A plan is a forecast for accomplishment. It is predetermined course of action. It is today’s projection for tomorrow’s activity. In other words, to plan is to produce a scheme for future action, to bring about specified results at a specified cost, in a specified period of time.

Meaning of Planning

Based on futurity: “Planning is a trap laid down to capture the

future” (Alen)“Planning is deciding in advance what is to

be done in future” (Koontz)“Planning in informed anticipation of future”

(Haimann) Based on Function:“Planning is thinking process, an organized

foresight, a vision based on fact and experience that is required for intelligent action” (Alford and Beatty)

Definitions by Management thinkers

Goal oriented Flexible Continuous process Primary function Pervasive Involves choice Forward looking Integrated Mental exercise

Features of Planning

Where we are? Where we want to go? Gap? How to bridge the Gap?

Planning Questions

Establishing objective Developing premises Evaluating alternatives and selection Formulating derivative plans Securing cooperation and participation Follow up and remedial measure

Steps in Planning

Provides Direction Provides a unifying framework Economical Reduces risks of uncertainty Facilitates Decision making Encourages innovation and creativity Improves morale Facilitates control

Importance of Planning

Purpose/ Missions Objectives/ Goals Strategies Policies Procedures Methods Rules Programmes Budgets Schedules Projects

Components of Planning/ Type of Plans

Standing Plans (use for long period of time and deal with routine problems)

Single use Plans (Non recurring on nature i.e. can be used once)

1. Mission 2. Strategies3. Policies 4. Procedures5. Methods6. Rules

1. Objectives2. Programmes3. Schedules4. Projects 5. Budget

Types of plans

The Mission or purposes, identifies the basic function or task of an enterprise or agency or a part of it. Every kind of organized operation has, or at least should have if it is to be, meaningful, a purpose or a mission. In every social system, enterprises have a basic function or task assigned to them by the society.

Purpose/ Mission

Objectives or Goals, are the ends towards which the activity is aimed. They represent not only the end point of planning but also the ends towards which organizing, staffing, leading and controlling are aimed.

Objectives/ Goals

Policies define an area within which a decision is to be made and ensure that the decision will be consistent with, and contribute to, an objective. Policies help decide issues before they become problems, make it unnecessary to analyze the same situation every time it comes up, and unify other plans, thus permitting managers to delegate authority and still maintain control over what their subordinates do.

Policies

Policy formulation Policy communication Policy application Policy review and appraisal

Phases of Policy Making

Policies are not easy to explain Inconsistency Lack of proper communication Expensive Failure in interpretation

Difficulties in Policy making and implimenatation

Related to objective Easy to understand Precise Flexible Based on facts Just, fair and equitable Reasonable Review

Characteristics of an effective policy

Point of difference Objectives Policies

1. Basic

2. Meaning

3. Set by4. Determine5. Type of plan

Objectives are Basic to the existence of an organizationThey are ends towards which organization’s efforts are directedTop managementWhat is to be doneSingle use

They are not basic

They are the routes or the means to achieve that goalsTop and middleHow to doStanding plan

Difference between Policies and Objectives

Procedures are plans that establish a required method of handling future activities. They are chronological sequences of required actions. They are guide to action rather than to thinking, and they detail the exact manner in which certain activities must be accomplished.

Procedures

Point of difference Policies Procedures

1. Guide Guide to decision making, thinking and action

Guide to action only

2. Meaning Indicates the broad areas of action

Specify the route based on policies to achieve goals

3. Flexible More flexible Less

4. Formulation Top mgt Low level mgt

Difference between policies and procedures

It is defined as the determination of the basic long term objectives of an enterprise and the adoption of the course of action and allocation of resources necessary to achieve these goals.

Strategies

Rules spell out specific required actions or non actions, allowing no discretion. They are usually the simplest type of plan. “No Smoking” is a rule that allows no deviation from a stated course of action. The essence of rule is that it reflects a managerial decision that certain action must or must not be taken.

Rules

Methods are the sub-units of procedures; they show clearly as to how a step of procedure should be performed. They include the techniques to be employed to make the procedure effective. The primary focus is on finding out the best way of doing a piece of work.

Methods

Point of difference Methods Rules

1. Meaning One best way of doing things

Govern behaviour

2. Features Standardization, simplification of motions to increase efficiency

Strict adherence, to be effective

3. Products of Research, experiments and careful analysis

Managerial thinking regarding good or bad

4. Part of Procedures Not

Difference between Methods and Rules

Programmes are 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; they are ordinarily supported by budgets.

Programmes

Schedules are often combined with programmes to ensure a chronological sequence of activities. It implies fixing of time to commence the work, reaching through the different processes and finishing the task. It translate programmes into action in an orderly fashion.

Schedules

A project is a small programme. When the operation of a progrmame can be easily divided into separate parts with a clear end point, project structure is referred. Each project had definite goals concerning task assignment and time.

Projects

A budget is a statement of expected results expressed in numerical terms. It may be called“numberized” programmes. In fact, the financial operating budget is often called a “profit plan”. A budget may be expressed in financial terms.

Budgets

Ambiguous objective Lack of reliable facts Inaccurate premises Resistance to change Lack of planning skills Failure to integrate with other functions Expensive Inadequate resources Delay in decision External factors

Problems in Planning

Well defined objective Simple and easy to understand Flexible Balanced Economical Continuity Consistency Participation Practical

Essentials of effective Planning

MBO is 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. MBO is based on the assumption that people perform better when they know what is expected if them and can relate personal goals to the organizational objectives. It also assumes that people are interested in the goal setting process and in evaluating their performance against the target.

Management By Objective

Goal specificity Participative decision making An explicit time period Performance feedback

Features of MBO

Mutual understanding Expected efforts (what is expected from

them) Participation Evaluation Fair reward

Assumptions of MBO

To set goals by active participation of all To set verifiable and measurable goals To measure and judge performance To enhance communication To motivate employees To foster the competency

Objectives of MBO

Process of MBO

Goal setting

Action Plan

Final Review

Corrective action

Clear goals Better planning Facilitates control Objective appraisal Employee motivation Better coordination Encourages commitment Better relation between superior and

subordinates Development of managerial skills Facilitates change

Benefits of MBO

Pressure oriented Time consuming Quality suffers Individual focus rather than team Limit individual potential Difficulty of setting goals Unethical means

Limitations of MBO

Organizational commitment Training Availability of adequate resources Timely feedback Address quality and quantity both Conducive environment Reward system Flexible and adaptable

Essentials of effective MBO