Planning intoduction and presentation on
- 1. PLANNING
- 2. • Planning is the most basic and pervasive management function. It is undertaken by managers at all levels.Although it is classified as a distinct managerial function, yet it is integrated with all other managing functions and their success greatly depends upon the performance of planning activity.The need for planning arises the very moment a business venture is undertaken, and the success of an organization throughout its lifetime depends on the rigour and thoroughness of the business plan and its optimum execution. • Planning is a systematic attempt to look into the future to foresee opportunities by forecasting the likely possibilities and scenarios at different times, and then devising ways, means and actions to take advantage of them. • This is done with an objective to bridge the gap between the present (the current reality) and the desired future (vision) where an organisation or individual intends to reach.
- 3. DEFINITION • Planning is the fundamental management function, which involves deciding beforehand, what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down an organization’s objectives and develops various courses of action, by which the organization can achieve those objectives. It chalks out exactly, how to attain a specific goal. • Planning is nothing but thinking before the action takes place. It helps us to take a peep into the future and decide in advance the way to deal with the situations, which we are going to encounter in future. It involves logical thinking and rational decision making.
- 6. STEPS INVOLVED IN PLANNING
- 7. Environmental Scanning: Recognition of Opportunities Determini ng planning premise Forecasti ng outcomes and events Determinat ion of objectives Searching alternative courses of action for achievement of objectives Evaluating alternative s Choosing alternativ e(s) Implement ation of plan Review and revision
- 9. • Direction Setting: Planning sets the direction for the entire organization as well as for the important functions of management. • A holistic picture of consequences: Planning assesses in advance the impact of a plan on the organisation and the people within it, and on different stakeholders outside the organisation. It also evaluates whether the effort, cost and implications of implementing a plan are beneficial to the organisation.Thus, planning clarifies to a practising manager to a great extent the consequences and valid justifications of different actions to be undertaken in the future. • No haphazard actions: Planning is the process by which a manager can determine whether he/ she should attempt the task or not. It helps in developing a precise detail of who, what, when, where, why and how of the task. In this way, it avoids haphazard action. Through proper planning, appropriate and properly coordinated actions, relating to a task, can be planned in advance. • Economy in operations: Planning helps in making the judicious use of available resources through their efficient utilisation. Effective results can be produced with least cost with the help of proper planning. It determines the means that would help in optimum realisation of the goals and objectives of the orgtanisation.
- 10. • Minimising risks and uncertainties: Future is uncertain and planning makes an attempt to minimise the uncertainties associated with future activities by trying to comprehend different future scenarios. It helps in formulating different action plans to face the uncertainties in a manner that would not adversely affect the organisational objectives. • Estimation of the needed resources: Planning makes the manager aware of the resources that will be needed in the near future.This helps the manager arrange the required things in time so that the project does not fail or suffer due to the lack of resources that would be required to implement a particular plan. Planning also helps in developing contingency plans to cope with the lack of resources or changes in the business environment. • Better decision-making:A systematically undertaken planning can improve the quality of decision-making because it takes into account all factors, and helps in focusing on the critical ones. Planning ensures that the manager is aware of the priorities with respect to the actions to be performed. It also helps the manager understand the implications of what he/she wants to do and whether he/she is prepared for all the reasonable eventualities of his/her actions.
- 11. • Promotion ofTeamwork: Planning forms the basis for facilitating teamwork by assigning different tasks and responsibilities to different individuals. • Provision for Control: Planning helps in developing appropriate control mechanisms with respect to standards, acceptable quality levels, timelines, cost control, reporting, etc. In the absence of planning, controlling action may not be possible. Control mechanisms help in proper implementation of a plan to achieve desired goals. • Technological Development:Through planning, the organisation can assess appropriate technological requirements and also develop plans for the integration of a technology into the business in an efficient manner with least amount of resistance.
- 13. • Lack of Accurate Information:The quality of planning depends on the relevance and accuracy of the information that is available with the concerned manager. Precise and accurate information is generally not available for strategic and long-term planning.Therefore, plans developed on the basis of inaccurate or inadequate data may not produce optimum results. • Time-consuming Process:The more detailed is the planning, the greater is the time consumed. Managers may spend an excessive amount of time in securing information and decision-making in order to increase the accuracy of planning. This can lead to a delay in the plan implementation, which can result in the loss of opportunities. • Expensive: Gathering of information and testing of various courses of action can involve a large amount of money.As a result, many organisations, particularly the small ones, are unable to afford a formal planning programme. Planning should be undertaken only to the extent to which the accuing benefi ts justify the costs involved.
