Planning

Balaram Champannavar
 Introduction about planning
 Features of planning
 Objectives of planning
 Merits and demerit of planning
 Planning premises
 Types of planning premises

 Process of planning
 Types of planning
 Requirement of a good plan
 Limitation of planning
 Different levels of strategy
 Decision making
 Types of decision making

 Decision making condition

 Decision making under certainty
 Decision making under risk
 Decision making uncertainty
 Views of Decision making condition

 Process of Decision making

 Technique of group decision making

 
“Those who fail to plan, plan
to fail.”
Its is concerned with deciding in advance:
“Planning”
•What is to be done in future?
•When it is should be done?
•Where the action should be taken?
•By whom it is to be done?
•It is the process of thinking about and organizing the activities required to achieve a desired goal.
 Definition
“Planning is deciding in advance what to do, how to do, and who is to do it.
Planning bridges the gap from where we are to where we want to go.
It makes it possible for things to happen”.                                                                
                       – Koontz and O'Donnell.
 FEATURES OF PLANNING
1. Focus on realizing the objectives set
2. Intellectual process involving mental exercise
3. Selective as it selects the best course of action
4. Pervasive as all the levels of management plan
5. Lays foundation of the successful actions of management
6. It is flexible
7. It is Continuous
8. Efficiency is measured by what it contributes to the objectives.
OBJECTIVES OF PLANNING
1. Helps in effective forecasting
2. Provides certainty in the activities
3. Establish coordination in the enterprise
4. Provides economy in the management
5. Helpful in the accomplishment of budgets
6. Gives direction to all the activities of an organization
MERITS AND DEMERITS OF PLANNING

Advantages: Disadvantages :
1.Reduces uncertainty 1.Limitations of
2.Ensures economical forecasts
operations 2.Rigidity in
3.Facilitates control administration
4.Improves motivation 3.Time consuming
5.Gives competitive process
edge 4.Costly affair
6.Avoids duplication of 5.Influence of external
efforts factors
6.Psychological factors
 PLANNING PREMISING
 Premising: Planning made today is dependent upon certain assumptions.
 It constitutes a framework in which planning is to be done.
 Planning premises are made taking into consideration both the past as well as
the expected events.
 TYPES OF PLANNING PREMISES
 Internal premises: include those that originate
from the sales forecast, existing policies and
procedures of an organization and capital
investment policies.
 External premises: relating to Political, Social,
Technological and economical forces. These are
beyond the powers of any organization.
 TYPES OF PLANNING PREMISES
 Controllable premises: factors like materials, money and machine are
controllable factors.
 Semi controllable: these are under partial control of a business like labour
relations and marketing strategy.
 Non controllable: which are beyond the control of any organization like govt.
policy, wars and natural calamities.
PROCESS OF PLANNING
 Establish the objectives OR Set goals to be achieved
 Develop Premises
 Evaluate alternative and selection
 Formulating derivative plans
 Securing Co Operation and participation
 Providing for follow up
Types of Planning

Strategic Tactical/Operational Consistency

Plan Plans Plan

Project
Time Period
Plan
Strategic planning is an
organization’s process of
defining its strategy, or
direction, and making
decisions on allocating is resources to pursue this strategy.

Plans are done every One to Three years.

Primarily done by Top management.

Examples :
15% return on investments and 5% growth
No layoffs
•What we want to do?
•Where do we want to be?
•How will we get there?
•How do we best excel?
•Who are our target customers?
•Where do we want the company to be?
•How can we beat and avoid our competitions?

If you can answer all the above questions well, you have a
strategy.
 Tactical Plans
Tactical plans are plans to help the organization to execute its
strategic goals and to accomplish a specific part of the company
strategy

Plans are done for short period i.e. every six months to a year.
Primarily done by the Employees up to the Middle management.

Examples:
Manufacture 10,00,000 units at an
average cost of ₹100.
 Operational plan
These plan are specific and measures departmental results.
Operational plans are daily done on weekly basis
Operation plans defines the outcomes of the divisions or department.

Example:
Visit one new customer each day.
 Contingency plan
Plans that define company response to specific situation.

A contingency plan is sometimes referred to as "Plan B," because it

can be also used as an alternative for action if expected results fail
to materialize.

