Introduction to Management "First and Foremost Function of Management

Introduction to Management

1. Introduction to Management “ Failure is Simply the Opportunity to Begin Again, This Time More Intelligently .”   Henry Ford

2. Planning

3. Lesson Outlines Introduction to Planning Importance of Planning Characteristics of Planning Steps Involved in Planning Limitations of Planning Plan Vs. Planning Types of Plan

4. Introduction to Planning Planning is the fundamental management function, which involves deciding beforehand, what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down an organisation’s objectives and develops various courses of action, by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal . According to etymology sources, the word "planning" as a verbal noun meaning "the forming or making of plans" first appeared in the English language around 1748, derived from the verb "plan.". 

5. According to Koontz and O’Donnel , “Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. It bridges the gap from where we are to where we want to go.” Planning is the continuous managerial process of anticipating and forecasting the future. environment of the business organization, the formulation of the long term and short term goals. to be achieved and selecting the strategies for their realization. Harold D. (Howdy) Koontz (May 19, 1909-February 11, 1984) was an American organizational theorist, professor of business management at the University of California, Los Angeles and a consultant for many of America's largest business organizations. Koontz co-authored the book Principles of Management with Cyril J. O'Donnell; the book has sold around two million copies and has been translated into 15 languages. Dr. Cyril O'Donnell (December 1900-February 16, 1976) was a prolific professor and teacher of management at the University of California at Los Angeles. He consulted on operations management topics for some of the largest US corporations such as Hughes Aircraft, as well as the government of Jamaica  . He was a co-author of the book Principles of Management with Harold Koontz which sold more than two million copies worldwide with translations in 15 languages.

6. Planning is also a management process, concerned with defining goals for a company's future direction and determining the missions and resources to achieve those targets. To meet objectives, managers may develop plans, such as a business plan or a marketing plan . The planning process provides the information top management needs to make effective decisions about how to allocate the resources in a way that will enable the organization to reach its objectives. Productivity is maximized and resources are not wasted on projects with little chance of success.

7. It helps managers to improve future performance, by establishing objectives and selecting a course of action, for the benefit of the organisation. It minimises risk and uncertainty, by looking ahead into the future. It facilitates the coordination of activities. Thus, reduces overlapping among activities and eliminates unproductive work. It states in advance, what should be done in future, so it provides direction for action. It uncovers and identifies future opportunities and threats. It sets out standards for controlling. It compares actual performance with the standard performance and efforts are made to correct the same. Importance of Planning

8. Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan because the future is highly uncertain and no one can predict the future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success.

9. Characteristics of Planning Managerial function: Planning is a first and foremost managerial function provides the base for other functions of the management, i.e. organising, staffing, directing and controlling, as they are performed within the periphery of the plans made. Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals. Pervasive : It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments . Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering the organisation’s present and future requirements and conditions. Therefore, it is an on-going process, as the plans are framed, executed and followed by another plan.

10. Intellectual Process: It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc. Futuristic : In the process of planning we take a sneak peek of the future. It encompasses looking into the future, to analyse and predict it so that the organisation can face future challenges effectively. Decision making: Decisions are made regarding the choice of alternative courses of action that can be undertaken to reach the goal. The alternative chosen should be best among all, with the least number of the negative and highest number of positive outcomes. Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The activity helps managers analyse the present condition to identify the ways of attaining the desired position in future. It is both, the need of the organisation and the responsibility of managers.

11. Steps Involved in Planning By planning process, an organisation not only gets the insights of the future, but it also helps the organisation to shape its future. Effective planning involves simplicity of the plan, i.e. the plan should be clearly stated and easy to understand because if the plan is too much complicated it will create chaos among the members of the organisation. Further, the plan should fulfil all the requirements of the organisation.

12. Setting up the Objectives: The first step in the planning process is the setting up of objectives and goals. Any business enterprise needs certain objectives to work upon for. Managers need to state these objectives very clearly so that right direction can be taken for achieving goals. Moreover , the objectives stated in the plan must sink in to all levels in the organisation. It provides a direction to the individual departments/units so that they can work towards the common objectives of the organisation. Unless the goals are not defined, the functions of the management cannot move forward.

