2nd Presentation IBM

Planning in Organizations
Dr Ali Sajid
30-9-2010

Management is like writing in the snow. You've got to keep repeating the message over and over.

 Management's goal should be to do everything in their power to help others be as successful as possible.

Management succeeds only when the rest of the organization succeeds.

Management's Task is not to Control or be a Corporate Cheerleader or Crisis Handler; it is to Encourage Experimentation, Create a Climate for Open Communication, Promote Constructive Dialogue & Give Employees License to Expose Failures & Promote Dissent.
- Nick McGill and John Slocum, Organizational Dynamics

For a manager to be Perceived as a Positive Manager, they need a four to one positive to negative contact ratio.
- Ken Blanchard

Since managers are no longer the guardians of the knowledge base, we do not need the Command-Control Type Executive.
- Shoshana Zuboff

We used to think that the manager's job was to know all the answers. But the new manager ought to know the questions, to be concerned about them and involve others in finding answers. Today's manager needs to be more of a facilitator - someone skilled in eliciting Answers from others Sometimes from People who do not even know what they know.
- J. Naisbitt & P.Aburden

 The assets of most businesses walk out of the door at the end of each day. The challenge to management is to Create an environment which will Motivate them to want to return the next day.
- Lynn Yates, modified by Grant Bright

Managers are people who do things right; leaders are people who do the right thing.
- Warren Bennis

The old style manager puts the megaphone to his or her mouth, The new style manager puts the megaphone to his or her ear.

People perform better for managers, who are not interested in production alone, but who Express interest in their Employee's Welfare, keep in touch with them, & are approachable.

Maintain a Positive Attitude at work: Ask employees what they enjoy about their work. Too often, conversations center too much on mistakes and problems. When you ask. "What did you like about that last project?"

You encourage employees to become conscious of how to get Satisfaction from work. And they may think of ways to do their Jobs Better.

Unfortunately, some companies worry more about Broken Machines than they do Broken People.

Half the harm that is Done in this world is due to People, who want to feel important.
- T.S. Eliot

If you want to manage somebody, manage yourself. Do that well and you'll be ready to stop managing. And start leading.

Every manager/ Leader should be a CEO: Chief Empowerment Officer.

Think about the Qualities of the Best Managers you ever worked for. You'll find that most of them: - Were approachable & easy to talk to - Rarely became overexcited or flew off the handle - Didn't let a few problems poison their whole outlook took a friendly, pleasant, positive approach - Showed consideration for the feelings of the people who worked for them

There's no reason that work has to be done with seriousness.... Professionalism can be worn lightly. Fun is a stimulant to people. They enjoy their work more and work more Productively.
Herb Kelleher, CEO, Southwest Airlines

Lead with your heart (leadership.) Guide with your head (management.)
- Jim Cathcart

 The main challenge for information age corporations is the retraining of manager, not the retraining of workers.
- John Naisbitt

The only real disability in life is a: Bad Attitude.

Where there is an open mind, there will always be a frontier

Good fortune is what happens when opportunity meets with Planning.

Thomas Alva Edison (1847-1931)

When Planning for a year, Plant Corn. When Planning for a decade, Plant Trees. When Planning for Life Train & Educate People.
Chinese Proverbs Quotes

Planning is bringing the future into the present so that you can do something about it now
Alam Lakein

Let our advance worrying become advance thinking & planning

Winston Churchill

Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, N focused effort.
Paul J. Meyer

If anything is certain, it is that change is certain. The world we are planning for today will not exist in this form tomorrow.
Philip Crosby

Failing to plan is planning to fail

Proverb Quotes

 Without leaps of imagination, or dreaming, we lose the excitement of possibilities. Dreaming, after all, is a form of planning.
Gloria Steinem

Good fortune is what happens when opportunity meets with planning.

Thomas Elva Edison

Being busy does not always mean real work. The object of all work is production or accomplishment and to either of these ends there must be forethought, system, planning, intelligence, & honest purpose, as well as perspiration. Seeming to do is not doing.
Thomas Elva Edison

Meekness: Uncommon patience in planning a revenge that is worth while.

