Principles of Management - Planning

1. Principles of Management
Planning

2. Definition
• According to Allen, “A plan is a trap laid to capture the
future.”
• According to Koontz & O’Donell, “Planning is deciding in
advance what to do, how to do and who is to do it. Planning
bridges the gap between where we are to, where we want to
go. It makes possible things to occur which would not
otherwise occur”.
• According to Alford and Beatt, “Planning is the thinking
process, the organized foresight, the vision based on fact
and experience that is required for intelligent action.”
• According to Abraham Lincoln “We must plan for the future,
because people who stay in the present will remain in the
past.”

3. Basic Managerial Functions
• Planning is one of the primary functions of management
• Setting of goals to be achieved and lines of action to be
followed precedes the organization, direction, supervision
and control. Hence planning precedes other functions of
management.
• Planning involves selecting objectives or goals and the
course of actions to achieve them:
• Provides the bridge to take us from where we are to where we want to
go;
• Is a rational approach to achieving pre-selected objectives - based on
innovation, knowledge and purpose;
• Decision making in choosing the best from alternative courses of action
and is integral to planning;

5. Characteristics of Planning
• Goal-oriented
• Looks ahead
• An intellectual process
• Involves choice & decision making
• Primary function of management
• Continuous Process
• Designed for efficiency
• Planning is pervasive

8. Advantages
• Facilitates management by objectives
• Minimizes uncertainties
• Provides competitive edge and improves effectiveness
• Encourages innovations / brain-storming
• Facilitates control and co-ordination
• Helps in achieving economies of scale / synergies

9. Disadvantages
• Internal Limitations
– Rigidity
– Misdirected Planning
– Time consuming
– Probability in planning
– False sense of security
– Expensive
• External Limitations of Planning
– Political Climate
– Labour Union
– Technological changes-
– Policies of competitors
– Natural Calamities
– Changes in demand and prices

11. Types
• Long Term & Short Term
• Formal & Informal Plans
• Proactive & Reactive Plans
• Strategic
– A strategic plan is an outline of steps designed with the goals of the
entire organization as a whole in mind, rather than with the goals of
specific divisions or departments. Strategic planning begins with an
organization's mission.
• Operational Plans
– An operational plan is one that a manager uses to accomplish his or
her job responsibilities. Supervisors, team leaders, and facilitators
develop operational plans to support tactical plans

12.  Strategic Planning
A strategic plan is an outline of steps
designed with the goals of the entire
organization as a whole in mind, rather than
with the goals of specific divisions or
departments. Strategic planning begins with
an organization's mission.
– Formulation
– What, where
– Ends
– Vision
– Effectiveness
– risk
– Long Term
– Formal
 Operational Planning
An operational plan is one that a manager
uses to accomplish his or her job
responsibilities. Supervisors, team
leaders, and facilitators develop
operational plans to support tactical
plans
– Implementation
– How
– Means
– Plans
– Efficiency
– Control
– Short term / Long term
– Formal / Informal
Strategic Planning
vs. Operational Planning

13. No planning
• Creates aimlessness and wandering

14. Planning Process

18. PLANNING IN WORK
ENVIRONMENT
Case Study

19. The Conceptualisation
• Investors like Harshad Mehta diverted Rs. 35 Bn from the
bank system via Ready Forward Deals to the equity market
which they manipulated.
• The Government of India on the recommendation of
Pherwani Committee in 1991 set up the National Stock
Exchange of India - NSE.
• This was a planned move by the MOF to put an end to the
weaknesses of BSE like low transparency, bureaucracy and
unreliable clearing and settlement systems, which led to the
stock market crashed in April 1992.
• The Government & the Ministry of Finance Strategically
Planned the inception of a new generation Stock Exchange
• Today the NSE is the largest stock exchange in India and
the fourth largest in the world.
• Proper planning, has led this achievement.

20. Operational / Functional Planning
• 20 yrs ago we started in Mumbai and then went nation wide
electronically using technological advancements.
• We also planned for segments like
– Capital Market
– Futures & Options
– Currency Derivatives
• All this required planning at different stages
– By scouting the investment market potential – understanding of
market dynamics and investor appetite
– Laying a detailed procedure for implementation with timelines
– Creating investor awareness and educating the common man on
investing safely
– Developed the necessary back-end system for implementation
– Going live with the project !!
• This entire process involved leading a group of people and
monitoring the progress of the plan at different stages

21. Planning for Unforeseen Eventuality
• As we grew the volumes increased, we needed a robust
system and a Disaster Recovery (DR) site to protect us from
any unforeseen circumstances
• We planned for a DR site at Chennai.
• We implemented a Business Continuity Management (BCM)
plan and deployed elaborate DR solutions as a part of the
BCM exercise in the form of a four-step plan
– Business Impact Analysis
– Strategy Selection
– Detailed Plan development and plan maintenance
– Testing, revisions and modifications

23. LONG-TERM, FORMAL,
PROACTIVE, OPERATIONAL PLAN
A Case Study on

24. The Planning Process
• Set Goal
– A pharmaceutical company set a goal for itself to venture into the
obesity drug market since it is one of the major lifestyle diseases.
– The goal set, objective is established and a Mission is set !
• Gather / Analysis Data
– To do a market assessment it assigned the task to a research
agency to gather and analysis the data on the target audience and
market dynamics.
– Guideline for Strategy formulation, evaluation of alternates, market reality,
risk assessment
– Basically preparing the ground for formulation the business plan

25. The Planning Process (contd.)
• Create Plan
– Based on the analysis the company formulated a phased Business
Plan with proper implementation timelines to roll out the drug in the
market
– A rational approach to achieving pre-selected objectives - based on market
analysis, knowledge and purpose
– choosing the best option action from the alternates available by brain-
storming through involvement and co-operation of the functional
management team
– A business plan formulated has the investment layout, the projected profit &
loss for a period of 5-10 years keeping in mind the best and the worst case
scenarios based on internal and external factors.
• Implement & Monitoring the Plan
– Using the Formulated Plan as a guideline company implemented the
same and continuously monitored its progress until successful
Market Launch of the Drug !

26. THANK YOU