13. Developing the Premises: Planning is based on certain assumptions regarding the future. These assumptions are known as premises. The assumptions are regarding the future predictions, previous plans and current policies and facts. Mangers at all levels of the organisation involved in the planning should follow the same assumptions. These assumptions are very important for the organisation as they decide the path for the plans to be made. Thus, for successful planning correct premises should be proposed.

14. Identification of the Alternatives: Once the objectives and assumptions are developed, a need arises to identify the different courses of action that can be followed. There can be number of ways to achieve a defined objective. The managers need to think carefully about these various routes. This involves innovation and creative mind so that new ways can be developed in order to accomplish the goals.

15. Evaluation of the Alternatives: After identifying the different paths of actions the managers need to evaluate them. This evaluation is based on the utility and the consequences of the options. Managers must assess the pros and cons of each alternative. For example, which route will incur less cost or which option can help in achieving the goals in lesser time. In light of such aspects the right evaluation of different alternatives should be done.

16. Selection of the Best: Selecting the best alternative involves opting for the method that is most viable as per the objective. Here , the managers should use their skills and knowledge for judging and selecting the best alternative in terms of profitability, costs and workability. Depending on the situation, a combination of different routes may also be taken up instead of just one.

17. Implementation: Implementation of the alternatives requires other functions of management to step into the process. It involves organising and directing the work according to the chosen path and policies. Implementation is concerned with following the opted path of action and deciding how that is to be used in order to be successful.

18. Follow-up Action: For assessing the whole working and implementation of the plans, a continuous supervision of the actions are required. Keeping an eye on the activities to be performed is an important part of planning itself, as it helps to ensure the proper working of a plan. Thus , a thorough follow-up action increases the success of a plan and thereby, the achievement of the objectives.

19. Limitations of Planning Limitations of Planning can be classified as Internal and External: Internal Limitations of Planning Planning leads to rigidity. Plan is drawn up with specific goals to be achieved within a specific time frame. These plans then decide the future course of action and managers may not be in a position to change it. Plans need flexibility. Planning may not work in a dynamic environment. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organization has to constantly adapt itself to changes . Planning reduces creativity. Middle level management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them gets lost or reduced .

20. Planning involves huge costs. These costs may be in terms of time and money, for example, checking accuracy of facts may involve lot of time. Detailed plans require scientific calculations to ascertain facts and figures. There are a number of incidental costs as well, like expenses on boardroom meetings, etc . Planning is a time-consuming process. Plans drawn up take so much of time that there is not much time left for their implementation . Planning does not guarantee success. The effectiveness of plans depends upon the implementation of plans. Every plan is not a solution to the problem. Plans can fail under uncertain circumstances in future . External Limitations of Planning Plans fail sometimes due to external factors beyond the control of the management: Political Climate: Changes in the policies of the government, ideology of the ruling party etc.

21. Labour Union: Labour unions can be a big reason for the failure of plan by using strikes, lockouts and agitations. Technological changes: The use of latest machinery by the competitor can be a big challenge and fail the plan . Policies of competitors: Policies of competitors relating to sale of goods, advertising, recruitment of employees etc. can also pose a big problem in the implementation of plans successfully . Natural Calamities: Natural calamities like earthquake, lightening, heavy rainfall, famines can also be big hurdles in the success of plans . Changes in demand and prices: Changes in demand due to change in tastes and fashion of customers, prices of raw materials etc. fall under this case .

22. Plan Vs. Planning Effective and efficient planning is essential for organizational success and improved productivity. Many people think plans and planning are the same, but there is a difference between planning and plans. What is the difference between planning and plans? The difference between planning and plans is that a plan is a document that involves a list of activities needed to be done to achieve the given objective. While planning is a continuous process that produces, executes, and adjusts the plan if required . Planning and plans may be used alternatively, but planning is a more significant aspect than plan. Let’s read further to understand the difference between planning and plans in more detail.

