Planning, policies, strategic management Presentation.pptx

This presentation is about planning in business and management.

1. A PRESENTATION ON PRINCIPAL OF MANAGEMENT UNDER PROF. SURENDRA SINGH BAKHTIYARPUR COLLEGE OF ENGINEERING PRESENTED BY GROUP 2 PRESENTED UNIT: PLANNING

2. NATURE AND PURPOSE OF PLANNING TYPES OF PLANNING PLANNING TOOLS AND TECHNIQUES OBJECTIVES SETTING OBJECTIVES POLICIES STRATEGIC MANAGEMENT DECISION MAKING STEPS & PROCESSES TOPICS TOPICS TOPIC TOPIC 01 02 03 04

3. NATURE AND PURPOSE OF PLANNING TYPES OF PLANNING PLANNING TOOLS AND TECHNIQUES OBJECTIVES SETTING OBJECTIVES POLICIES STRATEGIC MANAGEMENT DECISION MAKING STEPS & PROCESSES TOPICS TOPICS TOPIC TOPIC 01 02 03 04

4. Introduction to Planning In designing an environment for the effective performance of individuals working together in a group, a manager's most essential task is to see that everyone understands the group's mission and objectives and the methods for attaining them. If group effort is to be effective, people must know what they are expected to accomplish. This is the function of planning. It is the most basic of all the managerial functions . Planning involves selecting missions and objectives and deciding on the actions to achieve them; it requires decision-making, i.e., choosing a course of action from among alternatives. Plans thus provide a rational approach to achieving preselected objectives. “ Planning is deciding advance what to do, how to do it, when to do it, who is to do it. It bridges the gap between where we are, where we want to go. It makes it possible for things to occur which would not otherwise happen.” - Koontz and O’Donnel

5. Planning Controlling: comparing plans with results Corrective action Implementation of plans No undesirable deviation from plans Undesirable deviation New plans “Planning is a trap laid down to capture the future”-Allen “Planning is informed anticipation of future” - Haimann .

6. Nature of Planning Planning is goal-oriented Primacy of Planning Pervasiveness of Planning Efficiency, Economy and Accuracy Planning is an intellectual process Limiting Factors Flexibility Co-ordination Planning is goal-oriented : Every plan must contribute in some positive way towards the accomplishment of group objectives. Planning has no meaning without being related to goals. Primacy of Planning: Planning is the first of the managerial functions. It precedes all other management functions.

7. iii. Pervasiveness of Planning: Planning is found at all levels of management. Top management looks after strategic planning. Middle management is in charge of administrative planning. Lower management has to concentrate on operational planning. iv. Efficiency, Economy and Accuracy: Efficiency of plan is measured by its contribution to the objectives as economically as possible. Planning also focuses on accurate forecasts. v. Planning is an intellectual process: The quality of planning will vary according to the quality of the mind of the manager. vi. Limiting Factors: A planner must recognize the limiting factors (money, manpower etc.) and formulate plans in the light of these critical factors. vii. Flexibility: The process of planning should be adaptable to changing environmental conditions. viii. Co-ordination: Planning co-ordinates the what, who, how, where and why of planning. Without co-ordination of all activities, we cannot have united efforts.

8. Purpose of Planning Planning seems to take a lot of effort. As a managerial function planning is important due to the following reasons:- i . To provide direction ii. To reduce / offset uncertainty and change iii. To minimize waste and redundancy iv. To set the standards to make control effective v. To manage by objectives vi. To help in co-ordination vii. To secure economy in operation viii. To increase organizational effectiveness

9. i . Planning provides direction: Planning provides direction to managers and non- managers alike. When employees know what their organization or work unit is trying to accomplish and what they must contribute in order to reach goals, they can coordinate their activities, cooperate with each other and do what it takes to accomplish those goals. Without planning, department and individuals might work at cross-purpose and prevent the organization from efficiently achieving goals. ii. Planning reduces / Offset uncertainty and change: Planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact of change, and develop appropriate response. Although planning won’t eliminate uncertainty, managers plan so they can respond efficiently. Future is always full of uncertainties and changes. Planning foresees the future and makes the necessary provisions for it. iii. Planning Minimizes waste and redundancy: Planning Minimizes waste and redundancy. When work activity is coordinated around plans, inefficiency becomes obvious and can be corrected and eliminated.