Ambrose Bierce

Success is blocked by concentrating on it and planning for it... Success is shy - it won't come out while you're watching.
Tenessee Williams

Leaders who are not planners are simply caretakers and gatekeepers." ~
Perry Smither

 Planning ahead is a measure of class. The rich and even the middle class plan for future generations, but the poor can plan ahead only a few weeks or days.
Gloria Steinem

Good plans shape good decisions. That's why good planning helps to make elusive dreams come true. Anonymous

 Think ahead. Don't let day-to-day operations drive out Planning.

Donald Rumsfeld

Strategic Planning for the future is the most hopeful indication of our increasing social intelligence.
William Hastie

 Create a definite plan for carrying out your desire and begin at once, whether you ready or not, to put this plan into action.
~ Napoleon Hill

Bite off more than you can chew, then chew it. Plan more than you can do, then do it.
Anonymous

Good plans shape good decisions. That's why good planning helps to make elusive dreams come true.
Anonymous

Plans are only good intentions unless they immediately degenerate into hard work.
Peter Drucker (1909 - 2005)

When we are Planning for posterity, we ought to remember that virtue is not hereditary
By; Thomas Paine

It is a bad plan that admits of no modification.

Publilius Syrus (~100 BC), Maxims

No-one gets an iron-clad guarantee of success. Certainly, factors like opportunity, luck and timing are important. But the backbone of success is usually found in oldfashioned, basic concepts like hard work, determination, good Planning & perseverance.
By: Mia Hamm

 He who every morning plans the transaction of the day and follows out that plan, carries a thread that will guide him through the maze of the most busy life. But where no plan is laid, where the disposal of time is surrendered merely to the chance of incidence, chaos will soon reign.
Victor Hugo (1802 - 1885)

Plans are only good intentions unless they immediately degenerate into hard work.
Peter Drucker (1909 - 2005)

Even the longest journey begins with a single step.

Chinese Proverb

Planning is bringing future into present so that you can do something about it now
- Alan Lakein

What many mgrs fail to recognize is that Effective Planning is good investment & is less costly to org than No planning at all.

Nature & Importance of Managerial Planning

All mgrs must plan. Planning is intellectual activity & Maj component of managerial task. Planning is Futuristic Activity directed toward anticipating, predicting, & dealing with change.

Planning Functions.

A set of related steps by which mgt determine What is to be done & How it will be done?

It is process by which mgr anticipate future developments & identify courses of action necessary to achieve organizational & divisional objectives

Planning Planning is always a staff functionmgrs does not recognize its importance.

Hesitant to perform & seek out planning tasks because most silent aspect of Planning is that it is Iterative Process.
Check & recheck. Tedious process- & no one enjoys tedium.

Focus of Planning
Planning focus on future, what is to be accomplished and how? Objectives for future & Appropriate means for achieving these objectives. Outcome of Planning function is plan

Plan - A written document that specifies courses of action firm will take.

Planning
Process of Establishing Objectives & determining how best to achieve them.
Defining Orgl objectives or goals, Establishing overall strategy for achieving these goals & Developing a Comprehensive hierarchy of plan to integrate & coordinate activities.

 Specific Benefits of Planning: Coordinating efforts Preparing for change Developing performance standards Developing managers

The Importance of Planning

Why is Planning So Important?

To coordinate efforts

To prepare for change

To develop managers

To develop performance standards

Considerations Required When Managers Initiate Planning

Determine the priority of objectives Establish time frames for objectives Resolve conflicts among objectives Create measurements for objectives

Managers Must:

Managers Means of Implementing Plans

Managers Authority

Managers Persuasion

Organizational Policies

Implementation of Plans

In what Time Frame Do Plans Exists?

Short-Range Plans, from a day to an year Intermediate Range Plans, 1 to 3 years Long Range Plans, 3 to 5 years, also called: Strategic Plans, Plans differ from org to org

PLANS ACCORDING TO EXTENT OF RECURRING USE

Programs Single-Use Plans Projects

Organizational Plans

Budgets

Policies Standing Plans

Standard Operating procedures

Rules

Levels of Plans
Strategic Plans
Detailed action steps mapped out to reach strategic goals Tactical Plans Means charted to support implementation of the strategic plan & achievement of tactical goals Operational Plans Means devised to support implementation of

tactical plans and achievement of operational goals.