23. S.No . Planning Plan 01 The process of establishing a plan to achieve goals The document contains a list of activities. The plan is the product of planning. 02 Planning is an intellectual activity The plan is a theoretical practice 03 Planning is a continuous task that executes the plan, reviews it, and revises it if needed The plan involves a list of actions that need to be done in order to achieve the given objective 04 Planning is an active way of setting objectives, strategies, and procedures to accomplish goals Plans need to be updated regularly based on the progress 05 Planning involves the capacity to think ahead Plans help perform the mentioned activities 06 Determines where a business wants to go Following a plan helps businesses reach their goal

24. Types of Plans In the process of planning, several plans are prepared which are known as components of planning.

25. Strategic plans:   A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in mind, rather than with the goals of specific divisions or departments. It is further classified as: I. Mission : The mission is a statement that reflects the basic purpose and focus of the organization which normally remain unchanged. The mission of the company is the answer of the question : why does the organization exists? II. Objectives or goals: Both goal and objective can be defined as statements that reflect the end towards which the organization is aiming to achieve. However, there are significant differences between the two. A goal is an abstract and general umbrella statement, under which specific objectives can be clustered. Objectives are statements that describe in precise, measurable, and obtainable terms which reflect the desired organization’s outcomes.

26. III. Strategies : Strategy is the determination of the basic long term objectives of an organization and the adoption of action and collection of action and allocation of resources necessary to achieve these goals.

27. Tactical plans: A tactical plan is concerned with what the lower level units within each division must do, how they must do it, and who is in charge at each level. Tactics are the means needed to activate a strategy and make it work. Tactical plans are concerned with shorter time frames and narrower scopes than are strategic plans. These plans usually span one year or less because they are considered short-term goals.

28. Operational plans An operational plan is a plan that outlines the key objectives and goals of a company while also outlining how the company can achieve them. A clear and concise operational plan can help to ensure that projects stay on track and can help to improve day-to-day operations . An operational plan is one that a manager uses to accomplish his or her job responsibilities. Supervisors, team leaders, and facilitators develop operational plans to support tactical plans. Operational plans can be a single-use plan or a standing plan .

29. I. Single-use plans Single-use plans apply to activities that do not recur or repeat. A one-time occurrence, such as a special sales program, is a single-use plan because it deals with the who, what, where, how, and how much of an activity. Programme : Programme consists of an ordered list of events to be followed to execute a project. Budget: A budget predicts sources and amounts of income and how much they are used for a specific project.

30. II. Standing plans: Standing plans are usually made once and retain their value over a period of years while undergoing periodic revisions and updates. The following are examples of ongoing plans: Policy : A policy provides a broad guideline for managers to follow when dealing with important areas of decision making. Policies are general statements that explain how a manager should attempt to handle routine management responsibilities. Typical human resources policies, for example, address such matters as employee hiring, terminations, performance appraisals, pay increases, and discipline.

31. Procedure: A procedure is a set of step-by-step directions that explains how activities or tasks are to be carried out. Most organizations have procedures for purchasing supplies and equipment, for example. This procedure usually begins with a supervisor completing a purchasing requisition. The requisition is then sent to the next level of management for approval. The approved requisition is forwarded to the purchasing department. Depending on the amount of the request, the purchasing department may place an order, or they may need to secure quotations and/or bids for several vendors before placing the order. By defining the steps to be taken and the order in which they are to be done, procedures provide a standardized way of responding to a repetitive problem.

32. Rule: A rule is an explicit statement that tells an employee what he or she can and cannot do. Rules are “do” and “don't” statements put into place to promote the safety of employees and the uniform treatment and behavior of employees. For example, rules about tardiness and absenteeism permit supervisors to make discipline decisions rapidly and with a high degree of fairness.

33. Contingency plan A contingency plan is a course of action designed to help an organization respond effectively to a significant future incident, event or situation that may or may not happen. A contingency plan is sometimes referred to as "Plan B" or a backup plan because it can also be used as an alternative action if expected results fail to materialize. Contingency planning is a component of business continuity (BC), disaster recovery (DR) and risk management. Example of a contingency plan A contingency plan can focus on one specific part of an organization's operations. For example, it can be the measures taken to back up all critical data. Another example would be work-from-home provisions put in place in case a facility is out of commission. The COVID-19 pandemic demonstrated to many organizations the importance of having comprehensive contingency plans in place across an organization prior to an unplanned event. Companies with adequate plans were able to react faster when the pandemic started to escalate.

