Maryland International College

PLANNING
After the completion of the chapter,
you will be able to understand:

 Nature & purpose of planning

 The planning Process

 Skills Required In Planning

 Types of Plans
 Planning is deciding in advance
what to do, how to do it, when to
do it, and who is to do it.

 Planning is determining in advance

what is to be accomplished and
how it is to be accomplished.
 The Primacy of planning

 It is the primary mgt function

 Pervasiveness of planning

 At all levels in all organizations

 Contribution to purpose & objective

 to facilitate the accomplishment and the achievement of the purposes and the
objectives of the organization.

 Planning is directed towards efficiency

 Plans are efficient if they achieve their purpose at reasonable costs

 It concerns future activity

 It is all about the future

 It has dynamic aspects (it is flexible & continuous)

 flexible as it is based on future conditions, which are always dynamic.

 To offset uncertainty

 To focus attention on
objectives

 To gain economical operation

 To facilitate control
 Identifying and defining the real problem
 Establish clear-cut objectives
 Establishing the planning Premises:-
assumptions…
 Identify alternative Courses of Action:-
seeing other options
 Evaluating Alternative Courses based on
cost, time, resources…
 Selecting a course of action/best
Alternative among many
 Formulating Derivative Plans
 Numberzing Plans by Budgeting: eg. Set
Target Plan.
 Skills required in planning are :

1.Forecasting

&

2.Decision Making
 (i) Forecasting: is the attempt to
predict outcomes and future trends that
can serve as basis for planning, by
inferences from known facts.
 In developing premises, the kind of
markets, volume of sales, prices,
products, technical developments, costs,
tax rates, policies, policies related to
dividends, the social and political
environment, long-term trends, etc of the
future should be predicated with the help
of forecasting.
 (ii) Decision Making: is
defined as the process of
selecting or choosing, based on
some criteria, the best course of
action from a number
alternatives.

The steps in decision-making process
include the following:
1. Ascertain the need for a decision
2. Establish decision criteria
3. Allocate weights to criteria
4. Develop Alternatives
5. Evaluate Alternatives
6. Select the Best Alternative
7. Putting Decision Into Action
8. Following up Decisions
Types of decisions:
1. Programmed decisions:
 are the kinds of decision that manager’s
face again and again
 Once a standard procedure has been
established, it can be used to treat all like
situations
 2. Nonprogrammer Decisions: are used to
solve nonrecurring problem.
 No well-established procedure exists for
handling them, primarily because
managers don not have experience to
draw upon.
 1. Decisions under certainty
Ready made information
2.Decisions under risk: - those
decisions in which probabilities can
be assigned to the expected
outcomes of each alternative
 3. Decisions under uncertainty:
-
neither there is complete data nor
probabilities can be assigned to
the surrounding conditions.
 Planning can be classified in
different ways in different basis:
 1. Duration /Time dimension
 i) Short range plans: - a plan for
a year or less than one year
 ii) Intermediate range plans: -
plan between a year and five years
 iii) Long range plans: - Plan for
five or more years
 A planning can be classified in to based on
the scope or breadth of activates they
represent.
1. Strategic Plans:
 These plans are comprehensive in scope &
reflect long-term needs and direction of the
organization.

 Strategic plans include: -

 Mission/purpose
 Objectives
 Strategies
 1.Mission: - Explains the reason for
existence
 2. Objectives/Goals: - The ends toward
which activity is directed
 3. Strategies:-General programs of
action and deployment of resources to
attain comprehensive objectives.
 Generally, it is concerned with the
direction in which human and material
resources which human and material
resource will be applied in order to
increase the chance of achieving selected
objectives.
 2.Operational /Tactical plans:
-
 These are plans used to
implement strategic plans
 These plans are more limited in
scope & address those activities
& resource required to
implement strategic plans.
 Based on their use dimension
these plans can be classified in to

 1.Single Use Plans:- are plans that are

used once, and then discarded.
2. Standing plans – are used to guide
activities that occur over a period of time.
These are plans that are designed to be used
again and again.
 Policies

 Procedures / Standard operating

procedures

 Rules & Regulations

 Policies: -
These are standing plans in that they are
general statements or understandings
which guide or channel thinking in
decision-making.
 Procedures: - are standing plans that
establish a required method of handling
future activities.
 Rules and Regulations: - are plans that
describe exactly how one particular
situation is to be handled.
 Are statements of actions that must be
taken or not taken
  Single Use Plans
 are plans that are used once, and then
discarded
 TYPES OF SINGLE USE

