Foundations of Planning in Management
Planning Process Step 1-Setting Objectives • Setting objectives: Addresses issue of what one hopes to achieve. • May be set in performance area, i. e. personnel to be trained/recruited etc. • Actions – means or specific activities planned to achieve objectives. • Resources -constraints on course of action -constraints e. g. total cost to be incurred in development of some products. are also important elements of planning process. process Step 2- Identifying & Assessing Conditions Affecting Objectives • Recognize important variables that influence objectivesobjectives– Purchasing power of customers – Actions of competitors – Enemy move etc.
Step 3- Developing A Systematic approach 3To Achieve Objectives • Addresses issues like, • responsibilities for achievement • & includes answers to questions like, – Who will do what? – & how? – on what schedule? – with what results? Do we Need Additional Steps? 4. Implementing Plan (organizing & leading) 5. Monitoring plans Implementation (controlling) 6. Evaluating plans Effectiveness (controlling) (controlling Can there be Barriers To Goal Setting & Planning? • Inappropriate Goals • Improper rewards system • Dynamic & complex environment • Major Barriers • Reluctance to establish goals • Resistance to change • Constraints
Tends to falter without strong, continual commitment from top management Necessitates considerable training or managers Can be misused as a punitive device May cause overemphasis of quantitative goals 2.
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1. 3. 3. 4. 4. Strategic – Management Includes Strategic planning, implementation, & control. Strategic- Planning • It involves decisions made by top management. • Involves ultimate allocation of large amounts of resources such as money, labor, or physical capacity. • Has significant long term impact. • Focuses on orgs’ interaction with external environment.
Strategic Planning • Strategic planning includes those activities that involves defining an org”s mission, setting its objectives, & developing strategies to enable it to operate successfully in its environment. Strategic Planning Strategic Planning Making decisions about the long-term goals and strategies of an organization Strategic Goals Major targets or end results that relate to the longterm survival, value, and growth of the organization Strategy A pattern of actions and resource allocations designed to achieve the goals of the organization The Budgeting Process Management objectives for the organizations.
Sales budget • Forecast of quantities sold • Forecast of dollar income Other income • Interest income • Miscellaneous income Production budget •Units to be produced •Cost of materials •Direct labor costs •Factory overhead Less Marketing Budget •Promotion costs •Selling expenses by territories Administrative expense budget •For each operating department Results in Miscellaneous expense budget •Interest on loans •Other Financial budget • Budgeted balance sheet • Supporting budgets Potential Obstacles to Planning Several Potential obstacles threaten – ability of org to develop effective plans.
One barrier is a rapidly changing environment,- makes planning more difficult because plans must be altered frequently. View among some managers that planning is unnecessary. Org can take several steps to reduce obstacles to planning. One step is conveying strong top mgt support for planning process. Planning staff A small group of individuals who assist top level managers in developing the various components of planning process. Contingency planning is development of alternative plans for use in the event that environmental condition evolve differently than anticipated, rendering original plans unwise or unfeasible.