Presented By:

Manish Kumar

1
 Contents

Nature

Importance and purpose of planning process

Steps in Planning and Planning Premises

Types of plans

Objectives

Decision Making

Types of planning

Hierarchy of plans
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 2
 Planning (also called forethought) is the process of

thinking about and organizing the activities required to

achieve a desired goal.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 3

 “If you don't have daily objectives, you qualify as a

dreamer.” - Zig Ziglar

 “Planning is deciding in advance what is to be done. It

involves the selection of objectives, policies, procedures

and programs from alternatives” - M E Harley
 “Planning is a trap laid down to capture the future” - Allen

 “If you don't know where you are going, how can you

expect to get there?” - Basil S. Walsh

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 4

Nature or Features or Characteristics of Planning

 Planning is goal oriented

 Plans are made in order to seek certain predetermined

goals.
 Planning is a primary function

 “Planning provides the basic foundation from which all

future management functions arise”

 Planning is a thinking process

 Involves imagination, foresight and sound judgement.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 5
Planning is flexible

 Planning should not be rigid.

 Planning is all-pervasive

 Planning is an on-going activity at all levels of an

organizational hierarchy, right from CEO to first line

managers.
Planning is a continuous process

 Planning involves continuous assessment and reassessment

of the resources, directions, opportunities and problems of

the organization while converting them to achieve goals.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 6
 Planning involves choice

 Planning always involves choices among various alternatives.

 If there is only one way of doing something, there is no need

for planning, planning arises only when there are alternatives

available.
 Planning is rational

 Planners should be objective and unemotional in their

approach to planning.
 Aim would be to achieve efficiency and effectiveness while

optimally deploying resources.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 7
 Planning is an integrated process

 Plans are structured in a logical way such that every

lower level plan serves as a means to accomplish higher

level plans.

 Plans are inter-related, interdependent and mutually

supportive.

 Planning is futuristic

 Planning attempts to peep into the future, analyses it and

prepare Prakhyath
for it.Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 8
 Importance and Purpose of Planning
 Planning provides direction

 Planning provides clear sense of direction and purpose of

activities of an organization.
 Planning minimizes risk and uncertainty

 In fast changing organizations, planning based on hard facts

and data help managers to reduce risk and uncertainties.

 Planning ensures co-ordination

 Planning helps to establish co-ordinated efforts from various

divisions, departments and people.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 9
 Planning leads to economy

 Planning helps accomplish an optimal utilization of physical

and human resources, leading towards cost reduction, higher

efficiency and productivity which lead to better economy.
 Planning facilitates decision-making

 Planning helps in providing guidelines and thus facilitate

decision-making.
 Planning reduces overlapping and wastage of efforts

 Planning avoids duplication of efforts, and overlapping of

tasks and responsibilities, reducing wastage.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 10
 Planning encourages innovation and creativity

 Planning helps to remain competitive.

 Innovation and creativity are like ‘trump cards’ in competitive

world.
 Planning facilitates control

 Control is key to success of any organization, and in order to

control there has to be a plan.

 Planning improves morale

 If Employees participate in planning process it boosts their

morale and develops a broad mentality and thinking of achieving

organizational goals.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 11
 Steps in Planning
Step 1: To establish objectives which are verifiable
Step 2: To establish planning premises
Step 3: To determine alternative course of action
Step 4: To evaluate the alternatives and select the best
Step 5: To formulate derivative plans
Step 6: To secure co-operation and participation of all
employees
Step 7: To measure and control the progress through follow-up
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 12
 Steps in Planning

Step 1: To establish objectives which are verifiable

 Identify goals of the organization

 Internal(Financial position of company, human resources

available, manufacturing facility, company image, etc.)

and external environment(Government rules and
regulations, Socio-economic condition of the society,
competition level, suppliers reliability) of the
organization has to be studied
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 13
Step 2: To establish planning premises
Planning premises are assumptions of future market

conditions which become the basis for current planning

process.
Planning premises usually relate to cost and availability

of raw materials, labour, power, product demands,

population trends, technology growth, government
policies etc.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 14

Step 3: To determine alternative course of action
 Search and list all possible alternatives in order to be

compared and analytically evaluated.