Contingency planning is a component of business continuity, disaster

recovery and risk management.
Examples :
Emergencies or unexpected conditions.
Backup plans.
 Project plan
A project plan is a formal document designed to guide the control and execution of a
project.
A Project Plan sets out the phases, activities and tasks needed to deliver a project.
The timeframes required to deliver the project, along with the resources and milestones are
also shown in the Project Plan.
Requirements of a Good Plan
 Clear objective
 Proper understanding.
 Flexible
 Stable
 Comprehensive
 Economical
Limitations Of Planning
 Costly process
 Rigidity
 Limited scope
 Influence of external factors.
 Non-availability of data
 People’s resistance
Different Levels of Strategy
Levels of Strategy
DECISION MAKING
“Making decisions is selecting one alternative from different alternatives”
 Decision is a choice whereby a person comes to
a conclusion about given circumstances/situation.
 It involves choice making
 It is core of managerial activities in organization
TYPES OF DECISIONS
 Basicand Routine Decisions
 Personal and Organizational Decisions
 Programmed and Unprogrammed Decisions
DECISION-MAKING CONDITIONS
 Managers sometimes have an almost perfect understanding of conditions
surrounding a decision, but at other times they have few clues about those
conditions.
 In general, the circumstances that exist for the decision maker are conditions
of certainty, risk, or uncertainty.
 These conditions are represented in the form of a figure
Decision-making
Conditions
The
The decision
decision maker
maker
faces
faces conditions
conditions of
of …
…

Certainty
Certainty Risk
Risk Uncertainty
Uncertainty

Lower Moderate Higher

Level of ambiguity and chances of marking bad decision

 Decision Making Under Certainty
A state of certainty exist when a decision maker
knows, with reasonable certainty what the
alternatives are and what conditions are
associated with each alternative.
 Very
few organizational decisions, however, are
made under these conditions.
 Thecomplex and turbulent environment in which
businesses exist rarely allows for such decisions.
 Decision Making Under Risk
A state of risk exists when a decision maker makes
decisions under a condition in which the availability
of each alternative and its potential payoffs and
costs are all associated with probability estimate.
 Decisions
such as these are based on past
experiences, relevant information, the advice of
others and one’s own judgment.
 Decisionis calculated on the basis of which
alternative has the highest probability of working
effectively.
Decision making Under Uncertainty
A state of uncertainty exists when a decision maker
does not know all the alternatives, the risks
associated with each, or the consequences each
alternative is likely to have.
 Mostof the major decision making in todays
organization is done under these conditions.
 To make effective decisions under these conditions,
managers must secure as much as relevant
information as possible and approach the situation
from a logical and rational view.
 Judgment and experience always paly a major role in
the decision making process under these conditions.
View of decision Making conditions

Risk and uncertainty

Uncertainty Absolute certainty

Level of ambiguity and chances of making bad decision

Lower Moderate. Higher

PROCESS OF DECISION MAKING

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Internal Environment
Internal Environment
Feedback
Feedback

External Environment
External Environment
Steps In DECISION MAKING
1. Awareness of problem

The First step of decision making process is recognizing a problem. The

manager must become aware that a problem exists and that it is important
enough for managerial action..
Example: Plant manager see that employee turnover is increasing by
5%.

2. Diagnose and state the problem

Once the problem is identified, he or she must identify the decision criteria
that are important to resolve problem.
Example: when employee turnover increases by 5%, it was due to less wages
and other reasons.
Steps In DECISION MAKING
3. Developing the Alternatives
Once you have a clear understanding of the issue, it’s time to identify the various
solutions at your disposal. It’s likely that you have many different options when it
comes to making your decision, so it is important to come up with a range of options.
This helps you determine which course of action is the best way to achieve your
objective.
Example: Manager can increase wages, increase benefits or change hiring
standards.

4. Evaluation of Alternatives

 In this step, you’ll need to “evaluate for feasibility, acceptability and
desirability” to know which alternative is best. Managers need to be able to weigh
pros and cons, then select the option that has the highest chances of success. It
may be helpful to seek out a trusted second opinion to gain a new perspective on
the issue at hand.
Example: increasing benefits may not be feasible. Increasing wages and
changing hiring standards may satisfy the conditions.
Steps In DECISION MAKING
5.Select the Best Alternative

In this step, the decision-maker merely selects the alternative that will
maximize the results in terms of existing objectives.
Example: Increase in wages is the best one because changing
hiring standard will take longer period to cut turn over

6. Implement and verify the Decision

After making a decision, manager must implement it. He must see whether it has actually
worked or not. The chosen alternative is implemented in organizational system.
Implementation includes planning organizing, leading& Controlling
Example: Now the human resource deport establishes a new wage structure.

7. Feedback
Evaluating the result makes Sure that problem has been solved. He must seek
feedback regarding the effectiveness of implemented solution.
Example: Plant manger notes that after six months turnover drops to its
previous level.
Techniques of Group Decision Making
 Brain Storming
 Delphi Technique
 Nominal Group Technique
 Other Technique for decision making
 Breakeven Analysis
 Capital Budgeting
 Linear Programming
 Queuing Theory
 Probability Theory.