EAS104 Principles of Management - Unit 3, Part 1 PDF

EAS104 Principles of Management Prof.Dr. Şerife Eyüpoğlu ([email protected]) Unit 3: The Basic Planning Process / Part 1 Topics The Nature and Purpose of Planning What Planning Entails What Planning Accomplishes Planning-The Primary Management Function The Manage...

EAS104 Principles of Management Prof.Dr. Şerife Eyüpoğlu ([email protected]) Unit 3: The Basic Planning Process / Part 1 Topics The Nature and Purpose of Planning What Planning Entails What Planning Accomplishes Planning-The Primary Management Function The Management Planning Process The Hierarchy of Goals Types of Plans THE NATURE AND PURPOSE OF PLANNING The most important decisions that managers make are those decisions that go into forming the organization's plans. Planning can be defined as the process of establishing objectives (what) and the courses of action (how) prior to taking action. What and how. Objectives/goals (what) are the specific results to be achieved by individuals/ groups/ the organization as a whole. Objectives provide direction to all management decisions. Eg.to increase sales by 10% by the end of the year 2021 (what) Courses of action (how) are plans. Plans are the devices/methods used to accomplish the desired objectives. Eg. to increase advertising and promotional activities by 20% (inorder to increase sales) (how) The desired results (objectives) have to be known before a plan can be established to accomplish it. What Planning Entails Therefore as managers carry out the function of planning, they are developing both objectives and plans. We can say that planning really means making tomorrow’s decisions today. Planning entails choosing goals/objectives and the courses of action to achieve them. When making a plan you are actually deciding today what you are going to do in the future. Also, planning involves assessing today the consequences of various future courses of action. What Planning Accomplishes / Benefits gained by planning Allows you to make your decisions ahead of time and anticipate the consequences Provides direction and sense of purpose Provides a unifying framework against which to measure decisions and avoid “piecemeal decision making” Helps identify potential opportunities and threats Facilitates managerial controlling through the setting of standards for monitoring and measuring performance (Planning and controlling are known as the “Siamese twins of management”). Planning-The Primary Management Function Planning is known as the primary management function (the foundation of management) because it establishes the basis for all the other functions that managers perform. Without planning managers wouldn’t know what to organize, lead, or control. If a manager doesn’t plan then they are leaving events to chance. Planning does not guarantee that goals/objectives are achieved but there is a better chance of goal achievement if managers plans that if they don’t plan. THE MANAGEMENT PLANNING PROCESS 1.Set an objective 2.Develop forecast and planning premises 3.Determine alternative courses of action 4.Evaluate alternative courses of action 5.Choose the alternative (plan) and implement 1.Set an objective 1.Set an objective Involves answering the question “where do we want to be at the end of the planning period?” This step is important because managers are appraised by their ability to set and achieve objectives. Setting objectives is an essential management skill. In setting goals/objectives managers need to emphasize SMART goals; Specific Measurable Attainable/Achievable Relevant Timely 2.Develop forecast and planning premises 2.Develop forecast and planning premises This step involves a situation analysis which provides the information about opportunities and threats and trends needed to start formulating intelligent alternatives. Managers build plans on “premises”; assumptions made about the future. Eg. «the economy will expand by 5% per year for the next 5 years». Tecniques used by a mangers to produce premises/assumptions on which to build plans include; Sales Forecasting Tecniques Marketing Research Competitive Intelligence 3.Determine alternative courses of action 3.Determine alternative courses of action There are usually several alternatives/options to achieve goals. Be creative Expand your search Ask how? Know when to stop 4.Evaluate alternative courses of action Think through the consequences of each possible course of action (alternative). Don’t forget, a plan is a decision made today for how to do something in the future. 5.Choose the alternative (plan) and implement 5.Choose the alternative (plan) and implement Choosing the best alternative/ making the decision as to which course of action will be followed inorder to achieve the specified objective(s) and put it into action. End of lecture References 1. Management, Principles and Practices for Tomorrow’s Leaders, 3rd Edition, Gary Dessler, Pearson-Prentice Hall. 2. Management, 2nd Edition, Chuck Williams, South Western-Cengage. 3. Essentials of Contemorary Management, 7th Edition, Gareth Jones and Jennifer George, McGraw Hill.