” (Koontz)

 “Informed anticipation of future”( Haimann)

 Anticipatory decision making” (R L Ackoff)

5
 As an intelligence function:
 “Planning is a thinking process, an organized
foresight, a vision based on fact and experience that
is required for intelligent action”( Alford & Beatty)
 “Deciding in advance what to do, how to do it, when
to do it and who has to do it” ( Koontz & O’ Donnell)

Planning focuses on future and it involves all the

activities that determine objectives for the future and the
appropriate means for achieving those
objectives. Outcome of planning is a plan, which is a
document that specifies the course of action the
organization will take.
6
 Provides basic foundation from which all future
management functions arise.
 Goal oriented
 All pervasive
 Intellectual exercise
 Continuous process
 Futuristic
 Integrated Process

7
 Planning Where we want
Where we are
to be

8
 Provides direction
 Creates a unifying frame work
 Leads to economical utilization of resources
 Reduces the risks of uncertainty
 Facilitates decision making
 Encourages Innovation & Creativity
 Improves morale
 Facilitates control

9
 Characteristics of Planning
• Goal-oriented
• Looks ahead
• An intellectual process
• Involves choice & decision making
• Primary function of management
• Continuous Process
• Designed for efficiency
• Planning is pervasive
 Advantages
• Facilitates management by objectives
• Minimizes uncertainties
• Provides competitive edge and improves effectiveness
• Encourages innovations / brain-storming
• Facilitates control and co-ordination
• Helps in achieving economies of scale / synergies
PLANNING
 Controlling: No undesirable
Implementation comparing deviations
Planning of Plans plans with from plans
results

Undesirable
deviations

Corrective
action

10
 Long range Vs Short range

 Strategic Vs Operational

 Corporate Vs Functional

 Proactive Vs Reactive

 Standing Vs Single Use

11
 Types of Plans
Plans can be described by their RANGE, TIME FRAME, SPECIFICITY, and FREQUENCY OF USE

On the basis of Range plans can be Strategic or operational plans.

Strategic plans (long-term plans) are plans that apply to the entire organization,
establish the organization’s overall goals, and seek to position the organization in
terms of its environment.
Operational plans (short-term plans) are plans that specify the details of how the
overall goals are to be achieved.

On the basis of Time frame plans can be Short-term or long-term plans.

Short-term plans are plans that cover one year or less.
Long-term plans are plans with a time frame beyond three years.

On the basis of Specificity plans can be Specific or directional plans.

Specific plans are plans that are clearly defined and leave no room for interpretation.
Directional plans are flexible plans that set out general guidelines.

On the basis of Frequency of use plans can be Single-use or standing plans.

single-use plan is a one-time plan specifically designed to meet the needs of a unique
situation.
Standing
r3/e1p4/e2a01plans
t6 are on going plans that provide guidance for activities performed
8
edly.
 Long range plan Point of Short range plan
distinction

Covers many years & Meaning Covers less than one year
affects many departments and is more specific &
of an organization detail
5 yrs or more Time Up to one year

Organizations linkage Primary Linkage with various

with external factors focus parts of an organization
Mission ,long term Deals with Current operations of
goals and strategies organization
Top management Prepared Lower level executives
by

12
 Strategic Plan Point of Operational Plan
distinction

5 years or more Time Under one year

horizon

Adapt to external Purpose Implement internal goals

environment based on
internal strengths
Total institutional Activity Internal tasks &
performance controlled Operations
Top management Level Middle & lower level
involved

Primarily judgmental Basis for Exact data & Standards

planning used

13
 Corporate Plan:
 A comprehensive plan that outlines the broad
objectives of a company as a whole and develops
plans to achieve those objectives
 Holistic and Unified focus
 Focus on organizational performance

 Functional Plan:
 Is unit planning and deals with different
departments in an isolated manner.
 Focus on departmental performance

