Management Function:

PLANNING
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Food for the BRAIN

I learned that the only way you are going to get anywhere in life is to work hard at it. Whether you're a musician, a writer, an athlete or a businessman (a manager), there is no getting around it. If you do, you'll winif you don't, you won't.

Bruce Jenner, Olympic Gold Medalist

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Introduction
A manager creates and maintains an environment also called as an internal environment or simply the organization, so that others can work efficiently in it.

A manager's job consists of planning, organizing, directing, and controlling the resources of the organization. These resources include people, jobs or positions, technology, facilities and equipment, materials and supplies, information, and money. Managers work in a dynamic environment and must anticipate and adapt to challenges.
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Definition

Planning is a logical and systematic approach of formulating the objectives, programs, procedures, rules and regulations, and other types of plans.

Planning is considered the most basic of all managerial functions. Without this basic function, the other four functions of a manager cannot be tackled efficiently and effectively. Therefore, a manager organizes, staffs, directs, and controls in order to guarantee the attainment of objectives and other types of plans.
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Definition

Planning is a process that involves defining the organizations goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate organizational work.

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The Role of Goals and Plan in Planning

Goals are desired outcomes for individuals, group, or entire organizations.

Plans are documents that outline how goals are going to be met including resource allocations, schedules, and other necessary actions to accomplish the goals

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Types of Goals

Stated Goals official statements of what an organization says, and what it wants its various stakeholders to believe, its goals are. Real Goals goals that an organization actually pursues, as defined by the actions of its members.

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Approaches to Establishing Goals

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Traditional Goal Setting an approach to setting goals are set at the top level of the organization and then broken down into subgoals for each level of the organization. Means-Ends Chain an integrated network of goals in which the accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next level. Management by Objectives a management system in which specific performance and goals are jointly determined by the employees and managers, progress toward accomplishing those goals in periodically reviewed, and rewards are allocated on the basis of this progress.

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Characteristics of Welldesigned Goals

 Written in terms of outcomes rather than actions  Measurable and quantifiable  Clear as to a time frame  Challenging yet attainable  Written down  Communicated to all necessary organizational members

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How might the planning in a non-profit institution such as the Colegio de San Juan de Letran differ from planning in a for-profit company such as Sa

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Steps in Goal Setting

1. Review the organizations mission 2. Evaluate available resources 3. Determine the goals individually or with input from others 4. Written down the goals and communicate them to all who need to know. 5. Review results to see whether goals are being met.

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Types of Plans

5
Frequency of Use
Single-use Standing

Breadth

Time Frame

Specificity

Strategic Operational

Long-term Short-term

Directional Specific

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Types of Plans
Strategic Plans plans that apply to the entire organization, establish the organizations goals, and seek to position the organization in term of its environment. Versus

Operational Plans plans that specify the details of how the overall goals are to be achieved.
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Types of Plans
Long-term Plans are plans with time frame beyond three years. Versus Short-term Plans are plans covering one year or less.

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Types of Plans

5
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Specific Plans are plans that are clearly defined and that leave no room for interpretation. Versus Directional Plans are plans that are flexible and that set out general guidelines.

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Types of Plans
Single-use Plans pertains to a one-time plan specifically designed to meet the needs of a unique situation. Versus

Standing Plans are ongoing plans that provide guidance for activities performed repeatedly.

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Purpose of Planning

1. Planning establishes coordinated effort. 2. Planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact of change, and develop appropriate responses. 3. Planning reduces overlapping and wasteful activities. 4. Planning establishes goals and standards that are used in controlling.
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The Nature of Planning

Cont. to purpose and objectives The first basic function Function of all managers Efficient organization
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The Pervasiveness of Decision Making

Decision making is synonymous with managing

Planning - defining goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate activities
What are the organizations long-term objectives? What strategies will best achieve those objectives?

What should the organizations short term objectives be? How difficult should individual goals be?
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The Pervasiveness of Decision Making

Organizing - what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are made
How many employees should I have report directly to me? How much centralization should there be in the organization? How should jobs be designed? When should the organization implement a different structure?
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The Pervasiveness of Decision Making Leading - directing and motivating all involved parties and dealing with employee behavior issues
How do I handle employees who appear to be low in motivation? What is the most effective leadership style in a given situation?

How will a specific change affect worker productivity? When is the right time to stimulate conflict?
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The Pervasiveness of Decision Making

Controlling - monitoring activities to ensure that they are going as planned

What activities in the organization needed to be controlled? How should those activities be controlled? When is a performance deviation significant? What type of management information system should the organization have?

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The Decision Making Process

1. 2. 3. 4. 5. 6. 7. 8. Identifying a problem Identifying decision criteria Allocating weights to the criteria Developing alternatives Analyzing alternatives Selecting an alternative Implementing the alternative Evaluating decision effectiveness

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The Decision Making Process

1 2 3 4 5 6 7 8 My sales representatives need new computers! Price; weight; warranties; screen type; reliability; screen size Reliability 10, screen size 8, Acer, Compaq, Gateway, HP, Micromedia, NEC, Sony Toshiba Acer, Compaq, Gateway, HP, Micromedia, NEC, Sony Toshiba Acer, Compaq, Gateway, HP, Micromedia, NEC, Sony Toshiba Gateway

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The MBO Process

1. 2. 3. 4. 5. 6. 7. 8.

