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Planning 3

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30 views7 pages

Planning 3

Uploaded by

dsravani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PLANNING- 3

Approaches to planning
Planning in dynamic environment
Relationship of objectives and the
organizational Hierarchy

1. Socio-
economic
purpose Board of
directors
2. Mission

3. Overall objectives of the


organization (long-rage, Top-level
strategic) management

4. More specific overall objectives


(e.g, in key result areas (Some)

5. Division objectives Middle – level


(Some) managers

6. Department and Unit objectives

7. Individual objectives Lower-level


• Performance managers
• Personal development objectives

Hierarchy objectives organizational Hierarchy


2
Steps in Planning
Being Aware of Opportunity

Setting objectives or Goals

Considering planning
premises

Identifying Alternatives

Comparing alternatives in light of


goals sought

Choosing an Alternative

Formulating supporting plans

Numerizing plans by Marking Budgets

3
Steps in Planning
Being Aware of Opportunity
Comparing alternatives in light of
In light of:
goals sought
The Market
Which alternative will give us the
Competition
best chance of meeting our goals at
What customer want
the lowest cost and highest profit?
Our strengths
Our weaknesses

Choosing an Alternative
Setting objectives or Goals Selecting the course of action we
Where we want to be and what will pursue
we want to accomplish and
when

Formulating supporting plans


Such as plan to
Considering planning Buy equipment
premises Buy materials
In what environment – internal Hire and train workers
or external – will our plans Develop a new product
operator?

Numerizing plans by Marking


Budgets
Identifying Alternatives Develop such budgets as:
What are the most promising Volume and price of sales
alternatives to accomplishing Operating expenses
our objectives? Necessary for plans
Expenditures for capital
Equipment 4
Approaches to planning

• Managers adopt the various approaches to


planning, based on the degree of participation,
delegation of authority and required capabilities of
lower level, managers.
– Top-down approach
– Bottom-up approach
– Composite approach
– Team approach

5
– Top-down approach
• Adopted in family-managed organizations or by traditional or conservative
managers.
• Centralized –formulates basic policies, determines corporate objectives,
makes strategies and devises a course of action for achieving the objectives.
– Little authority delegated to the lower level managers
• Assumption: higher level managers are professionally qualified and well-
experienced.

– Bottom-up approach
• Assumption: planning, thinking, and doing are closely related and both
functions can be performed by same managers, a high degree of flexibility is
maintained in planning this approach.
• Rough draft – prepared and sent to the high level managers - for review and
final approval
– Provided the lower level managers have the requisite knowledge, awareness
and creativity to undertake planning.
• Basic job of top executives is to unify and coordinate various sub-plans,
originating from lower levels.
– Lower levels are not confined to implementation only but are equally involved
in initiating plans.
– Composite approach
• Is more popular
• Combines the attributes of the top-down and bottom-up approaches.
• Top executives provide guidelines, parameters and limitations under which
middle and lower level managers are expected to formulate tentative
plans /rough draft which are communicated upwards for review and
approval.
– Authority rests with top managers – to make plans

– Team approach
• Job of initiating plans is assigned to a team of managers from concerned
areas.
• They do the strategic analysis part of work.
• And finally they prepare tentative proposals to chief executive under whose
commands they have been working.
– They work as the brain of chief executive, suggesting and recommending
proposal to him.
– But ultimate authority for approval lies with chief executive.

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