Planning

Planning is defined as selecting missions and objectives as well as the actions to achieve them, which requires decision making, i.e. choosing a course of action amongst all alternatives. Plans provide a rational approach in achieving preselected objectives. Planning bridges the gap from where we are to where we want to go.

Types of plans
Missions or Purposes
The basic purpose of function or tasks of an enterprise or agency or any part of it.

Objectives or goals
Goals are the ends toward which the activity is aimed.

Strategies
Is defined as the determination of basic long term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals.

 Policies
Policies are general statements or understandings that guide or channelize the thinking in decision making. Policies define an area within which a decision is to be made and ensure that decision will be consistent with, and contribute to, an objective.

Procedures
Are plans that establish a required method of handling future activities. They are chronological sequences of required actions.

 Rules
Specific required actions or non-actions, allowing no discretion. Ex.: no smoking is a rule that allows no deviation from a stated course of action.

Programs
Are complex of goals, policies, procedures, rules, task assignment, steps to be taken, resources to be employed, and other elements necessary to carry out a given course of action, supported by budgets.

Budget
Is a statement of expected results expressed in numerical terms

Steps in Planning
Being aware of opportunities.
Awareness of opportunities is the real starting point of planning, opportunities may be in external environment or within the organization.Slide 8

Establishing objectives
Establish objectives for entire organization and then for each subordinate work unit. To be done for long term as well as short term.Slide 8

 Developing premises
To establish, circulate and obtain agreement to utilize critical planning premises such as forecasts, applicable basic policies and existing company plans Premises are assumptions about the environment in which the plan is to carried out. Slide 8

Identifying alternative courses

Finding what are the most promising alternatives in accomplishing our objectives. Slide 8

Evaluating alternative courses

After seeking out alternative courses and examining their strong and weak points, next step is to evaluate the alternatives by weighing them in light of premises and goals. Slide 8

 Selecting a course/alternative
At this point the plan is adopted Slide 8

Formulating derivative plans

Derivative plans are required to support the basic plans Slide 8

Quantifying plans by budgeting

Plans to be quantified by converting them into budgets. The overall budget of an enterprise represents the sum total of income and expenses, with resultant profit or surplus, and the budgets of major balance sheet items such as cash and capital expenditures. Slide 8

Steps in Planning
Slide 6

Slide 7

Objectives of planning
Objectives are defined as important ends towards which organizational and individual activities are directed. Objectives are verifiable i.e. at the end of the period, one can determine whether or not it has been achieved. Nature of objective
Objectives state end results, and overall objectives need to be supported by sub-objectives. Objectives form a hierarchy as well as a network.

Setting objectives
Managers at different levels in the hierarchy are concerned with different kind of objectives.
BOD and top level mgrs. are involved in determining the purpose, mission and the overall objectives of the firm. Middle-level mgrs. are involved in setting KRA objectives, division objectives and departmental objectives Lower-level mgrs. set the objectives of performance and development goals.

 There are different views about whether the organization should use the top-down or bottom-up approach in setting objectives.
In top-down approach, upper level mgrs. determine objectives for their subordinates In bottom-up approach, subordinates set the objectives for their positions and present them to their superior.

How to set objectives

Quantitative and Qualitative objectives
Objectives should be verifiable (which can be quantified)
At the end of period, one should know, whether the objective has been achieved or not?

Many a times, it is difficult to state results in verifiable terms.

Ex: Facilities department taking care of all services in the office.

Guidelines for setting objectives

List of objectives should not be too long Objective should cover the main features of the job Objective should be verifiable Should state what is to be accomplished and when Desired quality and the projected cost of achieving the objectives should be incorporated.

Management by Objectives
A comprehensive managerial system that integrates many key managerial activities in a systematic manner and is consciously directed toward the effective and efficient achievement of organizational and individual objectives. It is an instrument for motivating individuals along with a tool used for performance appraisal. Also used in strategic planning.

Benefits of MBO
Improvement of managing through resultsoriented planning Clarification of organizational roles and structures as well as delegation of authority according to the results expected by the people occupying the roles. Encourages commitment to personal and organizational goal Develops effective controls used to measure results and lead to corrective actions.