Single Use Plans Aimed at achieving a specific goal that, once reached, will most likely not recur in future.

Program A comprehensive plan that coordinates a complex set of activities related to a major nonrecurring goal that coordinates: A set of limited Scope activities that need to be divided into Several major projects in order to reach a major nonrecurring goal.

Levels of Plans
Standing Plans: Provides: Ongoing guidance for performing recurring activities Policy A general guide that specifies that broad parameters within which organization members are expected to operate in pursuit of organizational goals.

Service A document specifying behaviors that will maintain Good

Standard of Service, Employees urged to maintain positive eye contact, use roper vocabulary with guests (e.g.,Good Morning, Certainly, lll

be happy to, , My pleasure)

 Procedure A prescribed Series of related steps to be

taken under certain recurring circumstances.

Well-established & formalized procedures -

called Standard Operating Procedures (SOPs).

Rule A statement that spells out specific actions

to be taken or not taken in a given situation

Planning Process

Step 1-Setting Objectives

Setting Objectives: Addresses issue of what one hopes to achieve. May be set in performance area, i.e. Personnel to be trained/recruited etc. Important elements of Planning process. Actions - means or specific activities planned to achieve objectives. Resources -Constraints on Course of Action e.g. Total cost to be incurred in development of some products.

Step 2- Identifying & Assessing Conditions Affecting Objectives

Recognize imp variables that: Influence Objectives Purchasing Power of Customers & Actions of Competitors, Enemy move etc.

Step 3- Developing A Systematic Approach To Achieve Objectives

issues like, responsibilities for achievement & includes answers to questions like: Who Will do what?
& How? On What Schedule? With What Results?

Additional Steps
4. Implementing Plan (organizing & leading) 5. Monitoring Plans Implementation(controlling) 6. Evaluating plans Effectiveness (controlling)

Practical Classification of Plans

Mgrs use by their type & Contents would involve:

Duration of plan Function or use Breadth or scope

By Duration
Short-range Plans: Cover actions to be completed over short time periods, & long-range plans cover longer time period. Long-range: Usually done at upper-mgt levels, while shot-range planning takes place chiefly on lower levels of organizational structure. Standing plans or repeat-use plans -usually longrange plans. Used over & over again to help guide behavior of members of org.

By Function

Developed for key orgal functions:

Defense Manufacturing Finance Engineering R&D

Assist mgt in understanding interactions among

major areas of operations. Help in spotting Potential Conflicts & Problems & in dealing with them.

By Breadth or Scope

Major Types :

Objectives, Policies, Procedures, Methods, & Rules.

These are also common examples of standing plans.

How To Plan- (Action Planning Model) Action Planning Model: Has eight phases or steps. Objectives Tasks Human resources Facilities & resources Procedures for implementation Cost estimates Time schedule Follow up & review

Objectives
First step -to identify purpose of Planning. Setting objectives in concrete form helps to determine direction of plan. Good objective should be Achievable Measurable Operational-not abstract

Tasks

After objective, determine tasks to be done. What do you need to do to achieve these objective.

Human Resources
Determine people, who should be involved in furthering plan. Answer following questions, Who will authorize plan? Who will have to coordinate in plan? Who will develop plan? Who will approve plan? This phase relates to manning of plan (who)

Facilities & Resources

Review other resources & facilities needed for implementing plan. Resources will vary, depending on nature of project involved. List available resources for production plan
Raw material Fitting & supplies Production equipment Auxiliary equipment Standby equipment Handling equipment Packing materials

Procedures For Implementation

Determine methods to be employed for putting plan into action- for Executing plan. Actual implementation of plan & what it will take to get plan moving. Strong interrelationship among different phases of planning process, objectives, resources & methods & means to be employed.

Cost Estimates
Determine cost estimates or budget of plan. Cost considerations are prime factors in all plans. Should be utmost concern to getting job done most efficiently, effectively & on time. Within budget & resources you have.

Time Schedule Set up timetable for planned operations.

Specific dates & deadlines.

