Planning Function PDF

PLANNING FUNCTION Tiernan, D, Morley, Siobhan and Michael J. , (2019) Modern Management: Theory and Practice for Students in Ireland (5TH Edition), Gill & MacMillan, Dublin 1 DEFINITION Planning can be defined as...

PLANNING FUNCTION Tiernan, D, Morley, Siobhan and Michael J. , (2019) Modern Management: Theory and Practice for Students in Ireland (5TH Edition), Gill & MacMillan, Dublin 1 DEFINITION Planning can be defined as the systematic development of action programmes aimed at reaching agreed business objectives by the process of analysing, evaluating and selecting among the opportunities which are foreseen. Planning is therefore the process of establishing aims and objectives, and choosing a course of action to ensure that they are achieved. This process serves to bridge the gap between where an organisation currently is and where it would like to be. 2 TYPES OF PLANNING 3 TYPES OF PLANNING. Strategic Planning: top of the organisation, long-term orientation – mission, objectives and strategic business plans of the organisation 2. Tactical Planning: deals with current operations, medium-term orientation – involves interpretation of strategic plans 3. Operational planning: short-term planning of day-to- day functions – serves to guide immediate action 4 TIME SPENT PLANNING BY MANAGERS 5 Types of Planning DIMENSIONS OF PLANS 7 THE HIERARCHY OF PLANS Purpose or Mission Objectives Strategies Policies Procedures Programmes Budgets 8 TYPES OF 1. Purpose\Mission: PLANS enduring statement of purpose that distinguishes one organisation from another – it is the most fundamental plan of all Nike Mission Statement: ‘To bring inspiration and innovation to every athlete in the world.’ 9 The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests. 10  RADISSON BLU Yes I Can! is a company-wide service philosophy and a positive service attitude that each one of us chooses to adopt, when we deal with every guest, every day. At Radisson Blu , Yes I Can! is our company's mission and a way of life which guides us to meet any challenge and identify every opportunity. Whether our guests are in Glasgow or Capetown, Beijing or Rome, they are assured consistently excellent service. 11  Mission Statement “To be the premier provider of event production and management services in Ireland through quality, innovation, creativity, professionalism and expertise delivered by a dedicated and inspired team” TYPES OF PLANS 2.Objectives: provide specific aims within the broader framework of goals and usually involve a specific time frame Objectives outline more precisely how the organisation seeks to achieve its mission 3. Strategies: programme of activities formulated in response to objectives – main purpose of a strategy is to build on objectives, e.g. cost-cutting strategy 13 TYPES OF PLANS 4. Policies are general guidelines for decision- making throughout the organisation. They provide a direction for managers when using their judgement in achieving objectives. For example, a policy might state that ‘preference should be given to Irish raw materials suppliers when ordering stock’. Express vs. implied 14 TYPES OF PLANS 5. Procedures are plans that outline methods for handling certain situations. They detail the precise manner in which activities are to be carried out. Procedures frequently involve a series of related steps that have to be taken, and differ from policies that address single issues. For example, an organisation may have a stated policy in relation to grievance and discipline. 15 TYPES OF PLANS 6. Rules are statements that either prohibit or prescribe certain actions by clearly specifying what employees can and cannot do. Rules apply to situations regardless of the particular individuals involved, for example, a ‘no smoking’ rule. 16 TYPES OF PLANS 7. Programmes are plans designed to accomplish specific goals, usually within a fixed period of time. They can be broad, such as an energy conservation programme undertaken by an organisation, or they can be narrow, focusing on particular areas within the organisation, such as a management development programme for executives. 17 TYPES OF PLANS 8. A budget is a numerical expression of a plan that deals with the future allocation and utilisation of resources over a given period of time. Budgets are normally expressed in financial terms, person hours, productivity or any other measurable unit. Examples of budgets include revenue and expense budgets, and time, space, material and product budgets. 