Session 10-12 POM.ppt
- 1. Planning & Types of Plans Management by Objectives Strategic Planning Session 10-12
- 2. L E A R N I N G O U T L I N E • Define planning • Types (Levels) of Planning • Strategic Planning • Intermediate Planning • Operational Planning • Planning Process/ Procedure • Barriers to Effective Planning • Planning Premises • Forecasting • Key to Planning
- 3. What Is Planning? • Planning – Planning is the primary function of management. – It focuses on the future course of action. – A primary managerial activity that specifies the objectives to be achieved in future and selects the alternative course of action to reach defined objectives. Thus, it involves: • Defining the organization’s goals • Establishing an overall strategy for achieving those goals • Developing plans for organizational work activities.
- 4. What Is Planning? • “Determination of future course of actions in advance” • It is the blue print of action and operation. • Planning is intellectual process which is concerned with deciding in advance what, when, why, how, and who shall do the work.
- 5. Definitions: • “Generally speaking, planning is deciding in advance what is to be done” -W H Newman • “Planning is deciding in advance what to do, how to do, when to do and who is to do it. Planning bridges a gap between from where we are to where we want to go” -Harold, Koontz and O’Donnel • “Planning is that function of manner in which he decides in advance what he will do. It is a decision making process of a special kind, its essence is futurity.” -Hayness and Massie
- 6. Why Do Managers Plan? • Purposes of Planning – Provides direction – Reduces uncertainty – Minimizes waste and redundancy – Sets the standards for controlling • Benefits of planning • Goal Focus • Minimize Uncertainty • Improve efficiency • Facilitates to Control • Innovation and Creativity • Better Coordination • Ensures Commitment • Aid to Business Success • Brings Systematization
- 7. How Do Managers Plan? • Elements of Planning – Goals (also Objectives) • Desired outcomes for individuals, groups, or entire organizations • Provide direction and evaluation performance criteria – Plans • Documents that outline how goals are to be accomplished • Describe how resources are to be allocated and establish activity schedules
- 8. Plans can be classified as: 8 (5) procedures (6) rules (7) programs (8) budgets (1) mission or purposes (2) objectives or goals (3) strategies (4) policies
- 9. 1. The mission, or purpose, identifies the basic purpose or function or tasks of an enterprise or agency or any part of it 2. Objectives, or goals, are the ends toward which activity is aimed 3. Strategy is the determination of the basic long-term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals 4. Policies are general statements or understandings that guide or channel thinking in decision making 5. Procedures are plans that establish a required method of handling future activities 9
- 10. 6. Rules spell out specific required actions or non-actions, allowing no discretion 7. Programs are a 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 8. A budget is a statement of expected results expressed in numerical terms 10
- 11. Types of Plans
- 12. Types of Plans • Strategic Plans – Apply to the entire organization. – Establish the organization’s overall goals. – Seek to position the organization in terms of its environment. – Cover extended periods of time. • Operational Plans – Specify the details of how the overall goals are to be achieved. – Cover short time period.
- 13. Types of Plans (cont’d) • Long-Term Plans – Plans with time frames extending beyond three years • Short-Term Plans – Plans with time frames on one year or less • Specific Plans – Plans that are clearly defined and leave no room for interpretation • Directional Plans – Flexible plans that set out general guidelines, provide focus, yet allow discretion in implementation.
- 14. Specific Versus Directional Plans
- 15. Types of Plans (cont’d) • Single-Use Plan – A one-time plan specifically designed to meet the need of a unique situation. • Standing Plans – Ongoing plans that provide guidance for activities performed repeatedly.
- 16. Establishing Goals and Developing Plans • Traditional Goal Setting – Broad goals are set at the top of the organization. – Goals are then broken into sub-goals for each organizational level. – Assumes that top management knows best because they can see the “big picture.” – Goals are intended to direct, guide, and constrain from above. – Goals lose clarity and focus as lower-level managers attempt to interpret and define the goals for their areas of responsibility.
