1. Principles of Management Planning & Organizing

2. PLANNING

3. Types of Plans Specify actions toachieve tactical plans(very short-term) OperationalPlans Steps for achieving strategic objectives(usually one year or less) TacticalPlans StrategicPlans Establish long-rangeobjectives

4. Types of Plans Mission / Purpose (Strategic Plans) The ‘reason for existence’ of an organization

5. Type of Plans Objectives/ Goals The end towards which activity of an organization is aimed, e.g. For a Business enterprise – profit, surplus creation; For an vocational NGO – to provide means of livelihood to maximum people in the area they are serving Strategies Determination of the long term objectives and adoption of a course of action Gives a frame work for linked action-plans, communicated systematically to guide thinking and actions.

6. Type of Plans Policies “Plans” that are general directional statements (or understandings) that guide/help in decision making: Repeat decisions taken ‘reflexively’; Delegation of tasks without loss of control Some discretion is permissible depending on circumstances thus encouraging initiative within limits and situational adjustments; Issues with “Policy” Seldom documented in writing Subject to interpretations

7. Type of Plans Procedures Plans that are chronological sequences of required actions: task-oriented in nature; Cuts across department boundaries (sub-systems) in an organization: e.g. attendance, applying for leave Procedures and policies are inter related: e.g. authorization for paid leave Rules Specific actions or non-actions allowing no discretion What is acceptable and what is not?

8. Type of Plans Programmes Action plans (mainly non-routine or for changed activities) including, task assignments, steps to be taken, resources to be deployed etc. to achieve a (new/renewed) goal; Primary program may require supporting programs, spreading across the enterprise; Perfect coordination between supporting & primary programs essential to avoid delays, unnecessary costs and expected roll-out. Programs are a complex of (sub)goals, policies, rules and other elements necessary for the course of action e.g. obtaining ISO certification.

9. Type of Plans Budgets A statement of expected results expressed in “Numerical terms” e.g. financial operating budget = “profit plan”; Budgets enforce precision in thinking: Making a budget is ‘planning’ by itself; Encourages innovation – a “different” way to work Budgets serve for ‘Control’: Enforces discipline in execution of plans; Instills cost consciousness; Makes people (constantly) plan!

10. Being aware of challenges/ opportunity Setting Goals/ Objectives Planning premises Identifying alternatives Market, Customer’s wants, Competition, Own strengths & weakness What to accomplish & when Internal & external Environment/conditions Formulating Supporting plans Budgeting (Quantifying Plans) Comparing & choosing an alternative e.g., Sales budget Operational Expense budget, Capital expenditure budget e.g., plan to buy New machines, recruit & train Employees, develop product etc Decision making Steps in Planning

11. Planning Period Short term plans e.g. raw material buying plan in a factory Long term plans e.g. product development plan, plant/production facility installation;

12. Steps in Planning Being aware of Opportunity Setting Goals/ Objectives Considering Market, Competition, Customer’s wants, Own strengths & weaknesses What to accomplish & when Objective = Important end towards which activities are directed; therefore needs verification at the end of the plan period.

13. Mission Overall Objectives & Key Result Areas Divisional Objectives Departmental Objectives Individual Objectives Hierarchy of Objectives Objectives set end results – they need to be supported by a hierarchy of sub-objectives, duly networked through the organization to avoid discord and wasted effort.

14. Hierarchy of Objectives The Organizational Objectives get trickled down into the objectives of : Divisions Departments  Individual objectives; The ‘cascade’ principle: seamless flow Mutual support & interlocking of goals is essential Managers must ensure that the components of the network fit each other; Departments/divisions can be ‘blind-sided’

15. Planning Premises & Strategies Setting Goals/ Objectives Planning premises Identifying alternatives Comparing & choosing an alternative What to accomplish & when Decision making Internal & external environment Strategic Planning Process Strategy= determination of the purpose / the basic long-term objectives; the adoption of courses of action and allocation of resources required to achieve the aims.

16. Stakeholder Wishes & Shareholder demands Current External situation External Opportunity & Threat Forecast External situation Management Orientation Enterprise Profile Key success factors & Alternative Strategies Purpose & Major objectives of enterprise Current resource situation Internal Strengths & Weakness Strategic choice Planning Premises & Strategies The Strategic Planning Process

17. Planning Premises Porter’s Five Forces : a model for analysis of the external influences

19. Qualitative relies on judgment of experts to translate to quantities;

20. Time-series statistically interpolate demand on historical data;

21. Causal method  seek co-relation on cause and effect basis between two (or more) variables to quantify demand;

22. However, all forecasting methods are limited by:

23. Handling of un-quantifiable factors e.g. national pride

24. Unrealistic assumptions fuelled by a desire to succeed

25. Excessive data required (often unobtainable) to make accurate forecasts

26. Uncertainty with environmental changes: Technology, Govt. Policy, International alignments, New materials/sources, Climate etc.

27. Coping with uncertainties require:

28. Sensitivity analysis & “What if” scenarios (trust instinct!);

30. ORGANISING

31. Organising Organising is the process of defining and grouping activities and establishing authority relationships among them to attain organizational objectives.

32. Importance of Organizing Plan implementation Assignment of authority, responsibility, and accountability Division of work Establish relationships among individuals, groups & departments Allocation and deployment of organizational resources

33. Chain of Command AUTHORITY < RESPONSIBILITY

34. Chain of Command AUTHORITY > RESPONSIBILITY

35. Chain of Command AUTHORITY = RESPONSIBILITY

36. Span of Control Span of 8 (Classical) Span of 4 (Contemporary)

37. Classical Viewpoint SPAN OF 8 Base level = 4096 Managers (levels 1-4) = 585

38. Contemporary Viewpoint SPAN OF 4 Base level = 4096 Managers (levels 1-6) = 1365

39. Centralization & Decentralization

40. Centralization & Decentralization

43. Departmentalization Putting specialists together Direction of a manager Departmentation Process Setting up and establishing departments

44. Organizing Process

45. Identify Activities Production Delivery Selling Maintaining Personnel Training Accounting Advertising Recruitment Purchasing Compensating Budgeting Quality Control

46. Classify Activities in Departments MARKETING OPERATIONS FINANCE HUMAN RESOURCES >Selling >Advertising >Delivery >Production >Purchasing >Quality control >Accounting >Budgeting >Compensating >Recruitment >Training >Maintaining personnel

47. Purpose of the Structure Defines relationships between tasks and authority Defines formal reporting relationships, levels of hierarchy, span of control Defines individual departments Defines systems that affects the organization

48. Formal System Planned structure Lines of responsibility, authority, and position Establish patterned relationships among components Can be described through: Organizational Chart Policy Manual Departments

49. Informal System Based on needs, sentiments, and interests of people Vulnerable to expediency, manipulation and opportunism More subtle and invisible in the organizational chart Can be classified as: Horizontal = same department or same level Vertical = different levels Mixed = combination of both

50. Formal vs Informal Organizations Not formally planned Arise spontaneously as a result of interactions Not depicted in a chart Stressed by human relation theory Have planned structure Deliberate attempts to create patterned relationships Usually shown by a chart Advocated by traditional theory FORMAL INFORMAL