18  THE MBO CYCLE Goals and plans of the larger organisation Supervisor and subordinate meet to discuss organizations’ goals and plans. Performance is Subordinate writes reviewed & preliminary objectives appraised. Subordinate Supervisor & does job Supervisor & subordinate subordinates decide how to measure Orla O'Doherty agree on objectives.19 19 achievement against objectives. ADVANTAGES OF MBO 1. The employee has a clearer understanding of the goals he/she is expected to work towards. 2. Planning should improve as there is greater commitment to goals. 3. Control should be easier as performance standards now exist. 4. Motivation should improve as subordinates feel they have input in the objective setting process. 5. Employee appraisal is simplified by reference to each individual’s objectives. Orla O'Doherty 20 20 DISADVANTAGES OF MBO 1. If MBO is not explained properly employees may feel they are being coerced. 2. MBO is time-consuming. 3. It requires full commitment and active support of top management. 4. Under-achievement might be the result of the external environment which are outside the control of the subordinate and manager. Orla O'Doherty 21 21 THE PLANNING PROCESS 22 THE PLANNING PROCESS 1.Defining Corporate Objectives – these must be clarified and documented 2.External and Internal Analysis – this involves analysing internal strengths and weaknesses in relation to the external opportunities and threats 23 THE PLANNING PROCESS This is commonly termed a SWOT analysis and involves three steps: 1.Identification of current strategy 2.Identification of key changes in the external environment – PEST opportunities and threats 3.A resource profile ( human, financial, organisational and technological) – strengths and weaknesses 24  SWOT ANALYSIS Internal Strengths Weaknesses External Opportuniti Threats es 25 THE PLANNING PROCESS 3.Revision of Objectives – the unique competitive advantage should become clear: unique product, market leadership, quality reputation, etc. 4.Formulating Strategies – deciding the direction of activities: expansion, merger, contraction or diversification 26 THE PLANNING PROCESS 5.Formulating tactical plans – these interpret the strategic plan by producing medium-term plans to achieve objectives 6.Formulating actions plans –implementation through specific action plans, e.g. to increase sales of wine by 10% 27 BUSINESS-LEVEL STRATEGIES Strategies formed on two levels: 1. Corporate level – relating to the conduct of business across several industries 2. Business level – relating to the conduct of business in one industry sector 28 BUSINESS-LEVEL STRATEGIES These refer to the operation of a single business. Two main approaches have been taken to analyse different strategies: 1. The Miles and Snow Typology 2. Porter’s Generic Strategies 29 MILES AND SNOW TYPOLOGY 1.Prospector – high-growth industry; organisation looks for new opportunities 2.Defender – maintain growth levels by protecting current markets and customers 3.Analyser – combination of one and two, keeps current market with a moderate degree of innovation 4.Reactor – no clear approach; reacts to events 30 PORTER'S GENERIC STRATEGIES 1. Differentiation – try to make their product\service unique and distinctive by enhancing quality 2. Cost Leadership – offering lowest priced products or services 3. Focus – concentrate on specific regional markets, product lines or customers 31 CORPORATE-LEVEL PLANNING STRATEGIES Key strategic issue concerns the degree of diversification Diversification – number of different business activities and the extent of their relationship Related diversification Unrelated diversification 32 MANAGING DIVERSIFICATION Boston Consulting Group (BCG) matrix – framework for making decisions about the performance of key businesses Considers two factors: rate of growth and market share Most attractive option is with high growth and high market share Least attractive option is with low growth and low market share 33 MANAGING DIVERSIFICATION Stars – high share of the market, high market growth Cash cows – large market share but not likely to increase Question marks – future can be unpredictable Dogs – should divest interest and invest elsewhere 34 35 36 BENEFITS TO PLANNING Planning improves focus and flexibility. Stay ahead of competitors. Improves coordination – prioritise. Improves time management. Improves control. Be Careful!! Procrastination 38