MG4031 Management Principles Planning PDF

MG4031 Management Principles Planning Reading: Chapter 4, Modern Management, pages 124- 150  Learning Objectives To appreciate why planning is an important function for all organisations, providing the framework for all subsequent...

MG4031 Management Principles Planning Reading: Chapter 4, Modern Management, pages 124- 150  Learning Objectives To appreciate why planning is an important function for all organisations, providing the framework for all subsequent management functions. To understand that there are different types of planning (Strategic; Tactical; Operational) To outline how organisations comprise a hierarchy of plans To identify the key dimensions of plans To set out the key elements of the planning process To identify techniques for improving the planning process: At Manager Level: MBO At Business Level: SWOT: MST: BCGM  Planning Defined as “the process of systematically developing action programmes through analysing, evaluating and selecting among different opportunities aimed at reaching agreed business objectives”. Considered to be the most fundamental of all management functions, it serves to bridge the gap between where an organisation currently is and where it would like to be Seeks to reduce the amount of risk and uncertainty faced by an organisation Various types of Business risk, many of which are growing (Strategic Risk; Compliance Risk; Operational Risk & Reputational Risk). Relationship between Planning and Managerial Level  Types of Planning 1. Strategic planning 2. Tactical planning 3. Operational planning Strategic planning- takes place at the top level Deals with on-going operations Long term in orientation (>5 Years) Concerned with short term Medium term orientation planning of day to day functions Includes the mission, objectives and strategic business plans of the Involves interpretation of Serves to guide immediate action organisation strategic plans Dimensions of Different Plans Time Scope Plans Level Repetitiveness  Dimensions of Plans Repetitiveness: Single versus standard plans where single are tailored to a specific situation and usually strategic, while standard are more routine and operational Time: short term operational versus long term strategic Scope: Broad versus narrow Level: Refers to the level of the organisation at which the plan is directed (Top, Middle or Lower) The Hierarchy of Plans Enduring statement of purpose What must be undertaken to achieve mission Programme of activities formulated in response to objectives Guidelines for decision-making throughout the organisation Support policy implementation in step-by-step approach Prescribe conduct/behaviour with no discretion Detail related actions within a certain time frame Numerical expression of resource allocation and utilisation A Schematic of The Planning Process Step 1. Define corporate objectives Step 2. Conduct external and internal analysis Feedback Step 3. Revise objectives Step 4. Develop strategic plan Step 5. Develop tactical plan Step 6. Develop operational plans  Techniques for Improving the Planning Process Subordinate-Manager Level through a focus on Management by Objectives At Business Level through a focus on the Internal and External Environment SWOT Analysis Miles and Snow Typology Boston Consulting Group Matrix  MBO Process 2. The subordinate 4. At agreed 1. Manager sets proposes his/her intervals there are 3. Jointly goals are performance own goals performance depending on how then quantified and reviews of standards which must be met by the s/he feels he/she assigned a specific subordinates and time frame subordinate can reach or feedback is exceed standards provided  Advantages of MBO The employee gains a clearer understanding of the goals s/he is working towards Planning should improve as there is agreed commitment to goals Controls should be easier as performance standards & feedback loop now exist Motivation should improve Employee appraisal is simplified by reference to each individual’s objectives  Disadvantages of MBO If MBO is not sold properly throughout the organisation, employees may feel that they are being coerced There is a capacity for goal incompatibility between different units There may be a focus on easily measurable objectives and these are not always the best ones Agreement on objectives can cause inflexibility when the environment changes It requires a competent Manager!  SWOT Framework as aid to Planning The internal e.g. performance, quality, people, skills, environment - the adaptability, services, processes, About Strengths situation inside the infrastructure, etc. the and Weaknesses organisation here and Now The external e.g. factors relating to markets, sectors, Opportunities environment - the audience, seasonality, trends, Often and situation outside competition, economics, politics, society, about Threats the organisation culture etc. Future Miles and Snow Typology as aid to Planning Prospector Defender Analyser Reactor  Miles and Snow Typology as aid to Planning Prospector - typically involved in a high growth innovative industry and continually looks for new opportunities and markets Defender - maintain growth levels by protecting current territory and keeping current customers well served Analyser - combination of 1 & 2, keeps current market with a moderate degree of innovation Reactor - organisation has no clear approach. Reacting to changes made by competitors  BCG Matrix as Aid to Planning As a management planning technique, the focus is on the Product Portfolio Considers (1) the rate of growth within the market and (2) the market share held by the organisation  Summary Planning is a critical Managerial Activity and strong determinant of success or failure Failure to plan, coupled with inadequate funding, bad marketing and unreliable suppliers Occurs at multiple levels (Strategic, Tactical, Operational) A variety of plans, arranged in a hierarchy to guide and facilitate implementation Instilling ownership through MBO Technique at Manager/Subordinate Relationship Level helpful At Business Level a Focus on the Strategy and the Product Lifecycle brings systematics to the planning effort Thank you