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mgt chapter2

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    CHAPTER 2

    PLANNING

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    Definition

    PLANNINGSetting goals and defining the actions necessary to

    achieve those goals

    Planning is concerned with ends(what is to be done) aswell as with means (how it is to be done).

    ALSO known as the process ofsetting goals andcourseof action, developing rules and procedures and

    forecasting future outcomes

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    PLAN

    Methods ofdoing or making something

    and consisting of a goal and a course ofaction.

    Methods devised to achieve an

    organizational goal.

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    Importance Of Planning

    Sense of direction and purpose

    Coordinate managers of different functions

    and division

    Device for controlling managers

    Get managers to participate in decision

    making

    Reduce overlapping

    Resources are effectively and efficiently

    utilized

    Can point out the need of future

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    THE PLANNING PROCESS

    A. Establish objectives

    B. Analyze situation/create planning premises

    C. Determine alternative course of action

    D. Evaluate alternatives

    E. Choose and implement plan

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    OBJECTIVES

    Objectives

    Statement of how an organization intends to fulfil its

    missionmore specific terms and specific time frame

    Importance Provide a direction in which the organization should

    move

    Coordinate the efforts and activities of the members of

    the organization

    Increase motivation among members of the

    organization

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    TYPESOF ORGANIZATIONALOBJECTIVES

    Organizational Objectives The objectives set by top management for the

    company

    Strategic objective-broad general issues E.g. double sales revenue

    Individual Objectives The objectives set for each subordinates to be

    accomplish Operational objectives

    New product for every 5 yrs

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    Types of Plans

    BREADTH TIME SPECIFICITY FREQUENCYOF USE FRAME OF USE

    Strategic Long term Directional Single useTactical Short term Specific Standing

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    STRATEGIC PLANNING

    The process by which an organization makesdecision and takes action to enhance its long

    term performance.

    Strategy A plan that identifies the markets in which an organization

    competes, as well as the ways in which it competes in those

    markets.

    A course of action the explains how an enterprise will move

    from the business it is now to the business it wants to be in

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    Tactical plans Plans that specify the details of how

    an organizations overall objectivesare to be achieved

    Short-term plans

    Plans that cover less than one year

    Long-term plans

    Plans that extend beyond five years

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    Strategic Planning

    Apply broadly to the entire organization.

    Establish the organizations overall objectives.

    Seek to position the organization in terms of its

    environment. Provide direction to drive an organizations efforts

    to achieve its goals.

    Cover extended periods of time.Are less specific in their details.

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    Tactical Planning

    Tactical plans (operational plans)

    Apply to specific parts of the organization.

    Specify the details of how the overall objectivesare to be achieved.

    Cover shorter periods of time.

    Must be updated continuously to meet currentchallenges.

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    Single-Use and Standing Plans

    Standing plans

    A plan that is ongoing and provides guidance for

    repeatedly performed actions in an organization

    Customer satisfaction policy

    Single-use plans

    A plan that is used to meet the needs of a

    particular or unique situation Single-day sales advertisement

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    There are 2 types of operational plans

    Standing plansPlans that deal with organizational issues and

    problems that recur

    Policy general guidelines for decision making within the

    organization. e.g. grade, program etc Procedure plan that specifies how to proceed in a specific

    situation that routinely arises. E.g. ordering supplies

    Rules detailed and specific regulation for action.

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    Single Use PlanA one-time plan specifically designed to meet the need

    of a unique situation. E.g. build a new headquarters

    Program plan that govern a comprehensive set ofactivities designed to accomplish a particular sets of

    goals. Projects plan that direct the efforts of individuals or

    work group towards the achievement of goals

    Budget plan that specify how financial resourcesshould be allocated

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    TYPES OF OPERATIONAL PLAN

    Plan Description

    Single-use plan Developed to carry out a course of action not likely tobe repeated in the future

    Program Single-use plan for a large set of activities

    Project Single-use plan of less scope and complexity than aprogram

    Standing plan Developed for activities that recur regularly over a pe-riod of time

    Policy Standing plan specifying the organizations general

    response to a designated problem or situation

    Standard operating procedure Standing plan outlining steps to be followed in particu-lar circumstances

    Rules and regulations Standing plans describing exactly how specific activi-ties are to be carried out

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    Specific and Directional Plans

    Specific plans

    Plans that have clearly defined objectives and leave no

    room for misinterpretation.

    What, when, where, how much, and by whom (process-focus)

    Directional plans

    Flexible plans that set out general guidelines.

    Go from here to there (outcome-focus)

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    Directional versus Specific Plans

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    MISSION STATEMENT

    A broad declaration of an organizations purpose that

    identifies organizations products and customers and

    distinguishes the organization from its competitors

    It set the strategic direction of an organizationwhy

    we are here & where we going

    It provides a foundation for the development ofbusiness strategy

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    DEVELOPINGMISSIONSTATEMENT

    It should be concise and meaningful Establish a set of primary goals/objectives (sense of direction

    or purpose for the organization & should be realistic)

    Embodied in the minds, habits, attitudes & decisionsof everyone in the company every day

    Must be describe the free primary aspect oforganization Define its business (who are our customers & what

    customers needs are being satisfied)

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    IMPORTANCEOF MISSIONSTATEMENT

    Addresses our basic need for direction.

    Defines the purpose of the organization and the

    values and ethical principles by which membersaspire to live

    Provide a foundation by which the organization

    should operate and create goals

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    BARRIERS TO EFFECTIVE

    PLANNING

    Lack of commitment to planning

    Lack of top management support

    Lack of meaningful objectives of goalsFailure to see the scope of plans

    Rely to much on experience

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    OVERCOMING THE BARRIERS

    TO PLANNING

    Planning must be organized

    Planning must be clear and definite

    Managers must participate in planning

    Encourage strategic thinking


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