- 17. The Downside of Traditional Goal Setting
- 18. Planning in the Hierarchy of Organizations
- 19. Contemporary Issues in Planning • Criticisms of Planning – Planning may create rigidity. – Plans cannot be developed for dynamic environments. – Formal plans cannot replace intuition and creativity. – Planning focuses managers’ attention on today’s competition not tomorrow’s survival. – Formal planning reinforces today’s success, which may lead to tomorrow’s failure.
- 20. Establish objectives Develop Strategies Determination of premises Determination of alternatives Evaluation of alternatives Selecting a course of action Formulation of derivative plans Implantation of plans Reviewing the planning process How does a manager Plan? Planning Process:
- 21. Analyze Opportunities • Not a step of Planning, It is pre-step of planning. • Essential to make a successful plan. • SWOT analysis Setting objectives • First and real starting point of planning. • Management has to define objectives in clear manner by considering organizational resources and opportunities because a minor mistake in setting objectives might affect in implementation of plan. • Objectives must be specific, clear and practical. • They should be time bound and expressed in numerical terms.
- 22. Determination of premises • Premises are the assumptions about the future in which the planning is implemented. • They provide environment and boundaries for the implementation of plan in practical operation. • These premises may be tangible and intangible and external. (a) Tangible and intangible: Tangible premises involve capital investment, unit of production, units sold, cost per unit, time available etc. Similarly, intangible premises involve employees moral, goodwill, motivation, managerial attitude, etc. (b) Internal and external: Internal premises involve money, materials, machines and managements. In the similar manner, external factors involve competitors strategy, technological change, government policy, social and cultural beliefs etc.
- 23. Determination of alternatives • It is essential to identify all the possible hidden alternatives. • The information about alternative courses of action may be obtained from primary and secondary sources. • There must be search for the best alternative. • The management must develop alternatives through the support of experienced and intellectual experts in management sectors.
- 24. Evaluation of alternatives • Evaluate the alternatives from their expected cost and benefits. • This is the logical step to evaluate each alternative from its plus and minus points. • Each alternative is studied and evaluated in terms of some common factors such as risk, responsibility, planning premises, resources, technology etc. Selecting a course of action
- 25. Formulation of derivative plans: • It is essential to formulate action or derivative plans for each step of work and to all departments of the organization. • These action plans involve formulation of policies, rules, schedule and budget to complete defined objectives. • Thus, formulation of derivative plans is an essential step in planning process. • It is difficult to implement main plan without formulation of derivative plan.
- 26. Implementation of plans • Without this step, other this procedure of plan will remain as paper work. • This step brings all the procedure of plan into action. • For implementation plan, management has to take some steps such as to communicate with subordinates who initiate to plan into action; provide necessary instruction and guidance; make arrangement of all resources like materials, machines, money, equipments etc; make timely supervision and control over subordinates. Reviewing the planning process
- 27. Management by Objectives Management by objectives is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organizational and individual objectives 27
- 28. Systems Approach to MBO 28
- 29. Benefits of Management by Objectives Motivate Clear Goals Improve managing through results- oriented planning Clarify organizational roles, structures and the delegation of authority Encourage personal commitment to their own and organizational goals Facilitate effective controlling, measuring results, and leading to corrective actions 29
- 30. Failures of Management by Objectives List some failures and limitations of MBO What would you do to overcome the failures? 30
- 32. What is strategic planning? • A continuous and systematic process • To define how an institution will move, over a period of years, from where it is to where it wants to be • By deciding – institutional directions – intended results – how results are to be accomplished and – how success is to be measured and evaluated
- 33. Why have a strategic plan? • To develop a common understanding within the institution • To explain the institution to outsiders • To present the big picture rather than short term or partial pictures • To seize the initiative rather than simply react • To define goals and objectives • To set priorities, including for resource allocation • To enable activity planning consistent with broad goals and priorities • To provide a basis for institutional evaluation
- 34. What is in a strategic plan? • Situation analysis – what is the external context in which the institution works? • The institution – what is the nature and role of the institution within that external context? • Clear statement of direction – what are the vision, mission and objectives? • Strategies – how will the objectives be achieved? • Evaluation – how will the effectiveness of the institution be assessed?