Step 4: To evaluate the alternatives and select the best

 Select most suitable and best course of action.

 Alternatives have to be compared and evaluated with

respect to their expected contribution to organizational

goals.
 Evaluation and selection is often done with the help of

quantitative
Prakhyathtechniques and operations
Rai, Asst. Professor, Department research.
of ISE, SCEM, Mangaluru-575007 15
Step 5: To formulate derivative plans
Management has to formulate derivative plans or

secondary plans to support the basic plan.

Derivative plans are sub plans or departmental plans.

For Example, if the production plan of TATA

MOTORS is to produce a million of Nano’s in the next
five years, the derivative plans would be plans for
various departments like fabrication, forging, casting,
purchase, assembly etc.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 16
Step 6: To secure co-operation and participation of all
employees
 Involving employees in planning process enhances their co-

operation and participation.

 Continuous suggestions, complaints and criticisms must be

solicited from the employees.

Step 7: To measure and control the progress through

follow-up
 Continuous evaluation of plans help in identifying recurring

mistakesPrakhyath
and Rai,
avoiding them in future.
Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 17
 Planning Premises
 Planning premises are assumptions of future market

conditions which become the basis for current planning

process.
 Planning premises have to be established even before

planning.
To establish planning premises means to forecast future

business conditions under which a plan has to operate.

Planning premises provide bedrock upon which the plans are

based. Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 18

 Classification of Planning Premises

1. Internal and External premises

2. Tangible and Intangible premises

3. Controllable, Semi-controllable and Uncontrollable

premises

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 19

 Internal and External Premises
Internal premises
 Internal premises are those factors which exist within
organization and are generally under the control of management.
 Internal premises include – men, money, machinery, materials

and methods.

External premises
 External premises are those factors which exist outside the

purview of the organization and are generally not under the

control of the management.
 External premises include government policies, general economy

of country, technological trends, climatic conditions etc.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 20
 Tangible and Intangible Premises
Tangible premises
 Tangible premises are those which are quantifiable in nature.

 For Example, production quality, quality standards, capital

required, machinery to purchase.

 These info. Is needed for planning and are quantifiable and

measurable in nature.

Intangible premises
 Intangible premises are those which are abstract and non-

quantifiable in nature.
 For Example, company image, brand loyalty, political situation

etc., are needed for planning but are qualitative in character.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 21
Controllable, Semi-controllable and Uncontrollable Premises

Controllable premises
 Controllable premises are those factors which are said to be

completely under the control of management.

 For Example, Managerial policies, rules and regulations etc.

Semi-controllable premises
 Controllable premises are those which management has

partial control.
 For Example, workers attitude and efficiency, firms pricing

policy, firms marketing programs, raw materials etc.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 22

Uncontrollable premises
 Internal premises are those factors over which management

has absolutely no control.

 For Example, Natural calamities, new inventions, wars,

strikes imposition of emergency, government etc.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 23

 Types of Plans

Plans

Standing Plans Single Use Plans

Objectives Programmes
Policies Schedules
Strategies Projects
Procedures Budgets
Methods Rules

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 24

 Objectives
 Objectives, goals, aims, purposes, missions are the terms with

same meaning.
 Objectives are goals or end-points towards which all business

activities are directed.

 Objectives or goals are the desirable end results planned by the

management or administration and expected to be achieved by

the organization.
 Objectives are the products of specific, concrete thinking, they

commit employees and organization to verifiable

accomplishments.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 25
 Characteristics of Objectives
i. Objectives are multiple in nature
 Organizations have multiple objectives due to many areas of

business operations where organizations try to set their

goals.
 Key areas for setting objectives of performance are;

• Market Standing of the company

• Innovation achieved by the company
• Productivity in various parameters
• Physical and financial resources
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 26
 • Profitability of business
• Managerial performance and development
• Worker performance and attitude
• Fulfillment of public responsibility
 Objectives are always multiple in nature in order to get a

right balance.

