Planning and Decision Making by noorbaduk


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									Planning and Decision Making

           Meaning of planning
• Generally planning is deciding in advance what is to be
  done; it is a projected course of action. Planning process
  starts with the assumption that the future will be different
  from the present and it attempts to determine how the
  enterprise will take advantage of that difference.
  Planning thus becomes a device for change to meet the
• According to Henning & Le Breton “ Predetermined
  course of action and planning function is the core
  function of which all executive functions are dependant
  and subsidiary

        Importance of planning
•   Specific objective.
•   Primacy of planning.
•   Coordination with decision.
•   Contribution to Purpose and objective.
•   Efficiency, economic and accuracy
•   Pervasive in all division
•   Flexibility.

                 Steps in planning
• 1.Be ware of opportunities.
•   In light of :
•   The market.
•   Competition.
•   What customers want.
•   Our strength.
•   Our weakness

• 2. Establishing objectives.
•   Where we want to be and what we want to accomplish and when.

• 3.Considering planning premises
• In what environment – internal or external will our plans operate?

• 4. Determining alternative courses of action.
• What are the most promising alternatives to accomplishing our
• 5. Evaluating alternative courses:
• Which alternative will give us the best chance of meeting our goals
  at the lowest cost and highest profit.
• 6. Selecting course
• Selecting the course of action we will pursue.
• 7. Formulating derivative plans
• Such as plans to :
• Buy equipment; Buy materials; Hire and train workers; Develop a
  new product.

• 8. Numberizing plans by Budgeting Develop
  such budgets as:
• Volume, price and cost of sales.
• Operating expenses necessary for plans
• Expenditures for capital equipment.

    Organizational goals- Purposes
•    Goals are critical to organizational effectiveness, and they serve a
     number of purposes:
1.   They provide guidance and unified direction for people in the
     organization. Goal can help everyone understand where the
     organization is going and why getting there is important.
2.   Goal setting practices strongly affect other aspects of planning.
     Effective goal setting promotes planning and good planning
     facilitates future goal setting.
3.   Goal can serve as a source of motivation for employees of the
     organization. Goals that are specific and moderately difficult can
     motivate people to work harder, especially if attaining the goal is
     likely to result in rewards.

• 4. goals provide effective mechanism for evaluation and
  control. This means that performance can be assessed
  in the future in terms of how successfully today’s goals
  are accomplished.

                Kinds of Goals
• Organizations establish many different kinds of goals. In
   general, these goals vary by level, area and time frame.
• Level
Mission: A statement of an organization’s fundamental
Strategic goal: A goal set by and for top management of
   the organization.
Tactical goal: A goal set by and for middle managers of the
Operational goal: A goal set by and for lower level
   managers of the organizations.
• Area: Organizations also set goals for different areas,
  Such as operations, marketing and finance.
• Time Frame:
• Long term goal
• Intermediate term goal
• Short term goal
• Responsibilities for setting Goals: All managers should
  be involved in goal setting.
• The mission and strategic goals are generally
  determined by the board of directors and top managers.

• Top and middle managers work together to establish
  tactical goals.
• Middle and lower level managers are jointly responsible
  for operational goals.

• Organizational Planning: Organizations
  establish many different kinds of plans. These include
  strategic, tactical and operational.

• Strategic plans are the plans develop to achieve
  strategic goals. More precisely, a strategic plan is a
  general plan outlining of resource allocation, priorities
  and action steps necessary to reach strategic goals.
• Tactical plans aimed at achieving tactical goals and
  developed to implement parts of strategic plan.
• Operational plan focuses on carrying out tactical plans to
  achieve operation goals.

       Time Frame for planning
• Long Range plan: A plan that covers many year,
  perhaps even decades; common long-range plans are
  for five years or more.
• Intermediate plans: A plan that generally covers from
  one to five years.
• Short range plan: A plan that generally covers a span of
  one year or less.

    Responsibilities for Planning
•   Planning Staff
•   Planning Task Force
•   Board of Directors
•   Chief Executive officer
•   Executive Committee
•   Line Management
•   Contingency Planning and Crisis
    Developing Tactical plans
• Recognize and understand overarching
  strategic plans and tactical plans.
• Specify relevant resources and time
• Recognize and identify human resource

       Executing tactical Plans
• Evaluate each course of action in light of its goal.
• Obtain and distribute information resources.
• Monitor horizontal and vertical communication and
  integration of activities.
• Monitor on going activities for goal achievement.
• Operational Planning
• Single Use Plan: Developed to carry out a course of
  action that is not likely to be repeated in future.
• Types of operational plan:
• Program
• Project

• Standing Plan: Develop for activities that
  recur regularly over a period of time.
• Types of standing plans:
• Policy
• Standard operating procedures
• Rules and regulation

       Managing Goal setting and
          Planning Process
•   Barriers to goal setting and Planning
•   Inappropriate goals
•   Improper reward system
•   Dynamic and complex environment
•   Reluctant to establish goals
•   Resistance to change
•   Constrains

     Overcoming the Barriers
• Understand the purpose of goals and
• Communication and participation
• Consistency, Revision and Participation
• Effective reward system

Using Goals to Implement Plans
• Nature and purpose of formal goal setting
• The formal goal setting process
• The effectiveness of formal goal setting


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