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Planning
Planning is defined as selecting missions andobjectives as well as the actions to achievethem, which requires decision making, i.e.
choosing a course of action amongst allalternatives.
Plans provide a rational approach in achievingpreselected objectives.
Planning bridges the gap from where we areto where we want to go.
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Types of plans
Missions or Purposes
The basic purpose of function or tasks of an enterpriseor 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 ofcourses of action and allocation of resourcesnecessary to achieve these goals.
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Policies
Policies are general statements or understandings
that guide or channelize the thinking in decisionmaking.
Policies define an area within which a decision isto 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.
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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, taskassignment, 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
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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 theorganization.Slide 8
Establishing objectives
Establish objectives for entire organization andthen for each subordinate work unit.
To be done for long term as well as short
term.Slide 8
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Developing premises
To establish, circulate and obtain agreement to utilize
critical planning premises such as forecasts, applicablebasic 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
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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
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Steps in
Planning
Slide 6
Slide 7
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Objectives of planning
Objectives are defined as important endstowards which organizational and individual
activities are directed.
Objectives are verifiable i.e. at the end of theperiod, 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.
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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.
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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 theobjectives for their positions and present them to
their superior.
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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.
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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.
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Management by Objectives
A comprehensive managerial system thatintegrates many key managerial activities in a
systematic manner and is consciously directed
toward the effective and efficientachievement of organizational and individual
objectives.
It is an instrument for motivating individualsalong with a tool used for performance
appraisal.
Also used in strategic planning.
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Benefits of MBO
Improvement of managing through results-oriented planning
Clarification of organizational roles and
structures as well as delegation of authorityaccording to the results expected by the
people occupying the roles.
Encourages commitment to personal andorganizational goal
Develops effective controls used to measure
results and lead to corrective actions.