- 14. • Inflexibility: Planning may cause internal inflexibility in the organisation because once a plan is accepted, the focus of the entire organisation would be to go exactly in accordance with the plan.This limited approach may stifle innovation and creativity. This is the reason that small startups with flexible planning are able to challenge large and well-established organisations that have formal planning procedures. • Environmental Constraints: Managers hardly have any control over changes in the external environment of their organisation.These environmental factors are diffi cult to be predicted accurately. For example, it is difficult to predict the government policies. In the present-day scenario, when change is happening at an accelerating pace, even the best of plans can fail. • False Sense of Security:A manager may believe that once a plan has been prepared, its implementation will go smoothly. It may not necessarily be the case. If a plan is not reviewed and revised periodically, it may hinder or delay successive processes. • Capital Invested in Fixed Assets Limits Planning: If an organisation has made significant investments in the fixed assets, it puts a limit on the future planning and actions.
- 16. CORPORATE PLANNING • Corporate planning is a strategic process that involves defining an organization's objectives and developing plans and policies to achieve them. • It is typically carried out through the top-level management of the company. To create a foolproof corporate plan, the organization must collect sufficient data about their company and gain insights into their competitor’s business model. Key aspects of corporate planning include strategic vision, which involves setting long-term goals and defining the steps needed to reach them1. • Benefits of a well-developed corporate plan include: • Improved decision-making • Better resource allocation • Increased efficiency • Improved communication • Better risk management
- 17. FUNCTIONAL PLANNING • Functional planning involves developing and documenting detailed plans to achieve objectives set at higher organizational levels. It includes specifying how resources will be used to support activities in each functional area, such as marketing, production, human resources, finance, and information technology. • To create a functional project plan, follow these steps: • Define your goals and objectives. • Define the project's scope and stakeholders. • Plan your budget and resource use. • Set a realistic timeline. • Select templates for project management
- 18. Corporate strategy defines the direction of the business and what it wants to achieve, while functional strategy explains how to support the execution of corporate goals and objectives1. Functional strategy is the most detailed and involves departmental goals as well as big-picture corporate and business goals.
- 19. STRATEGIC PLANNING • Strategic Planning consists of the process of developing strategies to reach a defined objective. It sets the long-term direction of the organization in which it wants to proceed in future.According to Anthony it can be defined as the “process of deciding on the objectives of the organization, on changes on these objectives and on the policies that are to govern the acquisition, use and disposition of these resources.” • Examples of strategic planning in an organization may be; planned growth rate in sales, diversification of business into new lines, type of products to be offered and so on. Strategic planning also involves the analysis of various environmental factors specifically with respect to how organization relates to its environment.
- 20. TACTICAL PLANNING • Tactical planning is defined as the process of taking an overarching strategic plan and creating actionable short and medium-term timelines to achieve your goals.Tactical planning usually helps define goals at multiple levels and can help break down long-term strategic objectives into benchmarks that can be reached in smaller and more focused projects. Alignment is important for creating effective goals, and tactical planning is a key step to achieving alignment throughout a strategic vision. • Tactical planning usually involves a couple of key steps, including creating goals, dividing responsibility, funneling resources, creating a timeline, and assigning specific tasks. Creating goals is a key part of the tactical planning process, and teams traditionally seek to create SMART goals to help fuel their success. Setting SMART goals allows organizations to increase efficiency and productivity for teams by creating clear, attainable goals for any size project. SMART goals stand for:
- 21. • Specific: Goals should be very specific to help people focus their efforts on completing their tasks. • Measurable: Measurable goals allow people to track their progress and define the course to success. • Achievable: Goals need to be realistically achievable to keep teams moving forward and maintain team confidence. • Relevant: Make sure the goal matters to the team and reflects the priorities of the overarching strategy. • Timely:Timelines help teams stay on track and create predictable project cycles
- 23. • Meaning of Planning Premises: • The process of planning is based upon estimates of future.Though past guides the plans in present, plans are made to achieve the goals in future. Therefore, forecast of future events leads to efficient plans. Since future events are not known accurately, assumption is made about these events.These events may be known conditions (changes in the tax laws as announced in the budget) or anticipated events which may or may not happen (entry of competitor in the same market with the same product). • Though these assumptions are primarily based on scientific analysis and models, managers also use their intuition and judgement to make assumptions about future events. Identifying the factors (assumptions) that affect plans is called premising and the methods used for making premises are called forecasting.
- 24. • The forecast or the assumptions about future which provide a base for planning in present are known as planning premises.They are “the anticipated environment in which plans are expected to operate.They include assumptions or forecasts of the future and known conditions that will affect the operation of plans. • The estimates about future markets, consumer preferences, political and economic environment are the planning premises on which business plans are developed but if plans are made and their efficiency is judged in terms of future market demands, revenues and costs, they are mere expectations of plans. Such plans provide planning premise for other plans.
