Types of plans

Mission:
-What business are we in?
-What will our business be?
-Who are our customers?
-What are our values and beliefs?
-What will be our utility to the
society? And so on
Objectives:
Terry: a managerial objective is the intended goal which
prescribes definite scope and suggest direction to efforts of a

managers
 Features:
 1. All members of the organization channelise
their energy to achieve the stated goals.
 2. Objectives can be broad as well as specific. It
can be long term or short term.
 3.Objectives have hierarchy.
 4.Objectives should have social sanctions, since
they are social units.
6.New objectives may be added or old
objectives may be modified or changed
7.Objectives are multiple
8.Objectives are inter-related
9.Objectives should be based on practical
decisions
10.Objectives can be tangible or intangible
Requirements of sound objectives:

-Objectives must be both clear and

acceptable
-Objectives must support one another
-Objectives must be precise and
measurable
-Objectives should always remain valid
 
Advantages of Objectives:
 -Provides a basis for planning and for developing
other types of plans such as policies, budget and
procedures
 -Act as motivators for individuals and departments
of an enterprise.
 -Eliminate haphazard actions, which may result in
undesirable consequences
 -Facilitate co-coordinated behavior of various groups
 -Function as the basis for managerial control
 -Facilitate better management of the enterprise
 -Lessen misunderstanding and conflicts
 
 MANAGEMENT BY
OBJECTIVES(MBO)
Koontz and Weihrich: ”MBO is a
comprehensive managerial system that
integrates many key managerial activities in
a systematic manner and is consciously
directed toward the effective and efficient
achievement of organizational and
individual objectives”.
 
Features of MBO
1. MBO is not merely a technique but a philosophy to
management
2. The objectives of individuals and organization if
collectively decided by the superiors and
subordinates.They become targets to be achieved.
3. A comparison of targets and actual results will enable
managers to judge the performance of subordinates and
top level will similarly assess the performance of
managers.
4. MBO provides for a regular review of performance.
5. The objectives in MBO provides guidelines for
appropriate system and procedures.
 
 PROCESS OF MBO
 Goal setting by top
 Management
  
  
  
 Review of Performance Setting individual goals  
 
  Autonomy for selecting means
 For goal achievement

BENEFITS OF MANAGEMENT BY
OBJECTIVES:

 
-Better Managing
-Clarifying organization
-Encouraging personal commitment
-Developing controls
 
WEAKNESS OF MBO

-Failure to teach MBO policy

-Failure to give guideline to Goal setters
-Difficulty in setting goals
-Emphasis on Short term Objectives
-Danger of inflexibility
 
PRE REQUISITES FOR INSTALLING
MBO PROGRAM:

-Defining purpose
-Support from top management
-Training for MBO program
-Participation
-Feedback
 
POLICIES:

General statements or understanding which

provide guidance in decision-making to
various managers. Policy is a means of
encouraging discretion and initiative, but
within limits
Features:

1. It is a standing plans which provides answers to

recurring problems of a similar nature.
2. It limits an area within which a decision is to be taken
for the achievement of organizational goals
3. They are models of thought and principles underlying
the activities of an organization.
4. They are framed by all managers in the organization
 
TYPES OF POLICIES:

1. Major policies:
2. Supportive policies
3. Minor policies
4. Composite policies
  
LIMITATIONS OF POLICIES:

1. No universal solutions
2. No instant solutions
3. Dampen human initiation
4. No substitute for human judgment
 
STRATEGIES:

A STRATEGY IS AN ACTION PLAN

WHICH SETS THE DIRECTION THAT
A COMPANY WILL BE TAKING..
FEATURES OF STRATEGIES:

1. Strategies consist of general programme of action to be pursued

for achieving organizational goals.
2. Strategy involves choices that determine the nature and direction
of the organizations activities towards the attainment of goals.
3. Strategies include tactics used by the opponents
4. Strategy is a right combination of both internal and external
factors
5. Strategies are never static
6. Strategies may involve even contradictory action
7. Strategy is forward looking
8. They are formulated only at the top level
TYPES OF STRATEGIES

1. STABILITY STRATEGY
2. GROWTH STRATEGY
3. RETRENCHMENT OR RETREAT
STRATEGY
4. COMBINATION STRATEGY
STEPS IN STRATEGY MAKING

1. CLARIFYING BUSINESS OBJECTIVES

AND VALUES
2. APPRAISAL OF EXTERNAL
ENVIRONMENT
3. APPRAISAL OF INTERNAL
ENVIRONMENT
4. EXAMINING ALERNATIVE STRATEGIES
5. CHOICE OF STRATEGY
 PROCEDURES:
 
POLICIES are carried out by means of
more detailed guidelines called procedures.
In common parlance they are SOPs.
TERRY:”A procedure is a series of related
tasks that make up the chronological
sequence and the established way of
performing the work to be accomplished.
 
