8 June 2016.POM-Chapter 3;Planning

Date:8 June 2016
Chapter 3 : Planning

What is Planning?

Planning is deciding in advance what to do, how to do it,
when to do it and who will be doing it.
-Map,Blueprint,Guidelines,SOP
Set a direction,mission,vision,and objective to achieve the certain goal
According to Haimann, planning is the function that determines
in advance what should be done

Purpose of Planning
Set the standards to facilitate control-guidelines to control the relationship,staff and budget
Provide direction-because of the changes in the environment
Minimize waste and redundancy-related more to factory that used old machine will kill the times.
Reduce the impact of change-advance technology For Ex;Domino got an apps to place online order easy and track able during the making of the pizza till packaging and lastly delivery to the front door.

Top level management is responsible;
For Ex;Director or CEO (mastermind of the organisation)
approve a long term plan

Strategic Plans:
- Clarify how the company will serve customers and position
itself against competitors (2-5 years)
Includes; Market Standing, Innovations, Human Resources,Financial Resources, Physical Resources, Productivity,Social Responsibility & Profit Requirements
-Focus on how to achieve goals 3-5 years in future.

Vision
-Long term(5-10 years)
-An inspirational statement of an organization's purpose (2 sentences)

Mission
-Shorter term (2 years)
- Flows from vision

Middle level Management is responsible;
For ex;Division Manager,Department Manager,HR,Finance,Marketing,R&D
create its own budget
- Specify how a company will use resources, budgets and
people to accomplish goals within its mission (6 months to 2 years)
-Set tactical goal (1-2 years0 for special units or department
-Ensure the commitment to strategic plans.

Management by Objectives (MBO):
- Develop and carry out tactical plans
- Discuss possible goals
- Select goals consistent with overall goals
- Jointly develop tactical plans
- meet to review progress

Lower level Management is responsible;
For ex;supervisor
Operational Goals;Expected from departments, work groups and individuals

Operational Plans:
- Tool for daily and weekly operations
- Schedules are important component

- 12 months or less

Principles of Goal-Setting
-Set SMART goals
-Assign specific goals.
-Assign measurable goals.
-Assign doable but challenging goals.
-Encourage participation.
-Use executive assignment action plans, or management by objectives.

Benefits of Organizational Goals:
1. Goals can increase performance
2. Goals help to clarify expectations
3. Goals facilitate the controlling function
4. Goals can increase motivation
5.Boss set higher standard
6. Assessment towards performance.

Management By Objectives (MBO)
- A method of management whereby management and employees define objectives for every department, project and person and use them to monitor performance

Major steps in the MBO process:
Planning
1. Developing Overall Organizational Goals (Top Management)
2. Establishing Specific Goals (Objectives) Middle Management)
Organizing
3. Formulating Action Plans(Middle Management)
Leading
4. Implementing & Maintaining Self-Control(each level)
Controlling
5. Reviewing progress Periodically
6. Appraising Performance(employee performance)

Benefits of MBO
- Manager and Employee efforts are focused on activities that will lead to attainment of objectives
- Performance is improved at all levels of organization
- Employees are motivated
- Departmental & individual objectives are in line with organizational objectives

Barriers/Obstacles To Effective Planning
• Influence of external forces(something we cannot control such as political issue,demographics changes,economic environment and war or natural disaster)
• People's resistance
• Time and cost
• Non-availability of data
• Manager's reluctance/unwillingness to establish goals
• Lack of top management support

The Cost of Planning
1. Management time
● The planning process requires a substantial amount of managerial time and energy

2. Delay in decision-making
● Planning can results in delay in decision making, which must be weighed against the importance of speed in response time.

Ways to Overcome Problem in Corporate Planning
• Problems should be identified and prioritized so that planning objectives can be properly formulated.
• Planning objectives focus planning efforts and provide a framework for evaluating alternative solutions and formulating effective strategies.
• Involves employees in decision making process.
• Encourage strategic thinking through training and practice.
• Communicate the importance of planning.