10. iv. Planning establishes the goals or standard to make control effective: When managers plan, they develop goals and plan. When they control they see whether the plans have been carried out and the goals met. Without planning there would be no goals against which to measure or evaluate work effort. The controlling function of management relates to the comparison of the planned performance with the actual performance. In the absence of plans, a management will have no standards for controlling other's performance. v. To manage by objectives: All the activities of an organization are designed to achieve certain specified objectives. However, planning makes the objectives more concrete by focusing attention on them. vi. To help in co-ordination: Co-ordination is, indeed, the essence of management, the planning is the base of it. Without planning it is not possible to co-ordinate the different activities of an organization. vii. To secure economy in operation: Planning involves, the selection of most profitable course of action that would lead to the best result at the minimum costs

11. viii. To increase organizational effectiveness: Mere efficiency in the organization is not important; it should also lead to productivity and effectiveness. Planning enables the manager to measure the organizational effectiveness in the context of the stated objectives and take further actions in this direction. Features of planning It is primary function of management. It is an intellectual process. Focuses on determining the objectives. Involves choice and decision making. It is a continuous process. It is a pervasive function.

12. Types of planning On the basis of content, Planning can be classified as: Strategic Planning Tactical Planning Operational planning Strategic planning establishes master plans that shape the destiny of the firm. Strategic plans set broad, comprehensive, and longer-term action directions for the entire organization. It is the process of deciding on Long-term objectives of the organization. It encompasses all the functional areas of business It decides major goals and policies of allocation of resources to achieve these goals. Done at higher levels of management Less detailed because it is not involved with the day to day operations of the organization

13. Tactical planning translates strategic plans into specific goals and plans that are most relevant to a particular organizational unit. The tactical plans also provide details of how the company or business unit will compete within its chosen business area. Middle level managers have the primary responsibility for formulating and executing tactical plans. These plans are based on marketplace realities when developed for a business. Conditions can change rapidly in competitive fields such as a Korean company suddenly developing a substantially lower-price sports bike. It involves conversion of detailed and specific plans into detailed and specification plans. It is the blue print for current action and it supports the strategic plans. It is Mid-term term It is more detailed because it involves with day to day operations of the organization. It is done at middle level of management

14. Operational planning identifies the specific procedures and actions required at lower levels in the organization. As example, if Harley- Davidson wants to revamp an assembly line to produce more sports bikes, operational plans would have to be drawn. In practice, the distinction between tactical planning and operational planning is not clear-cut. However, both tactical plans and operational plans must support the strategic plan such as revamping manufacturing and marketing to capture a larger group of young cyclists. It is short term It is more detailed because it is involves with day to day operations of the organization. Done at lower level of management Define what needs to be done in specific areas to implement strategic plans. – Production plans – Financial plans – Facilities plans – Marketing plans – Human resource plans

15. On the basis of time period Long term planning Time frame beyond five years. Long term Plans : >5yrs It specifies what the organization wants to become in long run. It involves great deal of uncertainty. Higher management levels focus on longer time horizons. May include a variety of different types of training. We should not overlook the importance of long-range plans in providing a total leadership growth and development program for leaders. Intermediate term/ Midterm planning Time frame between two and five years. Medium Term Plans : >1 yr but <5yrs It is designed to implement long term plans.

