Planning

Planning is the beginning of the process of

management. A manager must plan before he can possibly
organise, staff, direct or control. Because planning sets all
other functions into action, it can be seen as the most basic
function of management. Without planning other functions
become mere activity, producing nothing but chaos. This has
been called the principle of primacy of planning.
Nature and Scope of Planning

Planning is an intellectual process which

requires a manager to think before acting. It is thinking in
advance. It is by planning that managers of organisations
decide what is to be done, when it is to be done, how it is to
be done, and who is to do it.
Nature and Scope of Planning

Planning is a continuous process Koontz and

O’Donnell rightly observe that like a navigator constantly
checking where his ship is going in the vast ocean, a manager
should constantly watch the progress of his plans.
Nature and Scope of Planning

A plan must be flexible. By flexibility of a plan is

meant its ability to change direction to adapt to changing
situations without undue cost. Because circumstances change.
Nature and Scope of Planning

Planning is an all-pervasive function. In other

words, planning is important to all managers regardless of
their level in the organisation.
Objectives and Significance of Planning
• Minimises Risk and Uncertainty:

In today’s increasingly complex

organisations, intuition alone can no longer be relied upon as a
means for making decisions. This is one reason why planning has
become so important. By providing a more rational, fact-based
procedure for making decisions, planning allows managers and
organisations to minimise risk and uncertainty.
Objectives and Significance of Planning
• Leads to Success:

Planning leads to success by doing beyond

mere adaptation to market fluctuations. With the help of a
sound plan, management can act proactively, and not simply
react. It involves an attempt to shape the environment on the
belief that business is not just the creation of environment but
its creator as well.
 Objectives and Significance of Planning
• Focuses Attention on the Organisation’s Goals:

Planning helps the manager to focus attention

on the organisation’s goals and activities. This makes it easier to
apply and coordinate the resources of the organisation more
economically. The whole organisation is forced to embrace
identical goals and collaborate in achieving them.
Objectives and Significance of Planning
• Facilitates Control:

In planning, the manager sets goals and

develops plans to accomplish these goals. These goals and plans
then become standards or benchmarks against which performance
can be measured. The function of control is to ensure that the
activities conform to the plans. Thus, controls can be exercised
only if there are plans.
Objectives and Significance of Planning

• Trains Executives:

Planning is also an excellent means for

training executives. They become involved in the activities of
the organisation, and the plans arouse their interest in the
multifarious aspects of planning.
Types of Planning

In a large organisation, there are

various types of plans that are arranged in a hierarchy within
the organisation. This means that plans at each level have to
be consistent with and contributively to the achievement of
plans above them.
Vision

At the top of this hierarchy is the vision. This is the dream

that an entrepreneur creates about the direction that his
business should pursue in future. It describes his aspirations,
beliefs and values and shapes organisation’s strategy.
Mission
• Mission, which is the unique aim of an organisation that sets it apart
from others of its type. It is an organisation’s specialisation in some
area—service, product or client, which decides the organisation’s
scope of business.

• The mission of Asea Brown Boveri Ltd. (ABB) is as follows: “… to be a

global leader … most competitive, competent, technologically
advanced and quality-minded electrical engineering company.”
Objectives

• Objectives are goals or aims that the management wishes

the organisation to achieve in pursuit of its mission. These
are the end points or pole-star towards which all business
activities like organising, staffing, directing and controlling
are directed.
Characteristics of Objectives

• Objectives are multiple in number

• Objectives are either tangible or intangible

• Objectives have a priority

• Objectives are generally arranged in a hierarchy

• Objectives sometimes clash with each other

Strategy
• According to Schendel and Hatten, the definition of business
strategies is “the basic goals and objectives of the organization; the
major plan of action chosen to reach its goals as well as objectives”.
Strategy

• Strategy essentially defines the relationship between the

firm and its environment. By determining a strategy, one can
find answers related to the target customer base and the
market segment they would represent. The main purpose of
formulating a strategy is to create an edge in the competitive
environment.
Strategy

Two important activities involved in strategy formulation

1. Environmental appraisal

2. Corporate appraisal.
1. Environmental appraisal
An analysis of the relevant environment
results in the identification of threats and opportunities.
• Political and legal factors:
• Economic factors:
• Competitive factors
• Social and cultural factors
2. Corporate Appraisal
• This involves an analysis of the company’s strengths and weaknesses.
A company’s strengths may lie in its outstanding leadership, excellent
product design, low-cost manufacturing skill, efficient distribution,
efficient customer service, personal relationship with customers,
efficient transportation and logistics, effective sales promotion, high
turnover of inventories and/or capital, ability to influence legislation,
ownership of low-cost or scarce raw materials, and so on.
Operational Plans

These plans act as means of implementing the organisation’s

strategy. They provide the details of how the strategy will be
accomplished. There are two main types of operational plans:

1. Standing plans

2. Single-use plans
Standing plans

Standing Plans:
These plans are designed for situations that
recur often enough to justify a standardised approach. For
example, it would be inefficient for a bank to develop a new
plan for processing a loan application of each new client.
Standing plans
The major types of standing plans are

