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Decision Making and Planning process Contents: Decision Making and the Planning Process Organizational Goal Organizational Planning Tactical Planning Operational Planning Managing Goal-Setting and Planning Processes
Decision Making and Planning process Decision making is the cornerstone of planning. Decision making is the catalyst that drives the planning process. Deciding on the best plan for achieving particular goals also reflects a decision to adopt one course of action as opposed to others. Understanding the environment is essentially the first step in planning. Managers must establish the organization’s mission. Directly following the mission are strategic
The Environmental Context The Organization’s Mission ∙Purpose ∙Premises ∙Values ∙Directions Strategic Strategic goals plans Tactical Tactical goals plans Operational Operational goals plansDecision Making and the Planning Process
Organizational Goal “Goals are critical to organizational effectiveness, and they serve a number of purposes” Purpose of Goals Goals can help everyone understand where the organization is going and why getting there is important. Effective goal setting promotes good planning,and good planning facilities future goal setting. Goals can serve as a source of motivation for employees of the organization.
Kinds of Goals 1. Strategic Goal:A goal set by and for top management of the organization. 2. Tactical Goal:A goal set by and for middle managers of the organization. 3. Operational Goal:A goal set by and for lower level managers of the organization.
An organizational plan is basically a “to do” list for and organization. It lists out the plan of work, programs & tasks. Each specific plan is designed for achieving each specific goal. Plans are also distributed according to the time frame in which they are implemented or act upon. Different plans are also prepared by management in order to tackle any unexpected event.
Kinds of Organizational Planning 1. Strategic Plan:A general plan outlining decisions of resourceallocation,priorities,and action steps necessary to reachstrategic goals. 2. Tactical Plan:A plan aimed at achieving tactical goals and developed toimplement parts of a strategic plan. 3. Operational Plan:Focuses on carring out tactical plans to achieve operationalgoals.
Time Frames for Planning 1. Long range plan:A plan that covers many years even decades; common long range plans are for five years or more. 2. Immediate plan:A plan that generally covers from one to five years.
Time Frames for Planning (cont’d)3. Short range plan:A plan that generally covers a span of one year or less.4. Action plan:A plan used to operationalize any other kind of plan.5. Reaction plan:A plan developed to react to an unforeseen circumstances.
Contigency Planning and Crisis Management Contigency Planning: The determination of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate. Crisis Management: The set of procedures the organization uses in the event of a disaster or other unexpected calamity. Ongoing planning processAction point 1 Action point 2 Action point 3 Action point 4Develop plan, Implement plan Specify indicators SuccessfullyConsidering And formally For the contigency CompleteContigency events Identify contigency Events and develop Plan or Events Contigency plans Contigency For each possible plan Event
Tactical Planning Developing Tactical Plans The manager needs to recognize that tactical planning must address a number of tactical goals derived from a broader strategic goal. Tactics must specify resources & time frames. It requires the use of human resources. Executing Tactical Plans• Successful implementation depends upon astute use of resources, effective decision making.• Steps to ensure that right things are done at right time in right way.• Ongoing monitoring must be carried out to evaluate achievement of desired results from plan.
Developing & Executing Tactical Plans Tactical plans are used to accomplish specific parts of strategic plan. Several tactical plans are used to implement each strategic plan. Effective tactical planning involves both development & execution.Developing Tactical Plans Executing Tactical Plans Recognize and understand Evaluate each course of action overarching strategic plans in light of its goal and tactical goals Obtain and distribute Specifying relevant resource information and resources and time issues Monitor horizontal and vertical Recognize and identify human communication and integration resource commitments of activities. Monitor ongoing activities for goal achievements
Operational PlansTypes of Operational Plans Plan Description Single use plan Developed to carry out a course of action not likely to be repeated in future. Program Single use plan for a large set of activities. Project Single use plan of less scope and complexity than a program. Standing plan Developed for activities that recur regularly over a period of time Policy Standing plan specifying the organization’s general response to a designated problem or situation Standard operating Standing plan outlining steps to be followed in procedure particular circumstances Rules and regulations Standing plans describing exactly how specific activities are to be carried out.Organizations develop various operational plans to help achieve operational goals.In general there are two types of single use plan & three types of standing plan.
Managing Goal-Setting and Planning Processes Barriers to Goal Setting and PlanningMajor Barriers Inappropriate goals Improper Reward System Dynamic and Complex Environment Reluctance to Establish Goals ConstraintsOvercoming the Barriers Understanding the purposes of goals and planning Communication and Participation Consistency,Revision and Updating Effective Reward System
Barriers to Goal Setting and Planning1. Inappropriate Goals: Goals may also be inappropriate if they are unattainable. Goals may also be inappropriate if they place too much emphasis on either quantitative or qualitative measures of success.2. Improper Reward System: An improper reward setting acts as a barrier to goal setting and planning. 3. Dynamic and Complex Environment: The nature of an organization’s environment is also a barrier to effective goal setting and planning. Rapid change,technological innovation and intense competition can all increase the difficulty of an organization’s accurately assessing future opportunities and threats.
Barriers to Goal Setting and Planning (cont’d) 4.Reluctance to Establish Goals: Managers reluctance to establish goals for themselves and their units of responsibility. 5.Resistance to Change: Another barrier to goal setting and planning is resistance to change. Planning essentially involves changing something about the organization.6.Constraints: Constraints that limit what an organization can do are another major obstacle. Common constraints include a lack of resources, government restrictions and strong competition.
Overcoming the Barriers1.Understand the Purpose of Goals and Planning: Managers should also recognize that there are limits to the effectiveness of setting goals and making plans.2.Communication and Participation: Everyone involved in the planning process should know what the over-riding organizational strategy is,what the various functional strategies are, and how they are all to be integrated and coordinated. People responsible for achieving goals and implementing plans must have a voice in developing them from the outset.
Overcoming the Barriers3.Consistency,Revision and Updating: Goals should be consistent both horizontally and vertically. Horizontal consistency means that goals should be consistent across the organization from one department to the next. Vertical consistency means that goals should be consistent up and down the organization- strategic, tactical and operational goals must agree with one another.4.Effective Reward Systems: In general, people should be rewarded both for establishing effective goals and plans and for successfully achieving them.
Management by Objectives(MBO) “ A formal goal- setting process involving collaboration between managers and subordinates; the extent to which goals are accomplished is a major factor in evaluating and rewarding subordinates performance.”The Nature and Purpose of Formal Goal Setting: The purpose of formal goal setting is generally to give subordinates a voice in the goal-setting and planning processes and to clarify for them exactly what they are expected to accomplish in a given time span.The Formal Goal setting Process: If a formal goal-setting program is to be successful, it must start at the top of the organization. The collaboration involves a series of distinct steps.
The Formal Goal Setting Process CommunicStarting Establishment Collaborative ating Periodic Evalua-The formal of organiza goal setting organi - review tionGoal tional goals and zationalsetting and plans planning goals andProgram plans Meeting Verifiable goals andFormal goal setting is an effective technique Clear plansfor integrating goal setting & planning. Thisfigure portrays the general steps that most Counsellingorganizations use when they adopt formalgoal setting. Of course most organizationsadapt this general process to fit their own Resourcesunique needs & circumstances.
The Effectiveness of Formal Goal Setting A primary benefit of goal setting is improved employee motivation. Goal setting focuses attention on appropriate goals and plans, helps identify superior managerial talent for future promotion, and provides a systematic management philosophy that can have a positive effect on the overall organization. The major problem that can derail a goal-setting program is lack of top management support. Another problem with goal setting is that firms overemphasize quantitative goals and plans and burden their system with too much paperwork and record keeping.