Principles of Management
MODULE 3
Foundations of Planning
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PLANNING
Definition:
Planning encompasses defining the organizations objectives or goals, establishing an overall strategy for achieving those goals and developing a comprehensive hierarchy of plans to integrate and coordinate activities .
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PLANNING
The Purpose of Planning:
Gives direction Establishes coordination Reduces uncertainty Reduces overlapping / wasteful action Establishes objectives or standards
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Criticisms of Formal Planning
Planning may create rigidity. Plans cannot be developed for a dynamic environment. Formal plans cannot replace intuition and creativity. Planning focuses managers attention on todays competition, not on tomorrows survival Formal planning reinforces success, which may lead to failure
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Planning Increases Performance
Generally produces positive financial results Quality of the planning process and the implementation efforts are more important than the extent of planning Environmental change can strongly affect the impact of planning
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Types of Plans
BREADTH TIME FRAME FREQUENCY SPECIFICITY OF USE
Strategic Tactical
Long-term Short-term
Directional Specific
Single use Standing
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Types of Plans
Strategic -- organization wide,
overall objectives, position firm in environment
Tactical -- specify the details of
how overall objectives are to be met
Short term -- less than a year long term -- beyond five years
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Types of Plans
Specific -- clearly defined
objectives
Directional -- flexible plans
setting out general guidelines a unique situation
Single use -- meets the needs of Standing -- provides guidance for
repeatedly performed actions
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Clear
Specific Plans
Low
Flexibility
Objectives
General
Directional Plans
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High
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Managerial Levels and Plans
Strategic Planning
Top Executives
Middle-level Managers
Operational Planning
First-level Managers
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Management By Objectives (MBO)
What is MBO ?
A system in which specific performance objectives are jointly determined by subordinates and their superiors, progress toward objectives is periodically reviewed and rewards are allocated on the basis of that progress.
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Management By Objectives
Common MBO elements
Identify key job tasks Set specific and challenging goals Encourage active participation Prioritize goals Build in feedback Link rewards to goal attainment
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Management By Objectives
Overall Overall Organizational Objectives Organizational Objectives
Divisional Divisional Objectives Objectives
Departmental Departmental Objectives Objectives Individual Individual Objectives Objectives
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MBO Downside
Overly focussed on what is being measured rather than final result (quantity over quality) Individual rather than team focus Objectives become ceilings rather than floors -- decreases further motivation
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1. 1. 4. 4.
Identify Current Mission Identify Current Mission 2. 2. Analyze the Analyze the Environment Environment Opportunities Opportunities & Threats & Threats
Analyze Analyze Resources Resources 5. 5. Strengths & Strengths & Weaknesses Weaknesses
3. 3.
6. 6. Reassess Organizations Mission Reassess Organizations Mission 7. 7. 8. 8. 9. 9. Formulate Strategies Formulate Strategies Implement Strategies Implement Strategies Evaluate Results Evaluate Results
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The Strategic Management Process
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The Strategic Management Process
Identify the current mission and goals Analyze the Environment Environmental Opportunities Threats Analyze the firms Resources and Skills Firms Strengths and weaknesses Reassess the mission and objectives Strategy Formulation Implement strategies Evaluation
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Mission
The fundamental purpose of an organization -the definition of success
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SWOT: Identifying Organizational Opportunities
Organizations Resources Opportunities in the Environment
Organizations Opportunities
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Competitive Strategies
Cost-leadership Differentiation Focus
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Comparison: Entrepreneurs and Traditional Managers
Traditional Manager
Primary motivation Time orientation Activity Risk tendency View toward mistakes Corporate rewards Short-term goals Delegation Low Avoidance
Entrepreneur
Independence 5-10 year growth of business Direct involvement Moderate Acceptance
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Project Management and Process
Contemporary planning tool Is a process of quality control to ensure a projects activities are done on time, within budget, and according to specification Project is a one-time-only set of activities that has a definite beginning and ending point in time
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Define objectives
Identify activities and resources
Establish sequences
Compare with objectives
Determine project completion date
Estimate time for activities
Determine additional resource requirements
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