PLANS :-
1- Program (project)
Program: - Programmes are a complex of
goals, polices, procedures, rules, task
assignments, steps to be taken, resources
to be employed and other elements
necessary to carryout a given course of
action
 A program is a comprehensive plan
that includes future use of different
resource in an integrated pattern and
establishes a sequence of require
actions, time schedules for each in
order to achieve stated objectives.
 2.Budgets: - are statements of
expected results or resources set
aside for specific activities expressed
in numerical or quantitative terms.
END
CHAPTER CONTENTS:-
 Overview of organizing
 Nature/ characteristic /basic
concepts of organizing
 The process of Organizing
 Organizational Relationships
 Organizational Structure &Charts
1. OVERVIEW OF ORGANIZING
• In planning, objectives that are going to
be achieved are identified / established
and courses of action have been
determined.
 Then, the manager continues his
activities by :
o Giving practical shape to the activities/
works to be performed.
o Identifying the roles where by workers
are supposed to play, and
o Making known to the group what their
duties and responsibilities are
ORGANIZING DEFINED :-
 Therefore, to design and maintain
such systems of roles is the
managerial function of organizing.
 It is one of the functions of
management, the one concerned
with choosing what tasks are to be
done, who is to do them, how the
tasks are to be grouped, who is to
report to whom and where
decisions are to be made
DEFINITION:-
o Organizing is the part of managing that
involves establishing an intentional structure
of roles for people to fill in an organization.
o In summary, it is:--
 (i) The identification and classification of
required activities necessary to attain
objectives.
 (ii) The grouping of activities necessary to
attain objectives.
 (vi) The provision for co-ordination
horizontally and vertically in the
organizational structure.
 Nature/ characteristic of
organizing.
1.Division of labor /specialization/
 involves breaking down of a task in
to its most basic elements, training
workers in performing specific
duties, and sequencing activities so
that one person’s effort build on
another’s.
Advantages:
 It enables one person performing
a task to become highly proficient
which results in increasing
efficiency in productivity.
 It saves time.
 There is less waste of materials in
the learning process when
division of labor is used.
 Disadvantage:
 This helps managers and subordinates
to approach and decide in common
about the objectives to be achieved
and the actions to be taken
 Failure to establish such relationships
may result in different persons (or
departments) pursuing different
paths, thus making difficult for the
enterprise to achieve its goals.
 2. Accomplishment of Objectives:
-
 The organization structure, the result
of organizing, is bound together by
the pursuit of specific and well-
defined objectives
 3. Authority & Responsibility
Relationships:
the result of organizing, should
consist of various positions arranged
in a hierarchy with a clear definition
of authority and responsibility
 4. Formal Organization: The
organization results in an
intentional formal organization
structure of roles in a legally and
formally organized enterprise.
 5. Communication: It is the
transfer of information among
people to achieve organizational
goals
Organizing functions follow the following steps:

(1) Determine tasks/activities necessary to attain objectives

(2) Group jobs in to practical units/ departments based on similarities,

importance, who will do the work

(3) Create authority /reporting relationships

(4) Delegate authority

•Departmentation

•Delegation

•Decentralization
Dividing and grouping the activities and employees of an enterprise into
various department.

All organizations divide their overall operations in to sub activities and

combine these sub activities in to working groups

This grouping process of specialized activities in logical manner is called

Departmentation.

The work units so formed may be called departments, divisions, units, or

any other name.
-Divisionalization of work

-Obtain organizational units of

manageable size and

-Utilize managerial ability based on

specialization to secure maximum
results.

-The basic need of Departmentation arise

from the limitation on the number of
subordinates that can be directly
managed by a superior.
 Functional Departmentation

 Product Departmentation

 Geographic /Territorial Departmentation

 Customer Departmentation
 It groups activities based on similar functions of the
organization.
Advantages:-
 1. It is logical, scientific and time rested method
 2. It makes supervision easier, since each manager
must be expert in only a narrow range of skills.
 3.Tight control of all functional units is assured.
 4. It simplifies training

Disadvantage:
 1. People in a functional department may lose sight
of the overall operations of the business;
 2. Workers may develop highly specialized skills,
but no general managerial abilities.
 3. Responsibility for profit is at the top.
 It is the grouping of activities on the
basis of product or product line.
Advantage:
 1. It enables the enterprise to focus
attention & effort on product lines
 2. It improves co-ordination b/n
functions relating to a particular
product.
 3. Furnishes measurable training ground
for general managers
Disadvantages:
 1. Requires more persons with general
manager abilities.

 2. There is an ever-present danger of

duplication of activities (resources and
costs)
 groups business activities on the basis
of geographic region or territory,
 Advantages:
 1. Results in great saving in time and
money
 2. Places responsibility at lower level
(There will be quick decision.)
 3. Places measurable training ground for
general managers.
 4. Better face-to-face communication
with local interests.
 1. Requires more persons with general
manager abilities/it is costly to
implement. /
 2. Duplication of effort or
resources/costs,
 It is the grouping of enterprise activities
based on customers’ interests.
Advantages:
 1. Encourages concentration on
customer needs
 2. Giving customers feeling that they
have an understanding supplier
 3. Develops expertness in customer
area
Disadvantage:
 1. May be difficult to coordinate
operations between competing
customer demands.
 2. Requires managers and staff expert
in customer’s problems
 It is the assignment of authority and
responsibilities to lower level managers.
Importance:-
-It frees a manager from some time
consuming duties that can be
adequately handled by subordinates
and lets the manager devote more time
to problems requiring his/her full
attention.
 It explains problems created to exercise
delegation.
 There are two types of delegations:-

1.Management Obstacle
 - Some managers feel the need to be in
total control of every aspect of the
organization
 - Others lack confidence in their
subordinates
 - Fear the consequence of having
subordinates make decisions
Subordinate Obstacles:
 In some cases/instances, subordinates
are reluctant to assume an equal
amount of responsibility because of
either of the following reasons.
 - Subordinates usually feel that making
decisions is the boss’s job.
 - Subordinates fear criticisms for
making bad decisions
 - Subordinate managers do not have
enough factual information on which to
base a decision.
 It is the tendency to disperse decision-
making authority in an organized
structure
 1.Formal relationship:- it is a
relationship where people are organized
because of specific goal.
 2. Informal relationship:- is created
when people are grouped in the
organization without any clear purpose
or documentation. Usually, based on
status, religious, sex…