14
 Proactive Planning:
 Managers challenge the future, anticipating

future contingencies and get ready with

alternative routes for unforeseen
circumstances
 Reactive Planning:
 Organizations react to events as and when

they arise

15
 Standing Plans  Single Use plans
 Developed for  Developed to carry

activities that out a course of

recur regularly action that is not
over a period of likely to be
time repeated in future
 Ex:  Ex:
 Objectives, Policies,  Programmes,
Procedures, Methods, Schedules, Projects,
Rules Budgets

16
 Purpose
or Mission

Objectives

Strategies

Policies: Major or Minor

Procedures

Rules

Programs: Major or minor

and supporting

Budgets: numberized programs

17
 1. Socio-
economic
purpose Board of
directors
2. Mission

3. Overall objectives of the

organization (long-rage, Top-level
strategic) management

4. More specific overall objectives

(e.g, in key result areas (Some)

5. Division objectives Middle – level

(Some) managers

6. Department and Unit objectives

7. Individual objectives Lower-level

• Performance managers
• Personal development objectives

Hierarchy objectives organizational Hierarchy

18
1. Establishing Verifiable Goals or Set of Goals to
be Achieved
2. Establishing Planning Premises
3. Deciding the Planning Period
4. Finding Alternative Courses of Action
5. Evaluating and Selecting a Course of Action
6. Developing Derivative Plans
7. Establishing and Deploying Action Plans
8. Measuring and Controlling the Progress
19
 Being Aware of Opportunity
Comparing alternatives in light of
In light of: goals sought
The Market Which alternative will give us the
Competition
best chance of meeting our goals
What customer want at the lowest cost and highest
Our strengths profit?
Our weaknesses

Setting objectives or Goals
Where we want to be and
what we want to accomplish
and when
Choosing an Alternative
Selecting the course of action we will
pursue

Formulating supporting plans

Considering planning
premises
In what environment – internal
or external – will our plans
operator?
Such as plan to
Buy equipment
Buy materials
Hire and train workers
Develop a new product

Numerizing plans by Marking

Budgets
Identifying Alternatives Develop such budgets as:
What are the most promising Volume and price of sales
alternatives to Operating expenses
accomplishing our Necessary for plans
objectives? Expenditures for capital
Equipment
20
 Planning premises may be wrong:

Rapidity of change:

Time and cost constraints:

Planning may limit new ideas:.

Capital investment constraint:

Lack of control over external factors:

21
 Peter Drucker described M B O in 1954 in
his book, “The practice of management”

 The philosophy of management that

emphasises the setting of agreed on
objectives by managers and their
subordinates and the use of these objectives
as the primary basis of motivation,
evaluation and control efforts.
 Top management’s support and commitment
 Establishing long range objectives and plans
 Establishing specific shorter term
organizational objectives.
 Establishing individual performance
objectives and standards of performance.
 Appraisal of results (Implementation and
maintaining self control, reviewing progress
periodically, appraising performance)
 Taking corrective actions
 Enables managers to think about planning for
results rather than merely planning for work
 Motivates managers to accept goals and
achieve them
 Directs work activity towards organizational
goals/objectives.
 Forces managers to clarify organizational goals
and objectives roles and structures
 Encourages personal commmitment from
employees to achieve their goals/objectives.
 Provides clear standards for control

 Reduces role conflict and role ambiguity

 Provides more objective appraisal criteria.

 Identifies problems better by frequent

performance review.

 M B O aids in development of
personnel.
 Time-consuming

 Enormous paper work and documentation

 Failure to implement MBO
 Contradictory objectives
 Management by exception is a management approach where
a manager’s involvement focuses on the weak areas of the
organisational performance.
 It lets the managers concentrate on bigger, important, and
serious matters only.
 It allows managers to make the most efficient use of their time.

Copyright © 2013 Dorling Kindersley India (Pvt) Ltd

 Centralizatio
n
• It is the systematic and consistent reservation
of authority at central point within the
organization
• Denotes that the majority of the decisions
having to do with the work being performed
are not made by those doing the work but at a
point higher in the organization.

3/14/2016
35
 Decentralizatio
n
• Refers to the systematic effort to delegate to
the lowest levels all authority except that
which can only be exercised at central points.
• It proceeds at a different rate to different
levels and for different functions within the
same company.

3/14/2016
36
THANK YOU……

61