ii. Objectives have a hierarchy

 we have corporate objectives of the total enterprise at the

top, followed by divisional or departmental objectives, then

each section and finally individual objectives. Objectives at
all levels serve as an end and as a means.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 27
iii. Objectives form a network
 Objectives of the organization across various dept. and
along the hierarchy are all inter-related and independent.

iv. Objectives may be long-range or short-range

 Long range objectives are vague. For Example, survival

and growth of the company, diversification plans,

expansion plan etc.
 Short range objectives are specific and definite. For

Example, Profit maximization, inventory control, ensuring

adequate cash flows etc.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 28
v. Objectives are either tangible or intangible
 Objectives could be tangible which means they could

be quantifiable. For Example, productivity, profitability

etc.
 Objectives could be intangible which means they are

qualitative in nature and cannot be quantified. For

Example, Workers morale, company image etc.
vi. Objective have priority
vii. Objectives some times clash with each other
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 29
 Importance or Advantages of Objectives
 Objectives provide directions to the individual efforts and

activities of an organization.
 Provide strong basis for determining policies, procedures,

strategies, programs, budgets and other plans.

 Help in effective delegation of authority.

 Serve as standards for the evaluation of actual performance.

 Help in coordinating the efforts of various departments and

people.
 Help in achieving personal goals.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 30
 Policies
 Policies are guidelines set up by the company for managerial

decision making.
 ‘A policy is a verbal, written or implied overall guide setting

up boundaries that supply the general limits and directions in

which managerial actions will take place’.
 For Example,

 Policy of recruiting only MBA’s from top 10 institutes.

 Policy of promotion of in-house employees.

 Policy on selling goods only for cash and not credit.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 31

 Strategies
 Strategies specify the route taken to achieve company

objectives and policies.

 Strategy comprises of;

 a course of action

 a commitment of resources

 a detailed blue print of all moves, initiatives, responses with

timing concern.
 Strategy is a unified and critical plan of action to achieve a

goal
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 32
 Strategies Cont.
 A Strategy is a master plan for moving the organization

towards its objectives through the complex and volatile

environment of market forces.
 Strategy involve innovation and creativity.

 For Example;
 Strategy for wining an approval in the board meeting.

 Strategy to make the best use of media coverage.

 Strategy to convince the lecturer that he should let you free

in the class! etc.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 33

 Procedures
 Procedures are action guidelines which specify how particular

activity has to take place.

 Procedures provide chronological step-by-step sequence of

required actions in order to achieve a certain goal or policy.

 A procedure lays down the manner and method by which work

is to be performed in a standard or uniform way.

 Procedure ensures higher than average level performance,

which results in work simplification and eliminates duplication

of efforts.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 34
 Procedures Cont.
 A good procedure should be;

 Purposeful and functional

 In written form

 Simple and clear

 Flexible

 Exposed to periodic review

 For Example;

 Procedure for recruitment of employees.

 The CET procedure for engineering admission.

 Procedure for processing customer complaints.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 35
 Methods
 Methods are basically sub-units of procedure.

 Break-up of each steps of a procedure into sub-steps.

 Methods indicate the simplified and standardized techniques to

be employed in carrying out a particular task in the best way.

 Methods are products of research, experimentation and

analysis.
 For Example;

 Method of conducting a written test for recruitment.

 Method employed for failure analysis.

 Method Prakhyath
employed Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007
for distracting the professor. 36
 Rules
 Rules are standard guidelines which specify what is good and

what is bad for an employee/organization.

 Rules are always established to direct or restrict action in order

to govern the behavior of individuals.

 Rules if violated are viewed seriously and penalties are imposed.

 For Example;

 Rule of ‘No Smoking’

 Rule of formal dressing

 Rule of not using cell phones in academic promises.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 37
 Programmes
 A program is a precise plan which lays down the operations to

be carried out to accomplish a given work.

 Program is aggregate of several related action plans that have

been designed to accomplish a mission within specified time.

 A program is a comprehensive plan that includes a complex

set of goals, procedures, methods, strategies etc.

 For Example;

 Program of organizing an international seminar.