- 35. What are the key terms? • Vision • Mission (or purpose) • Objectives • Strategies • Activities • Products (or outputs) • Outcomes (or results) • Performance indicators
- 36. Vision • Our dream of the future • What we strive to achieve • The picture of the long term • Related to our institution and its work
- 37. A bad vision statement “A world that is at peace, just, environmentally responsible, economically advanced, culturally diverse and mutually supportive”
- 38. A good vision statement “A society in which human rights are respected, protected and fulfilled”
- 39. Mission • The general statement of purpose guiding our activities • A definition of our mandate – what we are and what we do • Our institution’s particular role in achieving the vision
- 40. A bad mission statement “To be a bank that doesn’t think like a bank. A bank that knows that yesterday isn’t today….and that today becomes yesterday tomorrow” Actual 1997 “Corporate Vision Statement” for a major banking/finance company
- 41. A good mission statement “We achieve our vision through promoting and monitoring human rights compliance and seeking remedies for victims of human rights violations.”
- 42. Objectives • What, in general terms, we actually seek to achieve during the life of this strategic plan • Higher level statements of key institutional goals to be pursued in carrying out the institution’s mission • Should be limited in number, no more than six or seven • Should reflect institutional priorities
- 43. Some possible objectives • To increase public awareness of and support for human rights • To assist and encourage government to ensure that all laws, policies and programs are human rights compliant • To expose human rights violations and assist victims to obtain remedies • To encourage the development of human rights law and mechanisms internationally and domestically
- 44. Strategies • How we seek to achieve our objectives • Operational approaches • Our priorities • Can be linked to the objectives as a whole or to each objective individually • Should reflect institutional priorities
- 45. Linking strategies to objectives Objective: to increase public awareness of and support for human rights Strategies: • Ensure a high media profile for human rights issues • Encourage the development of school curriculum to educate children on human rights • Coordinate community education activities with civil society organizations
- 46. Activities • What we will actually do to implement the strategies • Can be linked to the strategies as a whole or to each strategy individually • Should be at a general descriptive level: – “we will conduct five human rights training programs a year” – NOT “we will conduct five human rights training programs a year on these dates and at these places”
- 47. Products • What we actually produce – publications – reports – media releases – training programs – speeches • Sometimes called “outputs”
- 48. Results • What our activities accomplished – Better knowledge of human rights law among school students – Greater public awareness of key human rights issues in our country – More positive government responses to victims of human rights violations – Well trained human rights advocates and activists • Sometimes called “outcomes”
- 49. Performance indicators • Provide information about the degree to which the actual results of our activities meet the planned objectives • Critical to enable evaluation of the implementation of the plan and of the effectiveness of the institution • Quantitative (how many) and qualitative (how well) measures of performance • Can measure products (outputs) but better to measure results (outcomes)
- 50. Strategic plans and activity plans • Strategic plans and activity plans complement each other • The strategic plan is the big picture plan that guides the institution over several years, setting the broad priorities for action • The activity plan or implementation plan is the annual plan that sets out how the strategic plan will be implemented in the year and what specific activities will be conducted and where and when and how
- 51. A good strategic plan will • Be written down • Be relevant to the institution and its context • Be realistic and not merely idealistic or aspirational • Be easy to understand • Be clear to implement • Have specific time frames over a significant period • Provide clear accountability for implementation • Recognize that things will change and be able to adapt to those changes • Be endorsed by the highest governing body in the institution
- 52. Premising And Forecasting Planning Premises are the anticipated environments in which plans are expected to operate Environmental Forecasting Values and areas of forecasting Forecasting with the Delphi technique What are the typical steps of the technique? 52
- 53. THANK YOU