PPM - Unit Two: BINAYAK ACADEMY, Gandhi Nagar 1st Line, Berhampur
PPM - Unit Two: BINAYAK ACADEMY, Gandhi Nagar 1st Line, Berhampur
PPM - Unit Two: BINAYAK ACADEMY, Gandhi Nagar 1st Line, Berhampur
PLANNING PROCESS
STAGES IN PLANNING
Planning is an intellectual process which the managers carry out for the efficient
management of the organization. The nature of this exercise will differ from one
organization to another and from one managerial level to another. However, the general
stages to be followed in laying down the organizational plans are described below:
TYPES OF PLANS
Plans can be classified as (1) purposes or missions, (2) objectives or goals, (3) strategies,
(4) policies, (5) procedures, (6) rules, (7) programs, and (8) budgets.
1. Purposes or Missions
The mission, or purpose (the terms are often used interchangeably), identifies the basic
function or task of an enterprise or agency or any part of it. Every kind of organized
operation has, or at least should have if it is to be meaningful, a purpose or a mission. In
every social system, enterprises have a basic function or task assigned to them by society.
For example, the purpose of a business generally is the production and distribution of goods
and services. The purpose of a state highway department is the design, building, and
operation of a system of state highways. The purpose of the courts is the interpretation of
laws and their application. The purpose of a university is teaching, research, and providing
services to the community. Although we do not do so, some writers distinguish between
purposes and missions. While a business, for example, may have a social purpose of
producing and distributing goods and services, it can accomplish this by fulfilling a mission
of producing certain lines of products. The missions of an oil company, like Exxon, are to
search for oil and to produce, refine, and market petroleum and many petroleum products,
from diesel fuel to chemicals. The mission of the Du Pont Company has been expressed as
"better things through chemistry," and Kimberly-Clark (noted for its Kleenex trademark)
regards its business mission as the production and sale of paper and paper products. In the
1960s, the mission of NASA was to get a person to the moon before the Russians. Hallmark,
which has expanded its business beyond greeting cards, defines its mission as "the social
expression business." It is true that in some businesses and other enterprises, the purpose
or mission often becomes fuzzy. For example, many conglomerates have regarded their
mission as synergy,* which is accomplished through the combination of a variety of
companies.
2. Objectives or Goals
Objectives, or goals, (the terms are used interchangeably in this book), are the ends toward
which activity is aimed. They represent not only the end point of planning but also the end
toward which organizing, staffing, leading, and controlling are aimed.
3. Strategies
For years the military used the word "strategies" to mean grand plans made-light of what it
was believed an adversary might or might not do. While the term "strategy" still usually has
a competitive implication, managers increasingly use it to reflect broad areas of an
enterprise operation. In this book, strategy is defined as the determination of the basic
long-term objectives of an enterprise and the adoption of courses of action and allocation of
resources necessary to achieve these goals.
4. Policies
Corporate
Objectives
Departmental
Objectives
Target for
individual
subordinates
Performance
review
Establishment
of checkpoints
Decision Making
Decision-making is an essential aspect of modern management. It is a primary function of
management. A manager's major job is sound/rational decision-making. He takes hundreds
of decisions consciously and subconsciously. Decision-making is the key part of manager's
activities. Decisions are important as they determine both managerial and organizational
actions. A decision may be defined as "a course of action which is consciously chosen from
among a set of alternatives to achieve a desired result." It represents a well-balanced
judgment and a commitment to action.
It is rightly said that the first important function of management is to take decisions on
problems and situations. Decision-making pervades all managerial actions. It is a
continuous process. Decision-making is an indispensable component of the management
process itself.
Means and ends are linked together through decision-making. To decide means to come to
some definite conclusion for follow-up action. Decision is a choice from among a set of
alternatives. The word 'decision' is derived from the Latin words deciso which means 'a
cutting away or a cutting off or in a practical sense' to come to a conclusion. Decisions are
made to achieve goals through suitable follow-up actions. Decision-making is a process by
which a decision (course of action) is taken. Decision-making lies embedded in the process
of management.
According to Peter Drucker, "Whatever a manager does, he does through decision-making".
A manager has to take a decision before acting or before preparing a plan for execution.
Moreover, his ability is very often judged by the quality of decisions he takes. Thus,
management is always a decision-making process. It is a part of every managerial function.
