Unit 2: Components of Planning

10 Questions

What is the primary purpose of setting subordinates' objectives in the MBO process?

To achieve individual performance

What is the next step after setting objectives for subordinates in the MBO process?

Matching resources with objectives

What is the primary role of directing techniques in implementing MBO?

To provide support and guidance to achieve objectives

What is the primary purpose of the appraisal of performance or review of results in the MBO process?

To determine if objectives are being achieved and take follow-up actions

What is the last step in the MBO process?

Full-fledged application

What is the flow of the objective-setting process in the MBO?

From top to bottom in the hierarchy

What type of resources are matched with objectives in the MBO process?

Money, material, place, tools, and human resources

What is the primary focus of individual managers during the implementation of MBO?

Key Result Areas (KRAs)

What is the primary role of monitoring authority during the implementation of MBO?

To keep a close watch at the initial stage

What is the outcome of a successful review of results in the MBO process?

Extension of MBO to other departments

Study Notes

Components of Planning

Components of planning are also called elements, types, or parts of a plan.
Each component is an individual plan that jointly constitutes a broader plan.
They can also be called sub-plans.

Types of Plans

Multi-Use Plans: Standing plans formulated for activities that recur regularly or repeatedly over a period of time.
Single-Use Plans: Used only once, also known as single-use plans.

Multi-Use Plans

Objectives: The expected result to be achieved within a definite time period.
Policies: General statements or understanding that guide or channel thinking in decision making.
Rules: Concerned with the "how" aspect of planning.
Strategies: Long-term plans that determine the survival and growth of a business.

Single-Use Plans

Budget: A plan or statement showing expected or estimated results for a definite future period expressed in numeric terms.
Schedule: A part of a procedure, specifying when and how long a task should be performed.
Project: A small and temporary program aimed at a specific objective.
Programme: A broad scheme of deploying all resources for a specific purpose.

Management by Objectives (MBO)

Concept: Developed by Peter F. Drucker in 1954, MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner.
Key Aspects: Objectives, participation, and integration.
Characteristics: Specific approach, participation of all, focuses on measurable and verifiable goals, dynamic, periodical review, and self-direction and self-control.
Steps in the MBO Process:
- Setting organizational objectives.
- Deciding on Key Result Areas (KRAs).
- Setting subordinates' objectives.
- Matching resources with objectives.
- Implementing MBO.
- Appraisal of performance or review of results.
- Full-fledged application.