34. Review Questions Define the term planning? List the features of planning? How does planning leads to:- Reduction in overlapping & wasteful activities. Establishing standards for controlling Briefly discuss the steps involved in planning? Explain the following : Budget Strategy Programme Distinguish between the following:- Rule and policy Rule and method Why is planning referred to as a time consuming process and involves huge costs?

35. Plan Failed Projects The Magampura Mahinda Rajapaksa Port ( Magampura Mahinda Rajapaksa Port, also known as the Hambantota Harbour is situated along the Colombo - Galle - Hambantota - Wellawaya Highway in Hambantota .) which was built at a cost of US$ 1,300 million is to be an alternative to the Colombo Harbour . The harbour lies abandoned since its opening in 2010 . China Merchant Port Holdings ( CMPort ) has invested $974 million in the Hambantota International Port (HIP), and owns 85 percent of the shares. The port is held on a 99-year lease granted by the Government of Sri Lanka (GOSL) to develop, manage and operate the port area. The Hambantota Port has fallen short of its targeted revenue, generating only Rs 132 million in 2014. The Sri Lanka Ports Authority (SLPA) had set a target of Rs 500-Rs 600 million in revenue.

36. The Mahinda Rajapaksa International Cricket Stadium built at a cost of Rs 700 million in Suriyawewa , Hambantota, which was opened in 2011 for the World Cup matches. The complex, with a seating capacity of 32,000, and standing on 47 acres of land, is hardly used. Except for the two World Cup cricket matches and a few isolated matches played there, the stadium stands desolate.

37. The Mattala Rajapaksa International Airport (MRIA) , opened at the beginning of the year. Standing on 2,000 hectares of land, it was built at a cost of Rs 26 billion. The airport, which is 43 km from Hambantota town is close to an elephant infested jungle. 

38. The Hambantota Sports Zone , exclusively designed for the 2018 Commonwealth Games for which Sri Lanka vied, is another let down for the government. The project, which cost Rs 15 billion, is the third largest development zone in Suriyawewa , Hambantota, close to the new international cricket stadium. Hambantota lost the right to host the Commonwealth Games to the Gold Coast in Australia. Nevertheless, it is being prepared to host the Asian Youth Sports Festival scheduled to be held in 2017. Hambantota 2018 was an unsuccessful bid to stage the 2018 Commonwealth Games by the city of Hambantota, Sri Lanka. The right to host the Games was won by the Gold Coast 2018 bid after a 43-27 vote by the Commonwealth Games Federation (CGF) General Assembly on 11 November 2011 in Saint Kitts. The 2017 Asian Youth Games were to be an international multi-sport event. Initially planned to be hosted by the city of Hambantota, Sri Lanka, a new host for the 2017 AYG were to be decided at a future Olympic Council of Asia general assembly after Sri Lanka lost its hosting rights. It has now been decided to postpone until 2021 in Shantou, China, but was eventually cancelled due to COVID-19 pandemic in China

39. The Norochcholai Power Plant: The Lakvijaya Power Station is the largest power station in Sri Lanka. The power station is in Norocholai , Puttalam , on the southern end of the Kalpitiya Peninsula . (White elephant ) Other Failed Projects Voyage 2 The Mahinda Rajapaksa National Tele Cinema Park built on 235 acres in Ranminitenna , Hambantota, at a cost of Rs 2 billion. It was opened in 2010. The park was constructed with money received from taxes on foreign films and teledramas . It is said there is little or no shooting taking place at the centre despite the concessions on offer. The Southern Expressway, running from Kottawa to Galle, too, has incurred huge losses to date. The vast expanse of 95 km stretch built at a cost of Rs 776 billion was expected to yield substantial income, that will cover the cost and generate profit. However, the annual revenue collected from vehicles using the highway is only Rs 1 billion, while debt service and maintenance cost is around Rs 6.5 billion, incurring a loss of Rs 5.5 billion, annually.