MG4031 Week 05 Lecture 01 PDF

MG4031 Wk.05 Lec.01 Planning: The systematic development of action programmes aimed at reaching agreed business objectives by the process of analysing, evaluating and selecting among the opportunities that are foreseen. It precedes all other management functions. It bridges the gap b...

MG4031 Wk.05 Lec.01 Planning: The systematic development of action programmes aimed at reaching agreed business objectives by the process of analysing, evaluating and selecting among the opportunities that are foreseen. It precedes all other management functions. It bridges the gap between where the business is and where it would like to be. It seeks to reduce the level of uncertainty and risk faced by the organisation. It guides future action. (Strategic, Compliance, Operational and Reputational Risk) It sets up the basis on which the organisational activities are built on, the strategies it will follow. Types of Planning: 1. Strategic: Top level planning with a long-term orientation (more than 5 years). They typically focus on the firm’s mission, conducting internal analysis, assessing the external environment and establishing organisational objectives. It serves as a guide to mergers, acquisitions, investment, divestiture and expansion. 2. Tactical: Concerning the current operations of the various parts of the firm and has a one-to-five-year orientation, usually taking place at the middle management level. It involves interpreting the strategic plans by making smaller plans to achieve them. 3. Operational: Short-term planning of day-to-day activities guiding immediate action to be undertaken by frontline management. Involves establishing short-term business departmental targets, budgets and specific programmes geared towards the tactical plans. 4. Contingency: Creating alternative courses of action should something unexpected happen. These are typically of little practical use but very useful if the contingency occurs. Top management usually spend the most time planning, with frontline managers spending less, but all plans must be related to each other. Types of Plans: Plan: A statement of action to be undertaken by the organisation aimed at helping it achieve its objectives. Dimensions of plans include: Repetitiveness: Single use plans versus standard plans. Time: Short-term versus long-term plans. Scope: Broad versus focused plans. Level: Top/Middle/Lower management plan (these tend to mix). There are typically 8 different types of plans which form a hierarchy. Mission: An enduring statement of purpose that distinguishes an organisation from similar ones. Its reason for existence. It is the most fundamental organisational plan. Typically a short statement. Objectives: Specific aims that the organisation is the achieve within the broader framework of its goals, usually withing a certain timeframe. They’re a more precise outline of the mission statement and can be general/specific. Strategies: A programme of activities formulated in response to directives. It involves analysing the organisation’s strengths and weaknesses and the external environment to see how it can benefit from them. Their purpose is to build on the objectives, they don’t outline exactly how the organisation is to achieve its objectives. Policies: General guidelines for decision making in the firm. They give direction to management by establishing consistency in decision making. They are broad guidelines which managers can interpret in their own ways. An express policy is a written/verbal statement guiding management. Implied policy is inferred by looking at the organisation’s behaviour and actions. They sometimes contradict each other. Procedures: Plans that outline methods for handling certain situations, detailing the precise way activities are to be carried out. They leave little room for discretion and they provide consistency. They are more prevalent at the lower levels of the organisation where tighter control may be required. Well established procedures are called standard operating procedures. Rules: Statements that either prohibit or prescribe certain actions by clearly specifying what employees can and can’t do. There is no discretion with rules. It is important for organisations to distinguish clearly between policies, procedures and rules to avoid confusion among employees. Programmes: Plans designed to accomplish specific goals, usually in a fixed time. They can be broad or narrow. Budget: A numerical expression of a plan which deals with the future allocation and utilisation of resources over a given time. They can be expressed in more than monetary terms, for example, hours, materials, space. They can be an important control mechanism if they reflect the plans. It is the most precise and specific form of planning. References: Notes based on MG4031 Lecture Slides and Modern Management: Theory and Practice for Students in Ireland (5th Ed.) - Tiernan S. and Morley, M.J. Chapter 4.