Drawn up for various phases of plan. Deadlines must be realistic

Follow-Up & Review

Establish Built-in Control Mechanisms for follow-up & control. Ensure up to date info abt: Status of Plan & Progress reports: So that necessary adjustments can be made on time.

Barriers To Planning & What To Do About It? Most common barriers

Mgt ego & attitude

Time& cost Intellectual activity Clarity of objectives Inadequate information Mgt philosophy & external forces

Mgt Ego & Attitude

Business failures & poor decisions are rarely result of too much planning. Mgt ego to say-

I dont need plan, I am sure I can handle whatever develops

Time & Cost

Basically a Tool to Preventive Action, Pay offs of Good Planning are far Greater than Costs.

Intellectual Activity

Essentially mental activity but many mgrs are more comfortable in Taking action than in Thinking Abt Problems.
Find it difficult to deal with Abstractions & Think conceptually in terms of: Models & Relationships among complex variables in Hypothetical Situations. Mgrs -subject to constant pressures & demands on their time to point that they do not have any time left for real, uninterrupted thinking, let alone planning.

Clarity of Objectives

Obstacle to Better Planning is: Lack of clear obj & Sharp definition of problems toward which planning is being directed. Worse when: Problems & Obj Not only unclear, but also wrong.

Inadequate Info Having too Much, too Little, or Wrong info can be barrier to Planning Process. Getting right info, in right amount at right time Prerequisite for Effective Planning. Fundamental Roles mgrs assume is: Informational Role.

Mgt- Philosophy & External Forces

Major determinant of Effectiveness of Planning Process: Values, Philosophies & Attitudes of Top mgt towards Planning Activity.

Mgrs should understand Orientations, Biases & Value Judgments Of Key Mgrs & Executives. Enables them to Deal with Potential interdepartmental conflicts.

 While Attitudes of all mgrs affect planning process, external forces are of equal importance. Mgrs must seriously consider Them in Planning.

Strategic Planning
Systematic, formalized effort of org to establish basic Orgl purposes, objectives, policies & strategies to achieve obj & basic company process.
It is actually process whereby corporate obj for future are identified in response to perceived opportunities & threats, whereby activities are selected & resources allocated to meet these objectives.

Recognize Causes of Managerial Failure

Managerial failure in planning is caused by several factors.

Failure to consider each of: People whom mgrs plan will affect. Failure to mgr to provide alternative options in case original plan is not adopted. Failure of Mgr to Anticipate Change. Unwillingness of Mgr to Take calculated Risks. Risk taking always associated with planning, integral part of mgt. Contd

Recognize Causes of Managerial Failure

5. Mgrs failure to Establish Priorities. 6. Mgrs failure to make Plans known to those involved. 5. Failure to establish appropriate measurements when plan is prepared.

Ten Commandment for Effective Planning

1. Review & incorporate policy guidelines into planning process. 2. Policy determination should precede planning. 3. Marshall organizational resources such as info, people, capital, & equipment specifically for planning. 4. Recognize budgeting as both Planning & control process. 5. Consider time element in planning. 6. Involve people, who are affected by plan in planning process.

Ten Commandment for Effective Planning

6. Define task assignments, delegations of authority & responsibilities for individuals for individuals involved. 7. Develop priorities among various plans put into actions. 8. Be prepared to resolve conflicts arising during plan implementation. 9. Put plans in writing this p will improve planning itself, action. Incorporate reasoning in every plan. 10. Maintain plans through specific review & control processes. Provide for appropriate monitoring & evaluation by setting deadlines & making necessary changes.

Major Components of Planning

Goal. A future target or end result that an org whishes to achieve. Plan the means devised for attempting to reach a goal. Mission The org purpose or fundamental reason for existence Mission Statement A broad declaration of the basic, unique purpose and scope of operations that distinguish the org from others of its type.

The Overall Planning Process

Mission

Goals

Plans

Goal Attainment (organizational Efficiency & Effectiveness)

Mission
An orgs mission statement contains an outline of orgs beliefs or general guidelines that it will use in pursuing its mission, sometimes referred to as company creeds.

Effective Mission Statements

Focus on Markets Rather Than Products Effective Mission Statements Are Achievable Are Motivating Are Specific

How Often Plans Are To Be Reviewed & Revised?