Advantages of Procedures

        Basis of Control

        Consistency
        Standardization
        Co-ordination
 Difference between policy and procedure
1. Policies are general guides to both thinking and action of
people at higher levels. Procedures are general guides to
action only usually for people at lower levels.
2. Policies help in fulfilling the objectives of the enterprise.
Procedures show us the way to implement policies
3. Policies are generally broad and allow for some
discretion. Procedures are specific and lay down the
sequence of definite acts.
4. Policies are established without any study or analysis.
Procedures are always established after thorough study
and analysis or work
 
METHODS:

A METHOD IS A PRESCRIBED WAY

IN WHICH ONE STEP OF A
PROCEDURE IS TO BE PERFORMED.
 
RULES:

Rules are detailed and recorded

instructions that a specific action must or
must not be performed in a given situation
CHARACTERISTICS OF A
GOOD PLAN
CLEAR OBJECTIVES
PROPER UNDERSTANDING
COMPREHENSIVE
FLEXIBLE
ECONOMICAL
ADVANTAGES OF PLANNING

 ATTENTION ON OBJECTIVES
 MINIMISING UNCERTAINITIES
 BETTER UTILISATION OF RESOURCES
 ECONOMY IN OPERATIONS
 BETTER CO-ORDINATION
 ENCOURAGES INNOVATIONS AND CREDIBILITY
 MANAGEMENT BY EXCEPTION POSSIBLE
 FACILITATES CONTROL
 FACILITATES DELEGATION
DISADVANTAGES OF
PLANNING
LACK OF RELIABLE DATA
TIME CONSUMING PROCESS
EXPENSIVE
EXTERNAL FACTORS MAY REDUCE
UTILITY
SUDDEN EMERGENCIES
RESISTANCE TO CHANGE
 STEPS IN PLANNING

ESTABLISHING VERIFIABLE GOALS OR SET OF GOALS TO BE

ACHIEVED
ESTABLISHING PLANNING PREMISES
– INTERNAL AND EXTERNAL PREMISE
– TANGIBLE AND INTANGIBLE PREMISES
– CONTROLLABLE AND NON-CONTROLLABLE PREMISES
DECIDING THE PLANNING PERIOD
- LEAD TIME
- TIME REQUIRED TO COVER CAPITAL INVESTMENTS OR THE PAY BACK
PERIOD
- LENGTH OF THE COMMITMENT MADE
FACING ALTERNATIVE COURSES OF ACTION
EVALUATING AND SELECTING A COURSE OF ACTION
DEVELOPING DERIVATIVE PLAN
MEASURING AND CONTROLLING THE PROCESS
DECISION MAKING

GEORGE TERRY SAYS, “DECISION

MAKING IS THE SELECTION BASED
ON SOME CRITERIA FROM TWO OR
MORE POSSIBLE ALTERNATIVES”.
Characteristics

 Based on rational thinking

 Process of selecting the best among alternatives
available
 Involves the evaluation of various alternatives
available
 It is the end product because it is preceded by
discussions and deliberations
 Aims to achieve organizational goals
 Involves commitment
Steps in rational decision
making
 Step 1:Recognizing the problem
– When there is a deviation from the past
– When there is a deviation from the plan
– When other people bring problems to the manager
– When competitors outperform the manager’s
organisation
Step 2: Deciding priorities among problems
Step 3 Diagnosing the problem
-Systems approach to the problems
Step 4: Developing alternative solutions or
courses of action
– Creative process are
saturation,deliberation,incubation,illumination
and accommodation
Step 5:Measuring and comparing the
consequences of alternative solutions
– Compare quality and acceptability
Step 6: Converting the decision into effective
action and follow up of action
Environment of decision making

Certainty
Risk
Uncertainty
Types of decisions

Programmed and non-programmed

Major and minor
Routine and strategic
Individual and group
Simple and complex decisions
Common difficulties in decision
making
Incomplete information
Unsupporting environment
Non-acceptance by subordinates
Ineffective communication
Incorrect timing