Plans provide a rational approach to achieve preselected objectives.

Planning involves selecting missions and objectives and the actions to

achieve them. It requires decision making.

Planning bridges the gap from where we are to where we want to go.
 Types of Plans
• Mission: The purpose or basic function or task of an enterprise.
• Objectives or goals: The ends towards which the activity is aimed.
• Strategies: The determination of the basic long term objectives of an organization and the
adoption of courses of action and allocation of resources necessary to achieve the goals.
• Policies: General statements or understandings that guide or channel thinking in decision
making
• Procedures: Chronological sequences of required actions. They detail the exact manner in which
certain activities need to be performed.
• Rules: Specific required action or no-actions allowing no discretion.
• Programmes: A complex of goals, policies, procedures, rules, task assignments, steps to be
taken, resources to be employed and other elements necessary to carry out a given course of
action.
• Budgets: A “Numberized Programme” – A statement of expected results expressed in numerical
terms.
Planning Process
 Planning Process
1. Being aware of opportunities
2. Establishing objectives
3. Developing planning premises
4. Determining Alternative courses
5. Evaluating alternative courses
6. Selecting a course
7. Formulating derivative plans
8. Numerizing plans by budgeting
 Objectives
• The important ends toward which organizational and individual
activities are directed.

• Qualitative objectives are non verifiable

• Quantitative objectives are verifiable.
Objectives and Organizational hierarchy
 Management by Objectives
• A comprehensive managerial system that integrates many key managerial
activities in a systematic manner that is consciously directed towards the
effective and efficient achievement of organizational and individual
objectives.
Benefits of MBO:
1. Improvement of managing through result oriented planning.
2. Clarification of organizational roles, structures, delegation of authority
according to the results expected of the people occupying the roles.
3. Encouragement of personal commitment to their own and organizational
goals.
4. Development of effective controls, measuring results, leading to
corrective actions.
• Failures of MBO:
1. Failure to teach the philosophy of MBO
2. Failure to give guidelines to goal setters
3. Difficulty of setting verifiable goals with the right degree of stretch
or pull.
4. Emphasis on short term goals at the expense of long run goals
5. Danger of inflexibility in changing objectives to suit the
environment
6. Overuse of quantitative goals.
Strategic Planning Process
 Strategic Planning Process
• Inputs to the organization – individual and organizational inputs.
• Industry Analysis
• Enterprise profile
• Orientation, value and vision of executives- organizational climate
• Mission, Major objectives and Strategic intent
• Present and Future External environment
• Internal environment
• Development of alternative strategies
• Evaluation and choice of strategies
• Medium and short range planning, Implementation through reengineering the
structure, Leadership and control
• Consistency testing and Contingency planning
 TOWS Matrix
• Conceptual framework for a systematic analysis that facilitates
matching the external threats and opportunities with the internal
weaknesses and strengths of the organization.
The Portfolio Matrix- A tool for allocating resources
 Porter’s Strategies
Industry Analysis:
5 forces
The competition among companies
The threat of new companies entering into the market
The possibility of using substitute products
The bargaining power of suppliers
The bargaining power of customers
Generic strategies

Overall Cost Leadership

Differentiation Strategy

Focused Strategy