16. Short term planning Time frame of one year or less. Short term Plans : Upto one year It provide basis for day to day operations. Meet a particular objective in the near future Cover a limited area of training Answer the question: Are we doing things right? Should fit well within and contribute to long-range plans

17. Planning tools and techniques The useful tools and techniques of managerial planning include the following: Forecasting Contingency planning Scenarios Bench marketing Participative planning Use of staff planners Forecasting Forecasting is the process of predicting what will happen in the future. Almost every plan involves forecasts of some sort. The economist regularly report forecasts of economic conditions interest rates, unemployment, and trade deficits. among other issues. There are some based on qualitative forecasting. Qualitative forecasting uses experts opinions to predict the future. Also it is involved to use mathematical models and statistical analysis of historical data and surveys to predict the future events.

18. Contingency Planning It identifies alternative courses of action that can be implemented to meet the needs of changing circumstances. Although it is not possible for anyone to predict when things will go wrong, it can be expected that they will. It is unlikely that any plan will ever be completely perfect. Changes will occur in the environment. When crisis and emergencies occur, managers and the organizations have contingency plans that are ready to be implemented. Contingency plans contain "trigger points" that indicate when pre-selected alternative plans should be activated. Scenario Planning It involves identifying several alternative future scenarios that may occur. Plans are then made to deal with each scenario as it occurs. For example, the Heart and Stroke Foundation of Ontario set out to design a new model for the health care funding, they wanted to challenge the organization to think in different ways about the future. The scenario planning process benefited them by helping the board and other invited experts to rehearse strategic development plans and tactics in five different realistic scenarios.

19. Benchmarking It is a technique that uses external comparisons to better evaluate one's current performances and identify possible actions for the future. The purpose of it is to find out what other people and organizations are doing well at and plan how to incorporate these ideas into one's own operations. One of the benchmarking techniques are used to search for best practices. Best practices are things that lead to superior performance. It is considered that the best run organizations also emphasize internal benchmarking that encourages all members and work units to learn and improve by sharing one another's best practices. Participation and Involvement Includes, in all planning steps, the people who will be affected by the plans and/or who will be asked to help implement them. This process brings many benefits to the organization. Participation can increase creativity and information available for planning. Also, it increases the understanding and acceptance of plans, along with commitment to their success. Although its takes a long time, it can improve results by improving implementation. All employees participate in the planning process and are regularly updated about the company's program towards its goal

20. Use of Staff Planners Staff planners are employed to help coordinate planning for the organization as a whole or for one of its major components. They help bring focus and energy to accomplish important planning tasks. A risk involved is a tendency for a communication gap to develop between the staff planners and line managers. Everyone must work closely together, the resulting plans may be inadequate and people may lack commitment to implement the plans no matter who good they are .

21. Objectives The endpoints towards which all business activities are directed are known as Objectives. It is the first step of planning. It is the desired place that an organization wants to reach. These are very basic and are mostly set up by the top-level management for the whole organization, but different departments can also set their objectives accordingly. Objectives should be measurable in quantitative terms, in written statement form, and should be achieved in a given time period. Examples of objectives for key result areas are: To obtain a 10 percent return on investment by the end of calendar year (profitability); To increase the number of units of product X produced by 7 percent by June 30, without raising costs or reducing the current quality level (productivity). 

22. Advantages of Objectives Clear definition of objectives encourages unified planning. Objectives provide motivation to people in the organization. When the work is goal-oriented, unproductive tasks can be avoided. Objectives provide standards which aid in the control of human efforts in an organization. Objectives serve to identify the organization and to link it to the groups upon which its existence depends. Objectives act as a sound basis for developing administrative controls. Objectives contribute to the management process: they influence the purpose of the organization, policies, personnel, leadership as well as managerial control.

23. Setting Objectives Objective setting in the workplace refers to the goals set for different departments and employees, together with the timeframes within which to meet these goals. Process of setting objectives Objectives are required to be set in every area which directly and vitally effects the survival and prosperity of the business. In the setting of objectives, the following points should be borne in mind. Objectives are required to be set by management in every area which directly and vitally affects the survival and prosperity of the business. The objectives to be set in various areas have to be identified.

