1) Planning involves establishing goals and determining courses of action to achieve those goals. It requires decision making and looking ahead to the future.
2) There are several key features and nature of planning, including that it is goal-oriented, forward-looking, and involves flexibility. Planning pervades all managerial activities.
3) The planning process involves seven steps - setting goals, analyzing the environment, determining alternatives, evaluating alternatives, selecting the best solution, implementing the plan, and controlling/evaluating results. This process is used by managers to carry out planning.
2. Planning
The process of establishing goals and a suitable course of action
for achieving those goals.
It requires decision making
Planning means looking ahead and chalking out future courses of action to
be followed. It is a preparatory step. It is a systematic activity which
determines when, how and who is going to perform a specific job. Planning
is a detailed programme regarding future courses of action.
The necessity of planning arises because of the fact that business
organizations have to operate, survive and progress in a highly dynamic
economy where change is the rule, changes gives rise to the problems and
throw countless challenges
3. FEATURES OF PLANNING
Planningis goal-oriented
Planning is primary function
Planning is all-pervasive
Planning is mental exercise
Planning is continuous-process
Planning involves decision making
Planning is forward looking
Planning is flexible
Planning is an integrated process
Planning includes efficiency and
effectiveness dimension
4. Nature of Planning
• Planning is a mental activity.
• Planning is goal-oriented
• Planning is forward looking
• Planning pervades all managerial activity
• Planning is the primary function.
• Planning is based on facts
• Planning is flexible.
• Planning is essentially decision making
5. Importance of Planning
According to G.R. Terry, “Planning is the
foundation of most successful actions of all
enterprises.”
Minimizes uncertainty
Emphasis on objectives
Promotes coordination
Facilitates control
Improves competitive strength
Helps in decision making
Encourages innovation
Tackling complexities of modern business
6. Barriers to effective
Planning
Influence of external factors
Non-availability of data
People’s resistance to change
Time and Cost
Constraints
7. Requirements of a Good Plan
Clear objective
Proper understanding
Flexible
Stable
Comprehensive
Economical
9. Planning process
There are seven essential steps in operating planning process.
Managers use this process in carrying out their jobs .
Steps in operating planning process:
1- Setting Goals:
Establish the targets for the short and long range future.
For example: - 25 percent growth over last year sales in present
financial year.
- To increase market share by 5 percent in next five years.
2- Analyzing and evaluating the environment:
Analyze the present position and resources available to achieve
objectives.
- Where are we now?
- What are the limitations in the environment?
- What resources do we have?
- Are there any external factors that can influence the objectives
and there accomplishment?
10. Planning process
3- Determining Alternatives:
Construct a list of possible courses of action that will lead you to
your goal.
4- Evaluating the alternative:
Listing and considering the various advantages and
disadvantages of each of your possible course of action.
5- Selecting the Best solution:
Selecting the course of action that has the most advantages and
the fewest
serious disadvantages.
6- Implementing the Plan:
Determine, who will be involved, what resources will be
assigned how the plan will be evaluated, and reporting
procedures.
7- Controlling and evaluating the Results:
Making certain that the plan is going according to expectations
and making necessary adjustments.
11. TYPES OF PLANS
1) STRATEGIC PLANS
2) TACTICAL PLANS
3) OPERATIONAL PLANS
4) LONG TERM AND SHORT TERM
PLANS
5) PROACTIVEPLANS AND REACTIVE
PLANS
6) FORMAL AND INFORMAL PLANS
7) STANDING AND SINGLE-USE PLANS
8) contingent plans
12. DECISION MAKING
• “ The process of identifying and selecting a
course ofaction to solve a specific problem”
• It connects to the organizations present
circumstances to actions that will take the
organization into future.
• It plays important role in selecting among
the choices available to the manager.
• Decision making deals with problems and
opportunities. A problem may be an
opportunity in disguise.
• Problem is the situation that occurs when
an actual state differs from the desired
state.
13. The Decision making
Process
1. Define the Problem
2. Identify the Limiting or Critical Factors
3. Develop Potential Alternatives
4. Analyse the Alternatives
5. Select the Best Alternative
6. Implement the Solution
7. Establish Control and Evaluation System
18. PERFECT RATIONALITY
The concept of perfect rationality states that
policy makers behave in a logical or rational
manner. This restrictive model of policy making
ignores the complex environmental, problems
of real life policy decisions.
It would require managers to not be influenced
by any cognitive biases, to be able to access all
possible information about potential
alternatives, and have enough time to calculate
and project the benefits and detriments of each
possible choice.
19. BOUNDED RATIONALITY
It is more realistic approach .
It describes the way that humans make decisions that
departs from perfect economic rationality, because our
rationality is limited by our thinking capacity, the
information that is available to us and time. Instead of
making the best choices, we often make choices that are
satisfactory.
Managers make decisions rationally but are bounded by
their ability to process information. Because they cant
possibly analyse all information on all alternatives,
manager satisfice rather than maximize i.e. they accept the
solutions that are good enough.
They are being rational within the limits of their
ability to process information.
20.
21. Advantage of bounded rational
There is abundant empirical evidence that it is
significant.
Also the models of bounded rationality have examined
themselves in a wide range of impressive work.
The standard justifications for putting on bounded
rationality are improbable and their logic cuts both
ways.
Deliberation about an economic decision is a pricy
activity, and good economics needed that we entertain
all costs in bounded rational decision making
