planning (chapter 4)

8/8/2019 Planning (Chapter 4)

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Planning Planning 1.³1.³ Planning is the gap betweenPlanning is the gap between

where we are and where we want towhere we are and where we want togo´go´

2.³planning is deciding the best2.³planning is deciding the bestalternative among others to performalternative among others to performdifferent managerial functions.´different managerial functions.´



NATURE««««NATURE««««

F uturisticF uturisticPurposivePurposive

IntellectualIntellectualPrimaryPrimaryPervasivePervasive

continuouscontinuous



Purpose/importancePurpose/importance

G ives direction to organizationG ives direction to organizationReduce the impact of changeReduce the impact of change

Establish a coordinated effortEstablish a coordinated effortTackling complexities of businessTackling complexities of businessEffective controlEffective control

Effective utilisation of resourcesEffective utilisation of resourcesAvoiding business failuresAvoiding business failures



S teps/processS teps/processD efine missionD efine missionAnalyze strengthsAnalyze strengthsAnalyze weaknessAnalyze weakness

Identify opportunitiesIdentify opportunitiesIdentify threatsIdentify threatsSet goalsSet goalsSet objectivesSet objectivesD evelop tacticsD evelop tacticsD evelop operationsD evelop operationsMonitor planMonitor plan



Ty pes of PlanTy pes of Plan

L ong range & short range.L ong range & short range.

StandingStanding plans(objectives,policies,strategies,rules,proce plans(objectives,policies,strategies,rules,procedure,mission).dure,mission).

Single use plans(Budgets,targets).Single use plans(Budgets,targets).



D iff b/w standing and singleD iff b/w standing and single

S TAN DI NG PL AN SS TAN DI NG PL AN S SI NG L E US E PL AN SSI NG L E US E PL AN S

1.Made to meet a situation1.Made to meet a situationrecurring in a nature.recurring in a nature. 1.Made to meet specific1.Made to meet specificsituation.situation.

2.It used again.2.It used again. 2.Used only for fixed2.Used only for fixed purpose. purpose.

3.Bring uniformity & unity3.Bring uniformity & unityin organization.in organization.

3.Ceases to exist after its3.Ceases to exist after its purpose is achieved. purpose is achieved.



S trategic plansS trategic plans : D eveloped by top: D eveloped by topmanagement.,3 to 5 years or more.management.,3 to 5 years or more.

T actical plansT actical plans : Support implementation of the: Support implementation of thestrategic plans,tactical plans tend to be morestrategic plans,tactical plans tend to be morespecific, the time horizon in range 1 to 3 years.specific, the time horizon in range 1 to 3 years.O perational plansO perational plans : support to implement: support to implementtactical plans,less then 1 year.tactical plans,less then 1 year.



O bjectives «.. /G oalsO bjectives «.. /G oals

*O bjectives are concrete goals that the*O bjectives are concrete goals that theorganization seeks to reach,for example anorganization seeks to reach,for example anearning growth rate«««««««..earning growth rate«««««««..

*O bjectives should be challenging but*O bjectives should be challenging butachievable.achievable.

* Also should measurable ,so that company can* Also should measurable ,so that company canmake correction as needed.make correction as needed.



Nature of objectives ««.Nature of objectives ««.

Every org. has an objective.Every org. has an objective.May be broad or specific, wide or narrow, for May be broad or specific, wide or narrow, for

long term or short term.long term or short term.O rganizations may have multiple objectives.O rganizations may have multiple objectives.O bjectives can be changed; old objectives areO bjectives can be changed; old objectives are

replaced by new ones.replaced by new ones.



G uidelines for setting objectives:G uidelines for setting objectives:

O bj. must be clearly specified.O bj. must be clearly specified.O bj. must be set taking in to account the variousO bj. must be set taking in to account the variousfactor affecting their achievement.factor affecting their achievement.O bj. should be consistent with organisational mission.O bj. should be consistent with organisational mission.Should be rational.Should be rational.Should be achievable.Should be achievable.

Should be yield specific result.Should be yield specific result.Should be periodically reviewed.Should be periodically reviewed.



S teps in the MB O process:S teps in the MB O process:

Ex plain goals for departmentO r group in joint meeting .

Agree on objectives for ne xtplanning period with eachemplo yee individuall y.

R eview results for periodand establish goals for ne xt period .

begin process again

R eview subordinateobjectives



D ifference Between G oals &D ifference Between G oals &

objectivesobjectives1. Time frame : O bjectives are timeless.1. Time frame : O bjectives are timeless.G oals are temporal & time phased.G oals are temporal & time phased.

2.Specificity : O bjectives are stated in broad, goals are2.Specificity : O bjectives are stated in broad, goals aremuch more specific. for ex :Achievement of 10 %much more specific. for ex :Achievement of 10 %growth in the net sales in the next year, this is goals.growth in the net sales in the next year, this is goals.

3.F

ocus: G

oals are more internally focused.3.F

ocus: G

oals are more internally focused.



SW O T SW O T

STREN G THSTREN G TH

WEAKNESSWEAKNESS

O PPO RTUNITYO PPO RTUNITY

THREATTHREAT



P O RTF O L I O /BC G matri xP O RTF O L I O /BC G matri x

1.STAR(High growth rate ,high market share)1.STAR(High growth rate ,high market share)

2.CASH C O W( L ow growth rate,high market share)2.CASH C O W( L ow growth rate,high market share)

3.DOG S(L ow growth,low market share)3.DOG S(L ow growth,low market share)

4.Question marks(high growth,low market share)4.Question marks(high growth,low market share)



Premising & F orecastingPremising & F orecasting

³planning premises are the anticipated³planning premises are the anticipatedenvironments in which plans are expected toenvironments in which plans are expected tooperate. They include assumptions or forecastsoperate. They include assumptions or forecastsof the future& known conditions that willof the future& known conditions that willaffect the plan´affect the plan´

Premises can be :Premises can be :

1.External premises1.External premises2.Internal premises2.Internal premises



F orecastingF orecasting

F orecasting is the process of estimation inF orecasting is the process of estimation inunknown situations.unknown situations.

1.QUANTITATIVEFO

RECASTING:

1.QUANTITATIVEFO

RECASTING:

a.a. TimeTime--series methodsseries methods b. b. Causal methodsCausal methods

* Regression, co* Regression, co- -relationsrelations



2.Qualitative««««or technological2.Qualitative««««or technologicalforecastingforecasting

3. Judgmental forecasting3. Judgmental forecasting



Cont «««..Cont «««..

³planning can³planning can- -not eliminatenot eliminaterisk, but minimize it´risk, but minimize it´

planning (chapter 4)

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