24. While setting the objectives, the past performance must be reviewed, since past performance indicates what the organization will be able to accomplish in future. The objectives should be set in realistic terms i.e., the objectives to be set should be reasonable and capable of attainment. Objectives must be consistent with one and other. Objectives must be set in clear-cut terms. For the successful accomplishment of the objectives, there should be effective communication.

25. Policies The general statements that guide thinking and channel energy toward a particular direction are known as Policies. Policies are a type of Standing Plan and they provide a basis for interpreting strategy. A manager uses policies at his discretion. E.g. Decisions taken under recruitment policy can be in the case of recruiting employees for a new division, such as whether to recruit from the existing employees or to explore other external sources of recruitment, various policies under it regarding the salary structure, etc. A policy is used by organizations as a guide that avoids confusion and provides a structured and unified framework.

26. Basis Policies Objectives Meaning Policies are general statements that guide thinking and channel energy toward a particular direction. objectives are the endpoints towards which all the business activities are directed. Aim Its main aim is to determine how the work is to be done. Its main aim is to determine what is to be done. Scope It is narrower than objectives as they are derived from objectives. It is wider than policies as policies are derived from objectives. Period They do not have any particular time period or dimensions. They have time period or dimensions as organizations have short term, medium term and long term objectives. Difference between Policies and Objectives

27. Need They are useful in achieving objectives, but an organization can exist without them. They are necessary for the existence of a firm. Without objectives, an organization will have no idea what it wants to achieve. Formulation They are formulated by managers at all levels of management. They are usually formulated by managers at the top level of management. Source They are derived from objectives. They are derived from goals. Example Policy of a company can be to retire employees at the age of 59. The objective of a bakery can be to increase its customer base by 10% in 6 months.

28. Strategic Management Strategic management involves developing and implementing plans to help an organization achieve its goals and objectives. This process can include formulating strategy, planning organizational structure and resource allocation, leading change initiatives, and controlling processes and resources. Strategic planning involves identifying business challenges, choosing the best strategy, monitoring progress, and then making adjustments to the executed strategy to improve performance. Tools like SWOT (strengths, weaknesses, opportunities, and threats) analysis are used to assess where opportunities and threats lie between the organization, its competition, and the overall market. Strategic management happens at broader levels like organization-wide leadership, but it can also be implemented at a department or team level.

29. The strategy Cycle

30. Approaches to strategic management There are two main approaches to strategic management: prescriptive and descriptive . Prescriptive Approach A prescriptive approach to strategic management focuses on how strategies should be developed. The prescriptive model is more top-down, based on SWOT analysis. Descriptive Approach A descriptive approach focuses on how strategies should be put into practice. The descriptive model is more guided by experimenting with different methods to find solutions and learning from experience. It applies Agile methodology to strategic management.

31. Types of strategy One way of thinking about strategic management is to classify the management focus into three types of strategy: Business Strategy Operational Strategy Transformational Strategies A business strategy is a high-level plan where you outline how your organization will achieve its objectives. Operational strategies are much more specific plans where you detail what actions to take to achieve the desired results. Transformational strategies involve making radical changes to your organization to achieve significant improvements.

32. Benefits of strategic management The strategic management process helps an organization's leadership plan for its future goals. Setting a roadmap and actionable plan ensures that employees and leaders know where they're going and how to get there in the most efficient, cost-effective manner. It is a work in progress, so strategic plans should continuously be evaluated and adjusted as the market outlook changes. Financial benefits: Increase market share and profitability. Prevent legal risk. Improve revenue and cash flow. Non-financial benefits: Relieves the board of directors of responsibilities. Allows for an objective review and assessment. Enables an organization to measure progress throughout time. Provides a big-picture perspective of the organization's future.

33. 5 steps of the strategic management process It's common to view the strategic management process as a five-step process. The steps are identification , analysis , formation , execution , and evaluation . Define the direction. Identifying the direction and specific goals is the initial stage of the strategic management process. This step involves identifying goals and determining what needs to happen to achieve them. Analyze the current situation. The second step is analysis and research. Using tools like SWOT analysis and examining the organization's resources, including budget, time, people (staff), and more, you'll gain a better understanding of how to leverage what's working and get rid of what's not.

