CHAPTER 1

CHAPTER 4PLANNING & ORGANISING

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2015 Flat World Education2015 Flat World Education1LEARNING OBJECTIVES2 1.Explain the concept of organizational mission and vision goal2. Define goals and plans and explain the relationship between them3. Describe the types of goals and characteristics of effective goals.4. Define the characteristics of effective goals.5. Describe the four essential steps in the management by objectives (MBO) process6. Explain the benefit and problem of MBO .

2015 Flat World Education2LEARNING OBJECTIVES3 7. Define organisation managementExplain the function of OrganizingDefine organisation structureExplain how elements the organization design contribute to achieve organisaiton goals

2015 Flat World Education3MISSION & vISION MISSION

.4 . A statement of the overall purpose of an organization. It describes what you do, for whom you do it and the benefit, e.g. "To provide consumers with high-quality, price-competitive widgets to meet their personal, business and recreational needs.

Mission statements are longer than vision statements, often because they convey the organizations core values. 2015 Flat World Education4MISSION & vISION VISIONA picture of the "preferred future;" a statement that describes how the future will look if the organization achieves its ultimate aims, e.g. "The widgets of choicefor a value-focused world. Answer the question Where is this organization going?.5 .

2015 Flat World Education5Mission AND VISION

.6 . Example : The Starbucks mission statement also communicate the organizations values:Provide a great work environment and treat each other with respect and dignity2. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.3. Contribute positively to our communities and our environment.4. Recognize that profitability is essential to our future success

2015 Flat World Education6MISSION AND VISION

.7 . Mission and vision statements play three critical roles: (1) communicate the purpose and value of the organization to stakeholders (2) inform strategy development, (3) develop the measurable goals and objectives to implement strategy.

These interdependent, cascading roles, and the relationships among them, are summarized in the figure 1.0

2015 Flat World Education7KEY ROLE OF MISSION AND VISION

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Figure 1.0 2015 Flat World Education8GOAL /OBJECTIVE/STRATEGY 9 1.Goals : Broad, long-term aims that define accomplishment of mission e.g Grown profitability. Maximize net income by increasing revenues and controlling cost. 2. Objectives: Specific, quantifiable, realistic targets that measure the accomplishment of a goal over a specified period of time, e.g. "Increase revenues by 10% in 2004. Strategies: Broad activities required to achieve an objective, control a critical success factor, or overcome a barrier, e.g. Implement a program to widely promote our success as a quality producer

2015 Flat World Education9GOAL AND PLAN 10 1. Plan is a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions. Goals specify future ends; plans specify todays means. The concept of planning usually incorporates both ideas; it means determining the organizations goals and defining the means for achieving them.

2015 Flat World Education10LEVEL OF GOALS AND PLANS 11 The planning process starts with a formal mission that defines the basic purpose of the organization, The mission is the basis for the strategic of goals and plans to shape the tactical level and the operational level.

2015 Flat World Education11LEVEL OF GOALS/PLANS 12 THREE LEVEL OF GOALS/PLANS :-

Strategic goals/plans establish by top managers for efficiency and effectiveness. It describe the roadmap to grow the business.

2. Tactical goals/plans are the responsibility of middle managers , specific steps to be taken by whom, how, when, what cost and to implement a strategy. Shorter time frames for one year or less

2015 Flat World Education12133) Operational plans/goal Develop by Supervisors, team leaders to support tactical plans . Two types :- a) Single-use plans - apply to activities that do not recur or repeat. A one-time occurrence, such as a special sales program b) Standing plans - are usually made once and retain their value over a period of years while undergoing periodic revisions and updates. e.g Policy, procedures

2015 Flat World Education13LEVEL OF GOALS AND PLANS 14

2015 Flat World Education14PURPOSE OF GOAL AND PLAN .15 . 1. Source of motivation and commitment. Goals and plans enhance employees motivation and commitment by reducing uncertainty and clarifying what they should accomplish. A plan lets employees know what actions to undertake to achieve the goal.

2. Resource allocation. Goals help managers decide where they need to allocate resources, such as employees, money, and equipment.

2015 Flat World Education15PURPOSE OF GOAL AND PLAN .16 . 3. Goals and plans provide a sense of direction. They focus attention on specific targets and direct employee efforts toward important outcomes.

Standard of performance. Because goals define desired outcomes for the organization, they also serve as performance criteria. They provide a standard of assessment

2015 Flat World Education16Criteria effective goal

.17 . Specific and Measurable it will state exactly what the organization intends to accomplish. Eg increase profit 5%Attainable - There should be a realistic chance that a goal can be accomplished. Provide appropriate skills, time, resourcesRelevant - Goals should be appropriate to and consistent with the mission and vision of the organizationTime-bound - it must have a starting and ending point. Helps to focus effort toward its achievement.

