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Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making. Planning bridges the gap from where we are to where we want to go.
PLANNING
Corrective action
TYPES OF PLANS:
Purposes or Missions: basic function or task of an enterprise Objectives or Goals: the ends towards which activity is aimed Strategies: determination of basic long term objectives of the enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals Policies: general statements or understandings that guide or channel thinking in decision making Procedures: chronological sequence of required action to action a particular task. Rules: are specific required actions/non-actions allowing no discretion Programs: are complex of goals, policies, procedures, rules, task assignments, steps to be taken, resources to be employed and other elements necessary to carry out the operation Budgets: statement of expected results expressed in numerical terms. Fixed budget, variable budget, zero-base budget.
STEPS IN PLANNING
1. 2. 3. 4. 5. 6. 7. 8. Being Aware of Opportunities. Establishing Objectives. Developing premises Determining Alternative courses Evaluating Alternative courses Selecting a Course Formulating Derivative Plans Numberizing Plans by budgeting.
OBJECTIVES:
Objectives are the important ends towards which the Organizational and individual activities are directed. The Nature of Objectives: A Hierarchy of Objectives A Network of Objectives A Multiplicity of Objectives
MANAGEMENT BY OBJECTIVES:
MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed towards the effective and efficient achievement of Organizational and individual Objectives. Emphasis on Performance Appraisal, Motivation, Planning & Control
Benefits of Management by objectives: Improvement of managing Clarification of Organization Encouragement of personnel commitment. Development of effective control Weaknesses of Management by Objectives: Failure to teach the philosophy of MBO Failure to give guidelines to goal setters Difficulty of setting goals Emphasis on short-run goals. Danger of inflexibility Other dangers: concentration in converting verifiable goals in terms of numbers
Strategies, Policies & Planning Premises Strategy refers to determination of the purpose & basic long term objectives of an enterprise and adoption of courses of action and allocation of resources necessary to achieve these aims Policies are general statements or understandings that guide managers thinking in decision making. Planning premises: The anticipated environment in which the plans are expected to operate
Nature: The Key function giving direction to plans The Guide: Furnishing the framework for plans The need for Operational Planning: Tactics They effect all the areas of managing
External Opportunities
SO Strategy Maxi-maxi
WO Strategy Mini-Maxi
Developmental Strategy
External Threats ST Strategy Maxi-mini WT Strategy Mini-mini Retrenchment, liquidation or Joint Venture
DOGS
STRONG
WEAK
EFFECTIVE PREMISING
1. Selection of the premises that bear materially on the programs. 2. Development of alternative premises for contingency planning 3. Verification of the consistency of premises 4. Communication of the premises.
DECISION MAKING:
Decision making is defined as the selection of a course of action among various alternatives. Types of decision making: Rationality in decision making Limited or Bounded Rationality Intuition The importance and limitations of rational decision making: Decision making process: 1. Premising 2. Identifying alternatives/search for alternatives (Principle of the limiting factor) 3. Evaluating alternatives in terms of the goal sought Quantitative and Qualitative Factors Marginal Analysis Cost Effectiveness Analysis 4. Choosing an alternative-3 basic approaches: experience, experimentation, research and analysis
Structured Problems: Programmed decisions (Lowest level) Unstructured Problems: Non programmed decision (Highest level)
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