29 March 2014

function of management- planning

Terminology used in planning:
  1. Objectives and Goals:They represent not only the end point in planning but also the end point for organizing,staffing, leading and controlling
  2. Strategies: is defined as the determination of the basic long-term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals.
  3. Policies:are also plans and define an area within which a decision is to be made and ensure that the decision will be consistent with, and contribute to, an objective.
  4. Procedures: are plans that establish a required method of handling future activities
  5. Rules: spell out specific required actions or non-actions, allowing no discretion
  6. Programs: are a complex of goals, policies, procedures, rules, task assignments, steps taken, resources to be employed, and other elements necessary.
 Planning is a vital and necessary management function. The functions of organizing, leading, and controlling all carry out the objectives and goals determined by planning. All organizations operate in uncertain environments and Planning helps it to adapt to change and uncertainty.Formal Planning is an activity that distinguishes managers from non-managers. Formal Planning distinguishes effective managers from ineffective ones.
Planning includes all the activities that lead to the definition of objectives and to the determination of appropriate courses of action to achieve those objectives.
There are the following 4 benefits to planning:
  1. Planning forces managers to think ahead
  2. It leads to the development of performance standards that enable more effective management control
  3. Having to formulate plans forces management to articulate clear objectives
  4. Planning enables an organization to be better prepared for sudden developments.
The 4 aspects can be explained in terms of:
(a)    Increasing time spans between present decisions and future results
(b)   Increasing organizational complexity
(c)    Increased external change
(d)   Planning and other management functions
      Types of Planning:
Although effective planning focuses on the custome and on issues of quality and competitiveness, planning activity differs in scope, time-frame, and level of detail.
Scope: refers to the range of activities covered by the plan
Time frame: is the period considered by the plan, ranging from short term and long term
Level of detail: concerns the specificity of the plan
There are 3 types of Plans:
  1. Strategic
  2. Operational
  3. Tactical.
Strategic Planning:The activities that lead to the definition of objectives for the entire organization and to the determination of appropriate strategies for achieving those objectives
Operational Planning:Translates the broad concepts of the strategic plan into clear numbers, specific steps, and measurable objectives in the short term
Tactical Planning: planning that deals more with issues of efficiency than with long term effectiveness 
There are the following elements in Planning:
  1. Objectives
  2. Actions
  3. Resources
  4. Implementation
      e.g. achieve a 12% ROI by end of 2009
             introducing 5 new products in 2009
             resources of Rs. 10 m.
             assignment and direction of personnel.


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