04- Steps in Planning.ppt
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Planning involves 8 key steps: 1) being aware of opportunities, 2) setting objectives and goals, 3) considering planning assumptions, 4) identifying alternatives, 5) comparing alternatives, 6) choosing an alternative, 7) formulating supportive plans, and 8) quantifying plans with budgets. Planning allows organizations to avoid failures and uncertainties by thinking through opportunities in advance, setting goals, and developing courses of action with supportive resource plans and budgets to increase the chances of success.
04- Steps in Planning.ppt
- 1. The Planning Function Steps in Planning
- 2. Why Do We Plan? We plan because we want to avoid failures and uncertainty The better the planning, the more chances for success Common sayings about planning: “Think before you speak” “Look before you leap” “Think 100 times, cut once” “Proper planning prevent poor performance” 5Ps “Poor planning produces poor performance”
- 3. How things should be done? Thinking Before Doing Doing the Things Evaluating What we did F e e d b a c k
- 4. Steps in Planning Being aware of the Opportunity / Situation Setting objectives or goals Considering planning assumption Identifying alternatives Comparing alternatives Choosing an alternative Formulating supportive plans Quantifying plans by making budgets 1- 2- 3- 5- 4- 8- 7- 6-
- 5. 1- Being Aware of Opportunities Opportunity is an unmet need or an area of dissatisfaction One person’s need is an opportunity for another person It already exists in the external environment We need to do some research to find the opportunities
- 6. Being Aware of Opportunities We do research in light of: The market Competition Customer wants Our strengths and weaknesses (SWOT analysis) While planning you must consider the social, political and economical conditions of your environment
- 7. 2- Setting Objectives or Goals Where we want to be and what we want to achieve and when (SMART objectives) Objectives may be long term or short term Objectives or Goals may be set at all levels In light of the organization’s objectives, we can define objectives for the departments and units we are working in
- 8. Setting SMART Objectives To make a reasonable profit To improve communication To increase productivity To develop better managers To achieve an ROI of 12% at the end of this year To start a monthly newsletter from Nov 1st To increase output by 5% by Dec 31without increasing the current cost of production To design and conduct a training course on leadership skills for all front line managers by Nov 31
- 9. Levels of Goals Strategic goals Tactical Goals Operational Goals Top Management Middle management Low levelMgt
- 10. Strategic, tactical and Operational goals Strategic Goals are linked to the strategic planning of the organization and mark the future that is expected for the company in the next 5 or 10 years. Tactical Goals or planning is an action plan to be undertaken within 1-3 years and must be fully aligned with strategic planning. Operational Goals are closely linked to the processes and operation of the company as a whole. These are assigned to people, that he or she actively contributes to the organization’s strategic objectives.
- 11. 3- Considering Planning Premises Premises are assumptions about the environment in which the plan is to be carried out In what environment internal or external will our plans operate? Forecasting is important in premising i.e. what kinds of market will there be?, what products?, what new machines, skills and technology? etc.
- 12. 4- Identifying Alternatives Looking for all the available alternatives Also search for alternatives which are not apparent at first sight Reducing the number of alternatives Finding out the most promising alternatives to accomplish our plans
- 13. 5- Comparing Alternatives After short listing the alternatives, we evaluate the selected alternatives in light of the organizational objectives and planning premises Every alternative may have its own strengths and weaknesses
- 14. 6- Choosing an Alternative This is the point of decision making We chose the alternative which is most relevant to the organizational objectives, require less resources and bears minimum risk Sometimes, more than one courses of action can be adopted at the same time
- 15. 7- Formulating Supportive Plans Planning does not completes with choosing the best alternative only We need to formulate supportive plans to arrange resources for turning our main plans into actions Example of supportive plans could be planning for traveling arrangements, planning for acquiring financial resources etc.
- 16. 8- Quantifying Plans by Making Budgets Budget is a quantified plan It is a written statement of what sales volume we expect, how much to spend on purchase of equipment, what will be operating expenses, human resource cost and other expenses Budget also tells us what profits we are expecting at the end of operation Each department or unit can make its own budgets in accordance with the corporate budget