1. A Global and Entrepreneurial Perspective
MANAGEMENT

2. PRINCIPLES OF MANAGEMENT
Planning
Organizing
Leading
Controlling
3. Chapter 2
Essentials of Planning and Managing by Objectives
4. TABLE OF CONTENTS
TYPES OF PLANS
STEPS IN PLANNING
OBJECTIVES
EVOLVING CONCEPTS IN MANANGEMENT BY OBJECTIVES
5. PLANNING
Selecting missions and objectives as well as the actions to achieve them, which requires decision making, that is, choosing a course of action amongst all alternatives
No undesirable deviations from the plans
Controlling:
Comparing plans with results
Planning
Implementation of Plans
Desirable deviations from the plans
Corrective Action
6. TYPES OF PLANS
Mission or Purposes
Objectives or Goals
Strategies
Policies
Procedures
Rules
Programs
Budgets
7. TYPES OF PLANS
Mission or Purpose
The basic purpose or function or tasks of an enterprise or agency or any part of it
The mission statement should guide the actions of the organization, spell out its overall goal, provide a sense of direction, and guide decision-making. It provides "the framework or context within which the company's strategies are formulated
For example; some purposes are as under;
8. 9. TYPES OF PLANS
Objectives or Goals:
The end towards which the activity is aimed.
Strategy:
Came out from the military use. It may be defined as:
The determination of the basic long term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals
Policies:
General Statements or understandings that guide or channelize thinking in decision making
Procedures:
Plans that establish a required method of handling future activities
Procedures may or may not cut across the boundaries of different departments
These may also include the activities of third party contractors
Rules
Rules spell out specific required actions or non actions, allowing no discretion
10. TYPES OF PLANS
Programs:
Programs are a complex of goals, policies, procedures, rules, task assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action; supported by budgets
or
A program is a planned sequence and combination of activities designed to achieve specified goals within set policies. Programs normally involve
equipment
materials
money
personnel and
time
Budget:
Budget is a statement of expected results expressed in numericalterms
It includes the numerical statement in terms of expected cash flow, expenses and revenues, capital outlays or labor or machine-hour utilization.
11. Steps in Planning
12. STEPS IN PLANNING
Being Aware of Opportunities:
Its a preliminary step and emphasizes on being aware of the external environment before setting any objectives.
It is recommended that a proper SWOT analysis of the given situation to be done for the company/ department
a realistic diagnosis of the situation would lead to setting realistic objectives
Establishing Objectives:
The objectives are set first for the enterprise and then for each sub-unit.
The goals are made long term and then broken down in details to short term goals
Objectives specify the end points for which the sequence of activities is being carried out
13. STEPS IN PLANNING
Developing Premises:
Premises:premises are assumptions about the environment in which the plan is to be carried out
Principle of Planning Premises:the more thoroughly individuals charged with planning understanding and agree to utilize consistent planning premises, the more coordinated enterprise planning would be
Forecasting is a major part of premising, it includes:
What kinds of markets will be there
What volume of sales
What prices
What products
What technical developments
Costs, wage rates, tax rates and policies
What new plants?
Political or social environment
Long terms trends etc
14. STEPS IN PLANNING
Determining Alternative courses:
It is important to search for and examine alternative courses of action, especially those not immediately apparent
Evaluating Alternative courses:
The alternatives are evaluated in the light of premises and goals, in terms of the profits, timelines, risks, uncertainty etc
Selecting a Course:
This is the point of decision making. Evaluation often leads to more than one better/ advisable courses. Some times one best course is selected and one is kept for contingency (mostly in production and security departments)
Some times two courses are adapted simultaneously
15. STEPS IN PLANNING
Formulating derivative plans:
Derivative plans are almost invariably required to support the basic plan
Quantifying plans by budgeting:
The overall budget of an enterprise represents the sum total of income and expenses, with resultant profit or surplus and the budgets of expenses, capital investment etc
COORDINATION OF SHORT AND LONG RANGE PLANS
16. Hierarchy of Objectives
Board of Directors
Top level Managers
Middle level Managers
Lower level Managers
17. OBJECTIVES
Objectives are the ends towards which the organizational and individual activities are directed.
The objectives are required to be Verifiable so as to determine the contribution of every manager towards those may be measured and verified
THE NATURE OF OBJECTIVES
Hierarchy of objectives:
The objectives form a hierarchy, ranging from the broad aim to specific individual objectives
The topmost and the most important objective is the purpose or mission
The purpose or mission is to get translated in overall objectives
And then there are more specific objectives or the Key result areas; in which performance is essential for the success of the enterprise
18. OBJECTIVES
And then there are more specific objectives or the Key result areas; in which performance is essential for the success of the enterprise
The key result areas may be;
Market standing
Innovation
Productivity
Physical and financial resources
Profitability
Manager performance and development
Worker performance and attitude
Service
Quality
19. OBJECTIVES
Setting Objectives and the organizational hierarchy:
Managers at Different levels are concerned with different kinds of objectives
Board of Directors and Top level managers
Determine the purpose and the key result areas
Middle level managers
VP or Director of department etc are involved in setting of key result area objectives, division objectives and departmental objectives
Lower level managers
They set the objectives of the department and units as well as of their subordinates
Managers at each level set their personal objectives as well
Top-down approach: Objectives are management driven
Bottom-Up approach: Objectives must be set by the sub ordinates, which will keep them committed to and motivated towards the objectives.
20. 21. OBJECTIVES
Multiplicity of Objectives:
Managers may get many objectives at the same time
It is wise to set the priority levels to all the objectives
The number of objectives assigned to a manager depends on how much would be performed by himself and how much would he be delegating to the subordinates and then would supervise and control
HOW TO SET OBJECTIVES:
The objectives must be specific, measurable, attainable, realistic and timed
Objectives must be challenging and priorities must be assigned to each of them
Should also be communicated and stated very clearly
Objectives should promote personal and professional growth and development
22. EVOLVING CONCEPTS OF MBO
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
BENEFITS:
People feel motivated when clear goals are effectively communicated to them
Improvement of managing through results-oriented planning
Clarification of organizational roles and structures as well as delegation of authority according to the results expected by the people occupying the roles
Encouragement of commitment to personal and organizational goals
Development of effective controls that measure results and lead to corrective actions
23. EVOLVING CONCEPTS OF MBO
FAILURES OF MBO
Failure to understand the philosophy of MBO by the managers or teams.
The benefit it provides to the teams also needs to be clearly explained
Its philosophy is built on the concepts of self control and self direction
Failure to give guidelines to goal setters is another problem
Managers need to know the enterprise goals, company policies and planning premises
The verifiable goals should also be flexible
The goals should be attainable and no unethical means should be adopted to achieve them
Unethical activities should be punished
Emphasis of short-run goals on long-run goals
In some areas, quantitative goals could not be set, but their importance could also not be negated for eg company image etc