Depends on resources available Degree of accuracy Usually Longer time span of plan, longer period between reviews & revisions. Conversely, More important plan is to org,s immediate success, more closely it will be monitored.

Specific Vs. Directional Plans

Plans that are clearly defined & leave no room for interpretation are specific plans.

Flexible plans that set out general guidelines are directional plans.

Centralized Vs Decentralized Plans

Centralized- done by a single group, corporate planning.
Not usual for large orgs.

Decentralized- used where each division or department is responsible for planning its own operations, with little if any guidance from central planning unit.
Common in large-scale orgs with multiple product line. Danger of overlaps even conflicts in planning

Contingency Planning
Determination of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate.s

Management by Objectives
Management by Objectives (MBO) is a process through which specific goals are set collaboratively for the organization as a whole and every unit and individual within it. Goals- then used as a basis for planning, managing org activities, & assessing and rewarding contributions.

MBO usually incorporates considerable participation among

managers and subordinates in setting goals at various levels.

Steps in the MBO

1. Develop overall organizational goals

2. Establish specific goals for various dept, subunits, and individuals

3. Formulate action plans
4. Implement plans and maintain self-control

5. Review progress periodically 6. Appraise performance

Strengths and Weaknesses of MBO

STRENGTHS
1. Aids Coordination of goals and plans Helps clarify priorities and expectations Facilitates vertical and horizontal communication Fosters employees motivation

WEAKNESS
1. Tends to falter without strong, continual commitment from top management 1. Necessitates considerable training or managers 3. Can be misused as a punitive device 4. May cause overemphasis of quantitative goals

2.

3.

4.

Strategic - Management
Includes Strategic planning, implementation, & control.

Strategic- Planning
It involves decisions made by top management. Involves ultimate allocation of large amounts of resources such as money, labor, or physical capacity. Has significant long term impact. Focuses on orgs interaction with external environment.

Strategic Planning
Strategic planning includes those activities that involves defining an orgs mission, setting its objectives, & developing strategies to enable it to operate successfully in its environment.

Strategic Planning
Strategic Planning
Making decisions about the long-term goals and strategies of an organization

Strategic Goals
Major targets or end results that relate to the longterm survival, value, and growth of the organization

Strategy
A pattern of actions and resource allocations designed to achieve the goals of the organization

The Budgeting Process

Management objectives for the organizations. Sales budget Forecast of quantities sold Forecast of dollar income Other income Interest income Miscellaneous income
Production budget Units to be produced Cost of materials Direct labor costs Factory overhead Less Marketing Budget Promotion costs Selling expenses by territories

Administrative expense budget For each operating department

Results in

Miscellaneous expense budget Interest on loans Other

Financial budget Budgeted balance sheet Supporting budgets

Barriers To Goal Setting & Planning

Major Barriers

Inappropriate Goals Improper rewards system Dynamic & complex environment Reluctance to establish goals Resistance to change constraints

Barriers To Goal Setting & Planning

Understanding purposes of goals & planning Communication & participation Consistency, revision & updating effective rewards system

Overcoming Barriers

Potential Obstacles to Planning

Several Potential obstacles threaten - ability of org to develop effective plans. One barrier is a rapidly changing environment,- makes planning more difficult because plans must be altered frequently. View among some managers that planning is unnecessary. Org can take several steps to reduce obstacles to planning. One step is

conveying strong top mgt support for planning process. Planning staff A small group of individuals who assist top level managers in developing the various components of planning process. Contingency planning is development of alternative plans for use in the event that environmental condition evolve differently than anticipated, rendering original plans unwise or unfeasible.

Efficiency of Plans
Its Contribution to Purpose & Objectives, offset by costs & other factors required to formulate & operate it.
Plans are efficient if they achieve their purpose at a reasonable cost, when cost is measured not only in terms of time & money or production but also in degree of individual or group satisfaction.

Issues in Planning
1. 2. 3. 4. 5. 6. 7. Being aware of Opportunities Establishing Objectives Determining Alternative Courses Evaluating Alternative Courses Selecting a Course Formulating Derivative Plans Numberizing Plans By Budgeting