3 pom kc 6 sep. 2010
DESCRIPTION
TRANSCRIPT
Bhawana Dahiya [email protected]
PLANNING
Types of Plans
OperationalPlans
TacticalPlans
StrategicPlans
Specify actions toachieve tactical plans
(very short-term)
Steps for achieving strategic objectives(usually one year or
less)
Establish long-rangeobjectives
Bhawana Dahiya [email protected]
Types of Plans
Mission / Purpose (Strategic Plans)The ‘reason for existence’ of an organization
Bhawana Dahiya [email protected]
Type of Plans Objectives/ Goals
The end towards which activity of an organization is aimed, e.g.○ For a Business enterprise – profit, surplus creation;○ For an vocational NGO – to provide means of
livelihood to maximum people in the area they are serving
StrategiesDetermination of the long term objectives and
adoption of a course of actionGives a frame work for linked action-plans,
communicated systematically to guide thinking and actions.
Bhawana Dahiya [email protected]
Policies“Plans” that are general directional statements (or
understandings) that guide/help in decision making:○ Repeat decisions taken ‘reflexively’;○ Delegation of tasks without loss of control
Some discretion is permissible depending on circumstances thus encouraging initiative within limits and situational adjustments;
Issues with “Policy”○ Seldom documented in writing○ Subject to interpretations
Type of Plans
Bhawana Dahiya [email protected]
ProceduresPlans that are chronological sequences of required
actions: task-oriented in nature;
Cuts across department boundaries (sub-systems) in an organization: e.g. attendance, applying for leave
Procedures and policies are inter related: e.g. authorization for paid leave
RulesSpecific actions or non-actions allowing no discretionWhat is acceptable and what is not?
Type of Plans
Bhawana Dahiya [email protected]
ProgrammesAction plans (mainly non-routine or for changed activities)
including, task assignments, steps to be taken, resources to be deployed etc. to achieve a (new/renewed) goal;○ Primary program may require supporting programs,
spreading across the enterprise;○ Perfect coordination between supporting & primary programs
essential to avoid delays, unnecessary costs and expected roll-out.
Programs are a complex of (sub)goals, policies, rules and other elements necessary for the course of action e.g. obtaining ISO certification.
Type of Plans
Bhawana Dahiya [email protected]
BudgetsA statement of expected results expressed in
“Numerical terms” e.g. financial operating budget = “profit plan”;
Budgets enforce precision in thinking:○ Making a budget is ‘planning’ by itself;○ Encourages innovation – a “different” way to work
Budgets serve for ‘Control’:○ Enforces discipline in execution of plans;○ Instills cost consciousness;○ Makes people (constantly) plan!
Type of Plans
Steps in Planning
Being aware of challenges /opportunity
Market, Customer’s wants, Competition,Own strengths & weakness
Setting Goals/Objectives
What to accomplish& when
Planning premises
Internal & externalEnvironment/conditions
Identifyingalternatives
Comparing & choosing analternative
Decisionmaking
Budgeting(Quantifying Plans)
e.g., Sales budgetOperational Expense budget,Capital expenditure budget
Formulating Supporting
plans
e.g., plan to buyNew machines, recruit & trainEmployees, develop product etc
Bhawana Dahiya [email protected]
Planning PeriodShort term plans e.g. raw material buying plan in a
factoryLong term plans e.g. product development plan,
plant/production facility installation;
Steps in Planning
Being aware of Opportunity
Considering Market,Competition, Customer’s wants, Own strengths & weaknesses
Setting Goals/Objectives
What to accomplish& when
Objective = Important end towards which activities are directed; therefore needs verification at the end of the plan period.
Hierarchy of Objectives
Mission
Overall Objectives &
Key Result Areas
Divisional Objectives
Departmental Objectives
Individual Objectives
Objectives set end results – they need to be supported by a hierarchy of sub-objectives, duly networked through the organization to avoid discord and wasted effort.
Bhawana Dahiya [email protected]
The Organizational Objectives get trickled down into the objectives of :Divisions Departments Individual objectives;The ‘cascade’ principle: seamless flow
Mutual support & interlocking of goals is essentialManagers must ensure that the components of
the network fit each other;Departments/divisions can be ‘blind-sided’
Hierarchy of Objectives
Planning Premises & Strategies
Setting Goals/Objectives
What to accomplish& when
Planning premises
Internal & externalenvironment
Identifyingalternatives
Comparing & choosing analternative
Decisionmaking
Strategic Planning Process
Strategy = determination of the purpose / the basic long-term objectives; the adoption of courses of action and allocation of resources required to achieve the aims.
