NATURE OF PLANNING
• Intellectual Activity
• Forward-looking
• Pervasive
• Continuous Mental Exercise
• Flexible
• Goal-oriented
• Integrative and inter-related
IMPORTANCE OF PLANNING
• Primacy of planning
• Economical
• Facilitates decision-making
• Promotes coordination and control
• Reduces risk and uncertainty
• Forecasting
• Increase organisational effectiveness
PLANNING
• BENEFITS • LIMITATIONS
• Focus on objectives • Time consuming and
expensive
• Economical Operation • Heavy cost and risk
• Innovation involved
• Coordination and • Probable results
Control • Internal Inflexibilities
• Reduces uncertainty • External Inflexibilities
• Problems of rapid change
PRINCIPLES OF PLANNING
• Principle of co-ordinated planning
• Principle of efficiency
• Principle of flexibility
• Principle of sound and consistent premising
• Principle of contribution to objectives
• Principle of acceptance
• Principle of commitment
• Principle of limiting factors
• Principle of navigational change
• Principle of timing
STEPS IN PLANNING
• Perception of opportunities
• Establishing Objectives
• Planning Premises
• Identification of Alternatives
• Evaluation of alternatives
• Choice of alternative plans
• Formulation of supportive plans
• Establishing sequence of activities
CLASSIFICATION OF PLANNING
Organisational Level: Divisional, Corporate,
Sectional
Focus: Strategic, Operational, Tactical
Time Period:Long, Medium, Short-range
TYPES OF PLANS
STANDING PLANS: STRATEGIC PLANS
Policies
Procedures OPERATIONAL
Methods PLANS
Rules
SINGLE-USE PLANS:
Programmes
Projects
Budgets
STRATEGY FORMULATION &
IMPLEMENTATION
Env.
analysis
Org.
Mission & Choice Review &
Alternatives Implementation
Objectives of alternative Control
Corporate
analysis Personal
Values
CORPORATE LEVEL STRATEGY
FORMULATION
Strategy Alternatives
Expansion Stability
Intensification Incremental Retrenchment Combination
Mkt. Penetration Growth Divestment Joint Ventures
Mkt. Development Profit Turnaround Strategic Alliances
Pdt. Development Sustainable Liquidation Consortia
Innovation Growth Bankruptcy
Diversification Pause
Horizontal Strategy
Concentric
Conglomerate
BUSINESS LEVEL STRATEGY
FORMULATION
• Differentiation
• Cost Leadership
• Focus
FUNCTIONAL LEVEL
STRATEGY FORMULATION
• R & D Strategy
• Operations Strategy
• Financial Strategy
• Marketing Strategy
• HR Strategy
TYPES OF POLICIES
• Organisational & Functional Policies
• Written & Implied Policies
• Originated, Appealed and Imposed Policies
THE PROCESS OF STRATEGY FORMULATION
Defining policy areas & priorities
Collecting & analysing strategic information
Perception & generation of policy alternatives
Evaluation of policy alternatives
Choice of policy alternative
Testing the policy
Communication of the policy
Review & revision of the policy
FACTORS INFLUENCING
POLICY DETERMINATION
• INTERNAL FACTORS • EXTERNAL FACTORS
Org. goals & strategies Product market factors
Org. resources Resource market
Org. structure factors
Managerial values Socio-political Factors
PROCESS OF MBO
[Link] Planning premises
Key Result Areas
Superior
objectives
Superior recommendation Subordinate statement
for subordinate objective for his objective
Matching resources Subordinate
agreed objective
Subordinate
performance
Performance review
& appraisal
FEATURES OF MBO
• Operational & Comprehensive Technique
• Participative Management
• Result oriented
• Systems approach
• Concentration on Key Result Areas
MBO
• BENEFITS • LIMITATIONS
• Pressure-oriented
• Better morale • Time consuming
• Self-control • Increases paper work
• Clear goals • Problems in goal-setting
• Org. problems
• Motivational Force • Resistance to change
• Improve Performance • Lack of training
Appraisal • Lack of follow-up
• Limited application
• Facilitates better • Failure to teach MBO
planning & control philosophy
ESSENTIALS FOR
EFFECTIVE MBO
• Purpose of MBO
• Top management support
• Training for MBO
• Participation
• Feedback for self-direction & self-control
• Implementing at lower levels
• MBO & salary decisions
• Decentralisation of authority
TECHNIQUES OF
FORECASTING
• Time series analysis
• Regression analysis
• Econometric models
• Extrapolation
• Panel Consensus method
• Delphi method
• Morphological Research method
• Relevance Tree method
NATURE OF DECISION-MAKING
• Goal-oriented
• Alternatives
• Intellectual
• Continuous & Dynamic activity
• Pervasive
• Human & social process
• Integral part of planning
DECISION-MAKING PROCESS
Identification Search Evaluation
Specific
Of For Of
objectives
problems alternatives alternatives
Feedback
Choice
Results Action Of
alternative
TYPES OF DECISIONS
• Routine & Strategic
• Policy & operational
• Individual & group
• Programmed & unprogrammed
• Org. & personal
TECHNIQUES OF DECISION-
MAKING
• Marginal-cost analysis
• Cost-benefit analysis
• Operation research
• Linear Programming
• Network analysis