• Policies

• Procedures

• Methods

• Rules
Policies

A policy is a general guideline for decision-

making. It sets up boundaries around decisions, including
those that can be made and shutting out those that cannot.
Procedures

Policies are carried out by means of more

detailed guidelines called “procedures”. A procedure provides
a detailed set of instructions for performing a sequence of
actions involved in doing a certain piece of work.
Methods

A method is a prescribed way in which one step of

a procedure is to be performed. The specified technique to be
used in screening the applications or conducting a written test
is a method, whereas the sequence of steps involved in the
recruitment of personnel constitutes a procedure.
Rules

Rules are detailed and recorded instructions that a

specification must or must not be performed in a given
situation.
2. Single-use Plans
These plans, as their name suggests,
are developed to achieve a specification, when that end is
achieved, the plan is dissolved.

The major types of these plans are

• Programmes

• Budgets.
Programmes

Programmes are precise plans or definite

steps in proper sequence which need to be taken to discharge
a given task. In other words, programmes are drawn in
conformity with the objectives and are made up of policies,
procedures, budgets, etc.
Budgets
According to the Institute of Costs and Works
Accountants, London, a budget is “a financial and/or
quantitative statement prepared prior to a definite period of
time, of the policy to be during that period for the purpose of
obtaining a given objective.”
Process of Planning

1. Identify problems and needs

2. Develop goals and objectives

3. Develop alternative strategies

4. Select strategies and develop a detailed plan

5. Design a monitoring and evaluation plan

Barriers to Effective Planning

• Resistance to Change

• Disjointed Team Dynamics

• Lack of Motivation

• Inability to be Objective
Barriers to Effective Planning

• No Clear, Achievable Goals

• Indecision & Rigidity

• Encourage Ownership

• Facilitate Team Cohesion

Planning Premises
Planning combines forecasting with the
preparation of scenarios and how to react to them. Planning is
a very important tool for project management as well as time
management. Planning is preparing a sequence of steps to be
taken to achieve some specific goal or objective. This is like
putting your ladder to your goal, defining your steps towards
your goal.
Types of Planning Premises

1. Internal Premises and External Premises

2. Controllable, Semi-controllable and Uncontrollable Premises

Internal Premises

Internal Premises come from the

business itself. It includes the skills of the labour force,
investment policies of the company, management style, sales
forecasts, etc.
External Premises

External Premises come from the

external environment. That is economic, technological, social,
political and even cultural environment. External premises
cannot be controlled by the business.
Controllable, Semi-controllable and Uncontrollable Premises

• Controllable Premises are fully controlled by the management. They

include factors like materials, machines, and money.

• Semi-controllable Premises are partly controllable. They include

marketing strategy.

• Uncontrollable Premises as the name suggests are those over which the
management has absolutely no control. Take for example weather
conditions, consumer behaviour, natural disasters, wars, etc.
Decision-Making
Managers have alternatives available
when they are making a decision. It does not require a wise
manager to reach a decision when there are no other possible
choices. It does require wisdom and experience to evaluate
several alternatives and select the best one.
Types of Decisions
1. Programmed Decisions

2. Non-Programmed Decisions

3. Operational Decisions

4. Organizational Decisions

5. Personal Decisions

6. Routine Decisions
Types of Decisions
7. Strategic Decisions

8. Policy Decisions

9. Individual Decisions

10. Group Decisions

11. Major Decisions

12. Minor Decisions

1. Programmed Decisions
Programmed decisions are repetitive in nature.
Such decisions deal with simple, common, frequently
occurring problems that have established procedures. These
decisions are taken based on the existing policy, rule or
procedure of the organization. For example: making purchase
orders.
2. Non-Programmed Decisions

Non-programmed decisions are not routine in

nature. They are related to exceptional situations for which
there are no established procedure. For example- Issues
relating to declining market share, increasing competition, etc.
fall in this category.
3. Operational Decisions
Operational or tactical decisions relate to the present issues or
problems. The main purpose is to achieve high degree of
efficiency. Better working conditions, effective supervision,
prudent use of existing resources, better maintenance of the
equipment, etc. fall in this category.
4. Organizational Decisions

Decisions taken by managers in the ordinary

course of business in their capacity as managers are
organizational decisions. For example: decisions regarding
introducing a new incentive system.
5. Personal Decisions
Managers do take some decisions
which are purely personal in nature. However, their impact
may affect the organization also. For example: the manager’s
decision to quit the organization, though personal in nature,
may create some problems for the organization.
6. Routine Decisions
Tactical or routine decisions are
made repetitively following certain established rules,
procedures and policies. They neither require collection of
new data nor conferring with people.
7. Strategic Decisions
Strategic or basic decisions, on the
other hand, are more important and so they are taken
generally by the top management and middle management.
The higher the level of a manager, the more strategic
decisions he is required to take.
8. Policy Decisions
Policy decisions are of vital importance
and are taken by the top management. They affect the entire
enterprise.
9. Operative Decision
A decision which relates to day-to-
day operation of an organisation is known as operative
decision. This type of decision is taken by middle level
management people normally.
10. Individual Decisions
When a decision is taken by an individual
in the organisation, it is known as individual decision. Such
decisions are generally taken in small organisations and in
those organisations where autocratic style of management
prevails.
11. Group Decisions