 An Expansion program for a company.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 38
 Schedules
 Schedules are time-tables which clearly specify when, what

and where each element of work is carried out.

 Aim of scheduling is to plan the sequences of work so that all

units of work can be systematically arranged towards their

completion by due date.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 39

 Projects
 Project is small program. Several projects may also make up a

program.
 Projects are individual portions of a general program which

clear-cut and relatively distinct.

 For Example;

 A Software project part of a larger program.

 SPSS Project work

 Demolition Project as part of a encroachment-removal

program.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 40
 Budgets
 A Budget is a written plan of future activities of the company

in monetary terms.
 Budgets are managerial tools for planning, programming, and

controlling business activities.

 Budget defines the anticipated cost of attaining an objective.

 For Example;

 Sales Budget

 Production Budget

 Advertising Budget
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 41
 Budgets Cont.
 General features of budget are:

 It is statement in terms of money.

 It is prepared for a definite future period.

 It is prepared in advance.

 It gives an overall view of the business in terms of sales,

production and expenditure.

 It helps in anticipation and control of financial requirements

of different branches of business.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 42

 Decision Making
 In an organization decisions are routinely taken in operations,

marketing, maintenance, R & D, transportation, finance,

human resource etc.
 Decision making is the cognitive process leading to the

selection of a course of action among alternatives.

 Every decision making process produces a final choice. It can

be an action or an opinion.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 43

 Characteristics of Decision Making

 Decision making is goal oriented

 Decision making involves alternatives

 Decision making is an analytical intellectual process

 Decision making is a continuous activity

 Decision making is an all pervasive function

 Decision making is situational and dynamic.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 44
 Decision Making Process
Organizational
Objectives

Define the Establish Formulate

Objectives Criteria Model

Select the best Evaluate Generate

Alternative Alternatives Alternatives

Implement the
Decision
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 45
 Decision Making Process
 To define the problem and parameters influencing it

 To establish criteria for decision making

 To formulate a model considering all decision variables

 Physical model – architects idea of a building

 Computer Model – CAD model of cars and machines

 Mathematical Models – Forecasting model, simplex

model, transportation model etc.

 Verbal Models – Words and description

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 46

 Decision Making Process
To generate alternatives solution by varying parameters
 By varying the values of the parameters several alternatives

can be framed.
Evaluate all alternatives – Selecting the course of action

that best satisfies the criteria

 Select the best alternatives

Implement the decision and monitor the result.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 47

 Decision Methodology
 Engineers and managers are expected to use a number of

quantitative technique to serve as basis for decision making.

 Type of quantitative technique depends on nature of variables

influencing the problem.

 In some cases,

 All information about decision variables are known

 Some information about decision variables are known

 No information about decision variables are known

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 48

 Several Quantitative Techniques
 Variables with complete certainty

 For Example: Break-even analysis, Scheduling, Linear and

Non-linear programming, Dynamic programming, Cost benefit

analysis etc.
 Variables with risk and partial certainty

 For Example: Forecasting, Simulation, Queueing theory,

Decision trees, Regression, Aggregate planning etc.

 Variables with extreme uncertainty

 For Example: Game theory, Flip of coin, Astrology etc.

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 49
 Types of Planning

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 50

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 51
 Strategic Planning Tactical Planning Operational Planning

Long range plans Intermediate range plans Short range plans

Time Frame: 3 or more

Time Frame: 2-3 years Time Frame: one year
years
Responsibility of top Responsibility of middle Responsibility of lower
Management management level management
Concerned with Concerned with
Concerned with
objectives, policies, procedures, projects and
schedules and methods
programmes strategies
Responsible for Responsible for covering
Responsible for overall integrating the work of day-to-day operation and
progress of the company various department of the implementing internal
organization goals
Focus on planning and Focus on directing and
Focus on co-ordination
forecasting controlling

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 52

 Types of Planning

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 53

 Hierarchy of Plans

Organizational Goals

Strategic Goals Strategic Plans

Tactical Goals Tactical Plans

Operational Goals Operational Plans

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 54

 Thank you

Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007 55