34. Outline the strategy and plan of action. Next is formulating a strategy and plan of action based on situational analysis. This step involves crafting a specific and realistic plan to help the organization achieve its goals. Execute the plan. Executing the plan is the fourth step in the strategic management process. This step involves putting the plan into action and monitoring its progress. You may have to adjust the plan as circumstances change, especially if you take a more descriptive approach to strategy. Evaluate the plan. Evaluation is the fifth and final step in the strategic management process. Here, you'll assess whether the organization has achieved its goals. If not, you can adjust your plan and implement it in innovative ways. Feedback and analysis are essential to evaluation and preparing for an optimal business future.

35. Decision making steps and process Decision making Decision-making can be defined as the process of selecting a right and effective course of action from two or more alternatives for the purpose of achieving a desired result. Decision-making is the essence of management. The entire managerial process is based on decisions. Decisions are needed both for tackling the problems as well as for taking maximum advantages of the opportunities available. Correct decisions reduce complexities, uncertainties and diversities of the organisational environments. It is the process of identifying and selecting a course of action to solve a specific problem given – By James Stoner.

36. Features of Decision Making: Decision-Making is Goal-Oriented. Decision-Making is Pervasive. Decision-Making is an Intellectual Exercise. Decision-Making Involves a Problem of Choice. Decision-Making is a Continuous Process. Decision-Making is the Basis of Action. Decision-Making Implies a Commitment of Organisational Resources. Decision-Making is Situational. Roles of Decision Making in Management: Better Utilisation of Resources Facing Problems and Challenges

37. Business growth Achieving Objectives Increase Efficiency Facilitate Innovation Motivates Employees Steps in Decision Making: Decision making is the process of making choices by identifying a decision, gathering information, and assessing alternative resolutions. Using a step-by-step decision-making process can help you make more deliberate, thoughtful decisions by organizing relevant information and defining alternatives. This approach increases the chances that you will choose the most satisfying alternative possible.

38. 7 decision-making process steps :

39. Identify the problem To make a decision, you must first identify the problem you need to solve or the question you need to answer. Clearly define your decision. If you misidentify the problem to solve, or if the problem you’ve chosen is too broad, you’ll knock the decision train off the track before it even leaves the station. If you need to achieve a specific goal from your decision, make it measurable and timely. Gather relevant information Once you have identified your decision, it’s time to gather the information relevant to that choice. Do an internal assessment, seeing where your organization has succeeded and failed in areas related to your decision. Also, seek information from external sources, including studies, market research, and, in some cases, evaluation from paid consultants. Keep in mind, you can become bogged down by too much information and that might only complicate the process

40. Identify the alternatives With relevant information now at your fingertips, identify possible solutions to your problem. There is usually more than one option to consider when trying to meet a goal. For example, if your company is trying to gain more engagement on social media, your alternatives could include paid social advertisements, a change in your organic social media strategy, or a combination of the two. Weigh the evidence Once you have identified multiple alternatives, weigh the evidence for or against said alternatives. See what companies have done in the past to succeed in these areas, and take a good look at your organization’s own wins and losses. Identify potential pitfalls for each of your alternatives, and weigh those against the possible rewards. Choose among alternatives Here is the part of the decision-making process where you actually make the

41. decision. Hopefully, you’ve identified and clarified what decision needs to be made, gathered all relevant information, and developed and considered the potential paths to take. You should be prepared to choose. Take action Once you’ve made your decision, act on it! Develop a plan to make your decision tangible and achievable. Develop a project plan related to your decision, and then assign tasks to your team. Review your decision After a predetermined amount of time—which you defined in step one of the decision-making process—take an honest look back at your decision. Did you solve the problem? Did you answer the question? Did you meet your goals? If so, take note of what worked for future reference. If not, learn from your mistakes as you begin the decision-making process again.