- 25. 1. INTERNAL AND EXTERNAL PREMISES: • Internal premises originate from factors within the enterprise.They relate to premises about the company’s internal policies and programmes, capital budgeting proposals, sales forecasts, personnel forecasts (skills and abilities of personnel) etc.These premises may be strengths or weaknesses of the organization. • External premises originate from factors outside the organisation. These are the indirect- action environmental factors (social, political, technological etc.) which affect the organisation. They are also non- controllable premises beyond the control of the organisation.The external environmental factors represent opportunity or threat to the organisation.
- 26. 2. CONTROLLABLE, SEMI-CONTROLLABLE AND NON- CONTROLLABLE PREMISES: • Controllable premises are within the control of a business enterprise, such as, men, money, materials, policies, procedures, programmes etc. They can be controlled by a business enterprise to ensure better sales of products. Such premises are usually internal to the business. • Semi-controllable premises are those which can be partially controlled by a business enterprise like, labour position in the market, prices of the product, market share of the company etc. For instance, increase or decrease in the price of the product is neither totally controllable nor non-controllable by the managers.
- 27. • The extent to which prices can be increased or decreased depends upon market sentiments, prices charged by competitors, cost structure of the company etc.Thus, change in prices can be controlled but subject to constraints of the variables that affect the price of the product. Similar is the case with change in wages paid to the labour or labour turnover (labour turnover is greatly affected by the wages offered by other companies. • Non-controllable premises lie beyond the control of the business enterprise. Wars, natural calamities and external environmental factors (economic policies, taxations laws, political climate etc.) are the non-controllable premises.These premises are usually external to the business.
- 28. 3. TANGIBLE AND INTANGIBLE PREMISES: • Tangible premises can be estimated in quantitative terms like, production units, cost per unit etc. For example, production forecast and sales forecast can be expressed in monetary terms. How many units of product A can be sold in a year and, therefore, produced, how much raw material is needed for production can be estimated in units and monetary terms. • Intangible premises cannot be quantified, for example, goodwill of the firm, employer-employee relationships, leadership qualities of the managers, motivational factors that affect employees’ performance etc. Though the planning premises have been classified as above, this classification is not mutually exclusive.
- 29. • Different types of premises tend to overlap each other. For instance, internal premises may also be controllable (organisational policies) and tangible premises (cost of product), external premises can also be non-controllable premises (economic policies). • External premises can also be tangible (rate of inflation) or intangible (value system of the society). Therefore, various types of planning premises have to be viewed in the context in which they need to be used in making the plans.
- 30. DECISION MAKING
- 31. • Decision-making in the context of business management is usually not that easy because sometimes all the alternatives under consideration appear to be good or the available information is not sufficient to make a decision or the uncertainty associated with a decision is significant and/or the stakes are quite high. For example, the managing director of a company has to decide whether to revive a sick textile unit by modernising its plant and machinery or to sell it in its existing state. It becomes very difficult to decide if both the alternatives have some strong advantages. • The ability to make effective decisions is extremely vital to lead a group of individuals effectively. If one can learn the art of making effective decisions, then one can lead a team or an organisation to a spectacular and well-deserved success. However, if one has qualms while making decisions or makes poor decisions then one brings one’s team or organisation closer to failure. Besides, one’s time as a leader is also likely to be shortened significantly.
- 32. • Definition: Decision Making is the cognitive process of selecting a course of action, out of a set of available alternatives, so as to achieve the goals of the organization. • It is an indispensable part of the management, as decisions are made at each level by the management executives. • Decision-making refers to the act or process of making choices or decisions, especially when done collaboratively with a group of people. It encompasses evaluating options, considering consequences, and ultimately arriving at a course of action. Whether it’s in business, politics, or everyday life, decision-making plays a crucial role in shaping outcomes and determining our path forward.
- 33. • Process of Decision Making Responding to a Problem Search for Alternatives Evaluation of Alternatives Selecting Suitable Alternative Implementation, Monitoring and Feedback
- 34. INDIVIDUAL VS. GROUP DECISION- MAKING
- 35. Individual Decision Making Group Decision Making Nature of problem When more creativity and efficiency are required When verity of expertise require. Time Availability Less time consuming If sufficient time, than only suitable as it is time consuming Quality of Decision Unless expertise less quality More quality decision Climate of Decision making Competitive climate Supportive Climate Legal Requirement As per the Government guidelines As per the Government guidelines
- 36. • Positive Aspects of Group Decision Making • Pooling of Knowledge and Information • Satisfaction and Commitments • Personal Development • More Risk Taking • Negative Aspects of Group Decision Making • Time Consuming and Costly • Individual Domination • Problem of Responsibility • Group Think