2015 Flat World Education17Criteria effective goal

.18 . Specific and Measurable it will state exactly what the organization intends to accomplish. Eg increase profit 5%Attainable - There should be a realistic chance that a goal can be accomplished. Provide appropriate skills, time, resourcesRelevant - Goals should be appropriate to and consistent with the mission and vision of the organizationTime-bound - it must have a starting and ending point. Helps to focus effort toward its achievement.

2015 Flat World Education18MANAGEMENT BY OBJECTIVES

.19 . Management by objectives (MBO) is a system whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance or comparing performance against objectives.

2. Four major activities make MBO successful :- i) Set goals. Setting goals involves employees at all levels and looks beyond day- to-day activities to answer the question What are we trying to accomplish?

2015 Flat World Education19MANAGEMENT BY OBJECTIVES

.20 . 2. Develop action plans. An action plan defines the course of action needed to achieve the stated goals. Action plans are made for both individuals and departments3. Review progress. A periodic progress review is important to ensure that action plans are working. Three, six, nine month reviews during the year.

4. Appraise overall performance. Carefully evaluate whether annual goals have been achieved for both individuals and departments.

2015 Flat World Education20BENEFITS MANAGEMENT BY OBJECTIVES

.21 . Manager and employee efforts are focused on activities that will lead to goal attainment.2. Performance can be improved at all company levels.3. with MBO, the subordinates feel proud of being involved in the organizational goals and will improves their morale and commitment4. Departmental and individual goals are aligned with company goals5. The system of periodic evaluation lets the subordinates know how well they are doing.

2015 Flat World Education21PROBLEM MANAGEMENT BY OBJECTIVES

.22 . Constant change prevents MBO from taking hold.2. Strategic goals may be displaced by operational goals.3. Too much paperwork Employees may be under pressure when setting goals and objectives and these goals may be set unrealistically high. This may lower their morale and motivation 2015 Flat World Education22ORGANISING

.23 . Oganising in Management defines :

The process of identifying and grouping the work to be performed defining and delegating responsibility and authority and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives

. 2015 Flat World Education23PURPOSE OF ORGANISING

.24 . 1) Divides work to be done into specific jobs and departments2) Assigns tasks and responsibilities associated with individual jobs3) Coordinates diverse organizational tasks4) Establishes relationships among individuals, groups, and departments5) Establishes formal lines of authority6) Allocates and deploys organizational resources

2015 Flat World Education24 ORGANISATION STRUCTURE

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2015 Flat World Education BASIC ELEMENTS OF ORGANISATION DESIGN Organizational design is engaged when managers develop or change an organization's structure. Organizational Design is a process that involves decisions about the following seven key elements.Work specializationDepartmentalizationUnity of commandSpan of controlAuthority Centralization and decentralizationFormalization

282015 Flat World Education BASIC ELEMENTS ORGANISATION DESIGN 1) Work Specialization tasks in the organization are divided into separate jobs with each step completed by a different person

292015 Flat World Education BASIC ELEMENTS ORGANISATION DESIGN 2) Five types of departmentalization :- a) Functional - Grouping jobs by functions performed b) Product - Grouping jobs by product line c) Geographical - Grouping jobs on the basis of geography d) Process - Grouping jobs on the basis of product or customer flow e) Customer - Grouping jobs by type of customer and needs

302015 Flat World Education a) Functional Efficiencies put together people similar skills and knowledge in different department In-depth specialization Poor communication across functional areas b) GeographicalMore effective and efficient handling of specific regional issues that ariseServe needs of customers in the same regional E.g Southern region

31BASIC ELEMENTS ORGANISATION D ESIGN 2015 Flat World Education

BASIC ELEMENTS ORGANISATION DESIGN

c) . Product Allows specialization in particular products and servicesManagers can become experts in their industryCloser to customers. E.g. Housing Loan, Vehicle Loan d) Process More efficient flow of work activitiesCan only be used with certain types of productsE.g . Inspection & Shipping Dept e) CustomerCustomers needs and problems can be met by specialistsE.g.

322015 Flat World Education ORGANISATION DESIGN 3) Authority - The rights in a managerial position to tell what to do and to expect them to do it. Three types authority :- a) Line authority is direct supervisory authority that flows downward in an organization from superior to subordinate . b) Staff authority is advisory in nature. It does not provide any basis for direct control over the subordinates or activities of other departments c) Functional authority is authority delegated to an individual or department over specific activities undertaken by personnel in other departments

332015 Flat World Education ORGANISATION DESIGN 4) Unity of command: The management principle that each person should report to only one manager

5) Span of controlThe number of employees who can be effectively and efficiently supervised by a manager

342015 Flat World Education BASIC ELEMENTS ORGANISATION DESIGN 6) Centralization - Decision making is concentrated at a single point in the organization Decentralization - lower-level employees provide input or actually make decisions 7) FormalizationJobs are standardized and employee behaviour is guided by rules and proceduresHighly formalized jobs offer little discretion over what is to be doneLow formalization means fewer constraints on how employees do their

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