Planning Premises & StrategiesStakeholderWishes &Shareholderdemands
ManagementOrientation
EnterpriseProfile
Purpose &Major objectivesof enterprise
CurrentExternalsituation
Currentresourcesituation
ForecastExternalsituation
ExternalOpportunity& Threat
InternalStrengths &Weakness
Key success factors & Alternative Strategies
Strategicchoice
The Strategic Planning Process
Planning Premises
Porter’s Five Forces : a model for analysis of theexternal influences
Planning Premises: forecast of demand
Estimate of future demand is made by qualitative methods, time-series methods and/or causal methods: Qualitative relies on judgment of experts to translate to quantities; Time-series statistically interpolate demand on historical data; Causal method seek co-relation on cause and effect basis between two
(or more) variables to quantify demand; However, all forecasting methods are limited by:
Handling of un-quantifiable factors e.g. national pride Unrealistic assumptions fuelled by a desire to succeed Excessive data required (often unobtainable) to make accurate forecasts Uncertainty with environmental changes: Technology, Govt. Policy, International
alignments, New materials/sources, Climate etc. Coping with uncertainties require:
Sensitivity analysis & “What if” scenarios (trust instinct!); Planning for contingencies – with defined cut-in milestones.
Planning Premises & Strategies
Decision Making = is the core of the planning process; a plan does not come into being unless a ‘decision’ i.e. certain commitments of resources, managerial time and money are made and risks are taken.
Comparing & choosing analternative
Decisionmaking
Budgeting(Quantifying Plans)
Say, Sales budgetOperational Expense budget,Capital expenditure budget
Formulating Supporting
plans
Say, plan to buyEquipment, recruit & trainEmployees, develop product etc
Bhawana Dahiya [email protected]
ORGANISING
Organising
Organising is the process of defining and grouping activities and establishing authority relationships among them to attain organizational objectives.
Bhawana Dahiya [email protected]
Importance of Organizing
Plan implementation Assignment of authority, responsibility, and
accountability Division of work Establish relationships among individuals,
groups & departments Allocation and deployment of organizational
resources
Bhawana Dahiya [email protected]
Classical Viewpoint
SPAN OF 8
Base level = 4096
Managers (levels 1-4)
= 585
1
8
64
512
4096
Bhawana Dahiya [email protected]
Contemporary Viewpoint
1
4
16
64
256
1024
4096
SPAN OF 4
Base level = 4096
Managers (levels 1-6)
= 1365
Bhawana Dahiya [email protected]
Centralization & Decentralization
Bhawana Dahiya [email protected]
Centralization & Decentralization
Bhawana Dahiya [email protected]
CENTRALIZATIONDECENTRALIZATIO
N
Environment is stable Environment is complex, uncertain
Lower level managers (LLM) are not as capable or experienced at making
decisions as upper level mangers
LLM are capable and experienced a making decisions
LLM do not want to have a say in decisions
LLM want a voice in decisions
Decisions are significant Decisions are relatively minor
Bhawana Dahiya [email protected]
CENTRALIZATIONDECENTRALIZATIO
N
Organization is facing a crisis or the risk of company failure
Corporate culture is open to allowing managers to have a say in what
happens
Company is large Company is geographically dispersed
Effective implementation of company strategies depends on managers retaining say over what happens
Effective implementation of company strategies depends on managers
having involvement and flexibility to make decisions
Bhawana Dahiya [email protected]
Departmentalization
Putting specialists together Direction of a manager Departmentation
ProcessSetting up and establishing departments
Bhawana Dahiya [email protected]
Organizing Process
Bhawana Dahiya [email protected]
Identify Activities
Selling
Accounting
Delivery
Quality Control
Advertising
Compensating
Training
Production
Purchasing
Budgeting
Recruitment
Maintaining Personnel
Bhawana Dahiya [email protected]
Classify Activities in Departments
>Selling>Advertising>Delivery
>Production>Purchasing>Quality control
>Accounting>Budgeting>Compensating
>Recruitment>Training>Maintaining personnel
MARKETING OPERATIONS FINANCEHUMAN
RESOURCES
Bhawana Dahiya [email protected]
Purpose of the Structure
Defines relationships between tasks and authority
Defines formal reporting relationships, levels of hierarchy, span of control
Defines individual departments Defines systems that affects the organization
Bhawana Dahiya [email protected]
Formal System
Planned structure Lines of responsibility, authority, and
position Establish patterned relationships among
components Can be described through:
Organizational ChartPolicy ManualDepartments
Bhawana Dahiya [email protected]
Based on needs, sentiments, and interests of people
Vulnerable to expediency, manipulation and opportunism
More subtle and invisible in the organizational chart
Can be classified as:Horizontal = same department or same levelVertical = different levelsMixed = combination of both
Informal System
Formal vs Informal Organizations
FORMAL INFORMAL
Have planned structure Deliberate attempts to
create patterned relationships
Usually shown by a chart
Advocated by traditional theory
Not formally planned Arise spontaneously as
a result of interactions Not depicted in a chart Stressed by human
relation theory