Formulize long-range organizational objectives Develop specific divisional objectives Establish departmental objectives Set individual job objectives Formulate action plans Implement and take corrective action Review progress toward objectives Appraise overall performance, reinforce behavior, and strengthen motivation through: Manager training and self development, compensation, and career and manpower

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The Basic Steps in Business Planning

1. 2. 3. 4. 5. 6.

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Define the business idea Establish goals and objectives Evaluate the ideas, goals, and objectives Forecast cash needs Identify source of funds Write a business plan

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Relationship Between The Planning Process and the Business Plan

PLANNING PROCESS BUSINESS PLAN Definition of management Description of the business Marketing plan Organizational and management plan Production plan Financial Plan Marketing aspect Management/ organization aspect Production/ technical aspect Financial aspect

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Managerial Decision Making

Decision-Making Approach -Rationality - Bounded Rationality - Intuition

5
Decision
-Choosing best alternative - Implementing - Evaluating

Types of Problems and Decisions

-Well structured programmed - Poorly structured - nonprogrammed

Decision Making Conditions

- Certainty - Risk - Uncertainty

Decision-Making Process

Decision Makers Style - Directive - Analytic - Conceptual - Behavioral

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Making Decisions:
Rational Decision Making describes choices
that are consistent and value maximizing within specified constraints.

Bounded Rationality pertains to behavior that is

rational within the parameters of a simplified decisionmaking process, which is limited or bounded by an individuals ability to process information.

Intuitive Decision Making refers to a

subconscious process of making decisions on the basis of experience and accumulated judgment.
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Assumptions of Rationality

The problem is clear and unambiguous. A single, well defined goal is to be achieved. All alternatives and consequences are known. Preferences are clear. Preferences are constant and stable. No time or cost constraints exist. Final choice will maximize payoff.

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What is intuition?
Experience-based decisions Managers make decisions based on their past experiences. Managers can make decisions based on the feelings or emotions Managers make decisions based on skills, knowledge, and training Managers make decisions on ethical values or culture Managers use data from subconscious mind to help them make decisions

Affect-initiated decisions

Cognitive-based decisions

Values or ethics-based decisions Subconscious mental processing

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Types of Problems and Decisions

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Well-Structured Problems (WSP) and Programmed Decisions (PD). WSP are straight-forward, familiar, and easily defined problems. PD is a repetitive decision that can be handled by a routine approach. (EX: customer wanting to return a purchase to retails store, dropping subject, etc.) Poorly-Structured Problems (PSP) and Nonprogrammed Decisions (NPD). PSP are problems that are new or unusual and for which information is ambiguous or incomplete. NDP is a unique decision that requires a custom-made solution. (EX: selection of architect to design)

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Decision-Making Conditions

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Certainty pertains to a situation in which a manager

can make accurate decisions because all outcomes are known. (EX: deciding in which bank to deposit)

Risk refers to those conditions in which the decision maker is able to estimate the likelihood of certain outcomes. (EX: adding lift to the facility) Uncertainty pertains to a situation in which a decision maker has neither certainty nor reasonable probability estimates available.
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Decision-Making Styles
Directive Style a decision making style characterized by low tolerance for ambiguity and a rational way of thinking. Efficient and effective. Focus on short run. Minimal information and assessing few alternatives. Analytic Style - a decision making style characterized by high tolerance for ambiguity and a rational way of thinking. Want more information and alternatives before making decisions.

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Decision-Making Styles

Conceptual Style - a decision making style characterized by high tolerance for ambiguity and a intuitive way of thinking. Tend to be very broad in their outlook and will look at many alternatives. Focus on long run and finding creative solutions to problems. Behavioral Style - a decision making style characterized by low tolerance for ambiguity and a intuitive way of thinking. Work well with others. Concerned about the achievements of subordinates and respective to suggestions from others.

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Why Managers Fail in Planning

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Lack of commitment in planning Interchanging planning with plans Failure to develop and implement sound strategies Lack of meaningful objectives and goals Tendency to underestimate the importance of planning premises Failure to see the scope of plans Failure to see planning as a rational process Too much reliance on experience Failure to use the principle of limiting factor Lack of management support Lack of clear delegation Lack of adequate control techniques and information

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Planning Tools and Techniques

Techniques for assessing the environment

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Environmental scanning pertains to the screening of large amount of information to anticipate and interpret changes in the environment.
Competitor intelligence seeks to identify who competitors are, what they are doing, and how their actions will affect the organization.

Forecasting predictions of outcomes.

Quantitative forecasting applies a set of mathematical rules to a series of past data to predict outcomes. Qualitative forecasting - uses the judgment and opinions of knowledgeable individuals to predict outcomes.

Benchmarking the search for the best practices among competitors or non-competitors that lead to their superior performance.
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Techniques for allocating resources

Planning Tools and Techniques

The Manager

Resources refers to the assets of the organization including financial, physical, human, intangible, and structural/cultural.

Budgeting/ Budget a numerical plan for allocating resources to specific activities. Scheduling refers to detailing what activities have to be done, the order in which they are to be completed, who is to do each, and when they are to be completed. Breakeven analysis refers to a technique for identifying the point at which total revenue is just sufficient to cover total costs. Linear Programming pertains to a mathematical technique that solves resource allocation problems. Colegio de San Juan de Letran

Planning Tools and Techniques

Contemporary planning techniques

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Project management refers to the task of getting a projects activities done on time, within budget, and according to specifications. Scenario planning pertains to a consistent view of what the future is likely to be.

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