Groups or collective decisions refer to the

decisions which are taken by a group of organisational
members, say Board of Directors or a Committee.
12. Major Decisions

Major decision relates to the purchase of

fixed assets with more value. The purchase of land and
building is an example of major decision. This decision is taken
by the top management.
13. Minor Decisions

Minor decision relates to the

purchase of current assets with less value. Purchase of pencil,
pen, ink, etc., are some of the examples of minor decision.
This decision is taken by lower level management people.
Process of Decision-Making
Seven steps of the decision-making process
1. Identify the decision
2. Gather relevant information
3. Identify the alternatives
4. Weigh the evidence
5. Choose among the alternatives
6. Take action
7. Review your decision
1. Identify the decision

To make a decision, you must first identify the

problem you need to solve or the question you need to
answer. Clearly define your decision. If you misidentify the
problem to solve, or if the problem you’ve chosen is too
broad, you’ll knock the decision train off the track before it
even leaves the station.
2. Gather relevant information
Once you have identified your decision, it’s time to
gather the information relevant to that choice. Do an internal
assessment, seeing where your organization has succeeded
and failed in areas related to your decision. Also, seek
information from external sources, including studies, market
research, and, in some cases, evaluation from paid
consultants.
3. Identify the alternatives
With relevant information now at your
fingertips, identify possible solutions to your problem. There is
usually more than one option to consider when trying to meet
a goal. For example, if your company is trying to gain more
engagement on social media, your alternatives could include
paid social advertisements, a change in your organic social
media strategy, or a combination of the two.
4. Weigh the evidence
Once you have identified multiple
alternatives, weigh the evidence for or against said
alternatives. See what companies have done in the past to
succeed in these areas, and take a good look at your
organization’s own wins and losses. Identify potential pitfalls
for each of your alternatives, and weigh those against the
possible rewards.
5. Choose among the alternatives

Here is the part of the decision-making process

where you actually make the decision. Hopefully, you’ve
identified and clarified what decision needs to be made,
gathered all relevant information, and developed and
considered the potential paths to take. You should be
prepared to choose.
6. Take action

Once you’ve made your decision, act on it!

Develop a plan to make your decision tangible and
achievable. Develop a project plan related to your decision,
and then assign tasks to your team.
7. Review your decision
After a predetermined amount of time—which you defined in
step one of the decision-making process—take an honest look
back at your decision. Did you solve the problem? Did you
answer the question? Did you meet your goals?
If so, take note of what worked for future reference. If not,
learn from your mistakes as you begin the decision-making
process again.
Management Information System
A management information system (MIS) is
used for processing data. In an institution, employees, managers,
and staff access MIS. Employees use MIS for day-to-day
operations, to print invoices, bill payments, or performance
reviews. In addition, they use MIS to compare, analyse, and store
data—a database for information. Thus, MIS helps firms in taking
decisions rapidly and accurately.
Management Information System

MIS is a System or Process that provides the information

necessary to manage an organization effectively. MIS should
have a clearly defined framework of guidelines, policies or
practices, standards and procedures for the organization.
These should be followed throughout any of the organization
in their development , maintenance and use.
Elements of Management Information System
1. Data

2. People

3. Business Processes

4. Hardware

5. Software
Elements of Management Information System

1. Data:
Data is crucial for every business. Unfortunately, in
the internet era, firms are bombarded with too much data,
not just relevant data.
Elements of Management Information System

2. People:

An MIS is designed to be used by firm employees.

managers, accountants, executives, and staff for day-to-day
operations.
Elements of Management Information System

3. Business Processes:
Information systems simplify complex
processes—the centralization of operations achieves this.
Elements of Management Information System

4. Hardware:

Hardware is an indispensable component of MIS.

Elements of Management Information System
5. Software:

MIS software is categorized into two—system

software and application software. The term system software
refers to operating systems like windows and iOS. Application
software is more specific—banking systems, accounting
applications.
The requirements of MIS are as follows

Every MIS requires a database that stores

information, documents, files, and reports. This could be
employee details, performance reviews, records, old
presentations, and new projects.
The requirements of MIS are as follows

For installing an information system, firms

need to make an Initial expenditure. Further, the MIS requires
timely maintenance and employee training.
The requirements of MIS are as follows

Information systems are useful when

employees use them regularly. For that, employees need
access, and the system should be maintained.
Use of MIS
MIS supplies decision makers with facts and enhances the
overall decision making process. MIS also enhances job
performance throughout the organization as data and
information availability and processing done on time, this
helps the board and management in taking strategic decisions.