01. Managerial Planning
Manager's most essential task is to see that everyone understands the group's purpose and objectives and its methods to attaining them. Planning involves selecting the missions and objectives and actions to achieve them. Planning requires decision making, which involves, choosing from among alternative future course of action. Planning also strongly implies managerial innovation. Planning and controlling are closely interrelated.
02. Planning Process
1. Being aware of opportunity. In terms of The Market, Competition, What customer wants, Our Strength and Weaknesses. Managers must understand what problems they wish to solve and why, and know what they expect to gain.
2. Setting long term and short term objectives. Where we want to be and what we want to accomplish and when. (No short-run plan should be made unless it contributes to the achieving of the relevant long-range plan.). The objectives of lesser departments will be more accurate if subdivision managers understand the overall enterprise objectives and the derivative goals.
3. Considering planning premises. In what environment (internal or external) will our plan operate? (The more thoroughly individuals charged with planning understand and agree to utilize consistent planning premises, the more coordinated enterprises planning will be)
4. Identifying alternatives. What are the most promising alternatives to accomplishing our objectives? (There is seldom a plan for which reasonable alternatives do not exist, and quite often an alternative that is not obvious proves to be the best. The more common problem is not finding alternatives but reducing the number of alternatives so that the most promising may be analyzed.)
5. Comparing alternatives in the light of objectives sought. Which alternative will give us the best chance of meeting our goals at the lowest cost and highest profit?
6. Choosing an alternative. Selecting the course of action we will pursue.
7. Formulating supportive plans. Such as plan to Buy equipment, material, hire and train workers develop a new product.
8. Numberizing plans by making budgets. Develop such budgets as: volume and price of sales, operating expenses necessary for plans, expenditure for capital equipment.
03. Types of Plans
1. Purposes or Missions: Identifies the basic function or task of an enterprise or agency or any part of it.
2. Objectives or Goals: Ends towards which the activity is aimed. They represent not only the end points of planning but also the ends towards which organizing, staffing, leading and controlling are aimed.
3. Strategies: Determination of the basic long-term objectives of an enterprise and the adoption of course of action and allocation of resources necessary to achieve these goals.
4. Policies: These are general statements or understanding that guide or channel thinking in decision making. Policies 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.
5. Procedures: These are plans that establish a required method of handling future activates. They are chronological sequences of required actions. They are guide to action, rather than to thinking, and they detail the exact manner in which certain actives must be accomplished.
6. Rule: Rules out specific required actions or non actions, allowing no discretion.
7. Programs: Complex 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. They are ordinarily supported by budgets.
8. Budget: Budget is a statement of expected result expressed in numerical terms. Financial operating budget is often called Profit Plan. A budget may be expressed in financial terms, in terms of labor-hours units of product, or machine-hours or in any other numerically measurable term.
Important ends toward which organizational and individual activates are directed. Whether they are long-term or short-term, broad or specific, the emphasis is on verifiable objectives; that is, at the end of the period it should be possible to determine whether or not the objective has been achieved. Objectives need to be supported by the sub-objectives. Thus objectives form a hierarchy as well as a network.
Relationship of objectives and the organizational Hierarchy
Objectives need to be supported by the sub-objectives. Thus, objectives form a hierarchy as well as network.
1. Socio-Economic Purpose: It can be vision, purpose of the organization in terms of beneficial to society
and organization both (social responsiveness) (Decided by board of directors, top-level mangers)
2. Mission: What organization is doing and what it wants to achieve. (Decided by board of directors, top-level managers)
3. Overall Objectives of the Organization: This includes long range objectives and strategic plans. (Decided by board of directors, top-level managers)
4. More specific overall Objectives: This includes KRA(Key Result Area), Market Standing, Innovation, productivity, profitability etc. (Decided sometime by board of directors or top and middle level managers)
5. Division Objectives: (Decided sometime by top level mangers, or middle level managers)
6. Department or Unit Objectives: (Decided middle and lower level managers)
7. Individual Objectives: This include performance and Personal development objectives (Decided by lower level managers)
The Process of Setting Objectives
In top down approach, upper level mangers determine the objectives for subordinates, while in the bottom-up approach; subordinates initiate the setting of objectives for their positions and present them to their superiors. Most of the time, bottom-up approach is underutilized but that either approach alone is insufficient.
05. How to Set Objectives
Quantitative and Qualitative Objectives
To be measurable, objectives must be verifiable. At the end of the period, how do I know if the objective has been accomplished? Example, Non verifiable Objectives: To make a reasonable profit. Verifiable Objectives: To achieve a return on investment of 12% at the end of the current fiscal year.
Checklist for Manager Objectives
1. Do the objectives cover the main features of may job?
2. Is the list of objectives too long? If so, can I combine some objectives?
3. Are the objectives verifiable? Whether or not they have been achieved?
4. Do the objective indicate:
a. Quantity (how much)?
b. Quality (how well or specific characteristic)?
c. Time (when)?
d. At what cost?
5. Are objectives challenging, yet reasonable?
6. Are priorities assigned to the objectives (ranking, weighting, etc)?
7. Does the set of objectives also included:
a. Improvement objectives?
b. Personal development objectives?
8. Are the objectives coordinated with those of other managers and organizational units? (Are they consistent with objectives of my superior, my department, the company)?
9. Have I communicated objectives to all who need to be informed?
10. Are the short-term objectives consistent with long-term aims?
11. Are assumptions underlying the objectives clearly identified?
12. Are the objectives expressed clearly, and they in writing?
13. Do the objectives provide for timely feedback so hat I can take any necessary corrective steps?
14. Are my resources and authority sufficient for achieving the objectives?
15. Have I given the individuals who are expected to accomplish objectives a chance to suggest their objectives?
16. Do my subordinates have control over aspects for which they are assigned responsibility?
06. Evolving Concepts in Management by objectives (MBO)
MBO is 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. Among benefits it result in better managing, often forcing mangers to clarify the structure of their organizations, encouraging people to commit themselves to their goals, helping them to develop effective controls. Some of it weaknesses are that managers sometimes fail to explain the philosophy of MBO to subordinates and give them guidelines for their goal setting. In addition, goals themselves are difficult to set, tend to be short-run and may become inflexible despite changes in the environment. People, in their search for veridicality, may overemphasize quantifiable goals.