The Oxford Dictionary defines the term decision-making as "the action of carrying out
or carrying into effect".
2.
Decision making implies choice: Decision making is choosing from among two or
more alternative courses of action. Thus, it is the process of selection of one solution
out of many available. For any business problem, alternative solutions are available.
Managers have to consider these alternatives and select the best one for actual
execution. Here, planners/ decision-makers have to consider the business environment
available and select the promising alternative plan to deal with the business problem
effectively. It is rightly said that "Decision-making is fundamentally choosing between
the alternatives". In decision-making, various alternatives are to be considered
critically and the best one is to be selected. Here, the available business environment
also needs careful consideration. The alternative selected may be correct or may not
be correct. This will be decided in the future, as per the results available from the
decision already taken. In short, decision-making is fundamentally a process of
choosing between the alternatives (two or more) available. Moreover, in the decisionmaking process, information is collected; alternative solutions are decided and
considered critically in order to find out the best solution among the available. Every
problem can be solved by different methods. These are the alternatives and a
decision-maker has to select one alternative which he considers as most appropriate.
This clearly suggests that decision-making is basically/fundamentally choosing
between the alternatives. The alternatives may be two or more. Out of such
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3.
4.
5.
6.
Means and not the end: Decision-making is a means for solving a problem or for
achieving a target/objective and not the end in itself.
7.
Relates to specific problem: Decision-making is not identical with problem solving but
it has its roots in a problem itself.
8.
9.
10. Pervasive process: Decision-making process is all pervasive. This means managers
working at all levels have to take decisions on matters within their jurisdiction.
11. Responsible job: Decision-making is a responsible job as wrong decisions prove to be
too costly to the Organisation. Decision-makers should be matured, experienced,
knowledgeable and rational in their approach. Decision-making need not be treated as
routing and casual activity. It is a delicate and responsible job.
Advantages of Decision Making
1.
2.
3.
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5.
Decision-making is a delicate and responsible job: Managers have to take quick and
correct decisions while discharging their duties. In fact, they are paid for their skill,
maturity and capacity of decision-making. Management activities are possible only
when suitable decisions are taken. Correct decisions provide opportunities of growth
while wrong decisions lead to loss and instability to a business unit.
2.
Analyzing the Problem: After defining the problem, the next step in the decisionmaking process is to analyze the problem in depth. This is necessary to classify the problem
in order to know who must take the decision and who must be informed about the decision
taken. Here, the following four factors should be kept in mind:
1.
2.
3.
4.
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Collecting Relevant Data: After defining the problem and analyzing its nature, the
next step is to obtain the relevant information/ data about it. There is information flood in
the business world due to new developments in the field of information technology. All
available information should be utilised fully for analysis of the problem. This brings clarity
to all aspects of the problem.
4.
Developing Alternative Solutions: After the problem has been defined, diagnosed
on the basis of relevant information, the manager has to determine available alternative
courses of action that could be used to solve the problem at hand. Only realistic
alternatives should be considered. It is equally important to take into account time and cost
constraints and psychological barriers that will restrict that number of alternatives. If
necessary, group participation techniques may be used while developing alternative
solutions as depending on one solution is undesirable.
5.
Selecting the Best Solution: After preparing alternative solutions, the next step in
the decision-making process is to select an alternative that seems to be most rational for
solving the problem. The alternative thus selected must be communicated to those who are
likely to be affected by it. Acceptance of the decision by group members is always desirable
and useful for its effective implementation.
6.
Converting Decision into Action: After the selection of the best decision, the next
step is to convert the selected decision into an effective action. Without such action, the
decision will remain merely a declaration of good intentions. Here, the manager has to
convert 'his decision into 'their decision' through his leadership. For this, the subordinates
should be taken in confidence and they should be convinced about the correctness of the
decision. Thereafter, the manager has to take follow-up steps for the execution of decision
taken.
7.
Ensuring Feedback: Feedback is the last step in the decision-making process. Here,
the manager has to make built-in arrangements to ensure feedback for continuously testing
actual developments against the expectations. It is like checking the effectiveness of followup measures. Feedback is possible in the form of organised information, reports and
personal observations. Feed back is necessary to decide whether the decision already taken
should be continued or be modified in the light of changed conditions.
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