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Introduction to planning
A plan is a blueprint for goal achievement and specifies the necessary
resource allocations, schedules, tasks and other actions.
Planning involves determining the organisational goals and defining the
means of achieving them.
Goal is a desired future state that the organisation attempts to realize.
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Benefits of goals and plans
Legitimacy
Source of motivation and commitment
Resource allocation
Guides to action
Rationale for decisions
Standards of performance
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Mission statement
Mission statement emphasizes the organisation’s reason for existence.
Mission statement outlines the organisational values, aspiration and reasons for being.
Mission statement would distinguish the organisation from others of a similar type.Coca Cola Mission
Our mission is:
To refresh the world in mind, body and spirit
To inspire moments of optimism and happiness through our brands and actions
To create value and make a difference
BMS is committed to creating an intellectually stimulating learningenvironment through inspirational teaching and research within an inclusiveacademic culture that benefits the learner, community, country, and the region.
Ford Motor CompanyWe are a global family with a proud heritage passionately committed to providing personal mobility forpeople around the world.
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Areas to be addressed in an effectivemission statement
Product and business priorities
Market and specific requirement of its customers
Technology and operational capabilities
Core values of an organization
Interest of key stakeholders
Core purpose of existence
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Types of goals and plans Strategic goals
Official goals, broad statements about the organisation.
Strategic plans
Define the action steps the company intends to attain.
The blue print that defines activities and resource allocation.
Tactical goals and plans
Tactical plans are designed to help execute major strategic plans and to accomplish specific part of the company’s strategy.
Plans of the divisions and departments
Operational goals
Results expected from departments, work groups and individuals.
Operational plans
Develop at the lower levels of the organisation to specify action steps towards achieving operational goals.
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Criteria for effective goal setting
Specific and measurable
Defined time period
Cover key result areas
Choice and clarity
Challenging but realistic
Linked to rewards
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Planning approaches
Management by Objectives
(MBO)
Single use plans
Standing plans
Contingency plans
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01. Management by objective
MBO is a system whereby managers and employees define goals for every
department, project, and person and use them to monitor subsequent
performance.
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MBO benefits & challenges
Benefits CHALLENGES
Manager and employee efforts are focused on
activities that will lead
to goal attainment.
Performance can be improved at all company
levels
Employees are motivated
Departmental and individual goals are aligned
with company goals
Constant change prevents MBO from
taking hold.
Poor employer-employee relations
reduces MBO effectiveness.
Strategic goals may be displaced by operational goals.
Mechanistic organisational values that discourage participation, can
harm the
MBO process.
Too much paper work saps MBO energy.
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02. Single use plans
Single use plans are developed to achieve a set of goals that are not likely tobe repeated in the future.
Help to carryout a course of action that is not likely to be repeated in the
future
A programme is a complex set of objectives and plans to achieve an important,
one-time organisational goal
A project is similar to a programme, but generally smaller in scope and complexity
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03. Standing plans Standing plans are ongoing plans that provide guidance for tasks or situations that
occur repeatedly within the organisation.
Developed to carry out the activities that recur regularly over the period of time
A policy is a general guide to action and provides direction for people within the
organisation
Procedures define a precise series of steps to be used in achieving a specific job
Rules describe how a specific action is to be performed
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04. Contingency planning
Contingency plans define company responses to be taken in
the case of emergencies, setbacks or unexpected conditions.
To develop contingency plans managers identify important
factors in the environment such as possible economic
downturns, declining markets, increases in cost of supplies,
new technological developments or safety accidents.
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Strategic planning
Is a formal process designed to help an organisation identify and maintain an
optimal alignment with the most important elements of the environment
within which the organisation resides.
Is a complex and ongoing process of organisational change.
How will weget there?
Where do wewant to be?
Where are wenow?
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Levels of strategy
Corporate-Level Strategy
The level of strategy concerned with the question, “What business are we in?” Pertainsto the organisation as a whole and the combination of business units and product linesthat make it up.
Business-Level Strategy
The level of strategy concerned with the question, “How do we compete?” Pertains toeach business unit or product line within the organisation.
Functional-Level Strategy
The level of strategy concerned with the question, “How do we support the business-level strategy?”. Pertains to all of the organisation’s major departments.
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Benefits & limitations of planning
Benefits
Goals and plans provide a source of
motivation and commitment
Goals and plans guide resource
allocation
Goals and plans are a guide to action
Goals and plans set a standard of
performance
Limitations
Goals and plans can create a false
sense of certainty
Goals and plans may cause rigidity in a
turbulent environment
Goals and plans can get in the way of
intuition and creativity
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Introduction to organising
Organizing is the deployment of organizational resources to achieve strategic
goals.
Organizing is deciding how best to group organizational activities and
resources so that the organization will achieve its goals.
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Purpose of organising
Divides work to be done into specific jobs and departments
Assigns tasks and responsibilities associated with individual jobs
Establishes relationships among individuals, groups and departments
Establishes formal lines of authority
Allocates and deploys organisational resources
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Organisational structure
Organizational structure is the formal arrangement of jobs within an organisation.
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Organisational chart
The organization chart shows departments and job titles , with lines linking senior
executives to the departments of people for whose work they are responsible.
This shows who people report to, and clarifies four features of the formal structure:
Tasks – the major activities of the organization
Subdivisions – how they are divided
Levels – the position of each post within the hierarchy
Lines of authority – these link the boxes to show who people report to
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Organisational design
A process that involves decisions about six key elements
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization
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Work specialization
Dividing work activities into separate job tasks.
Also known as division of labour
People become more expert in one task than they could be in several and are
more likely to come up with improved ideas or methods.
01
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Chain of command
The lines of authority show the links between people – who they report to and
who reports to them.
In particular chain of command shows who they can ask to do work, who they
can ask for help and who will be expecting results from them.
02
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The span of control
The span of control is the number of subordinates reporting directly to theperson above them in the hierarchy.
03
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Tall vs. flat organisational structure
Many layers of management between
lowest and highest levels
Small span of control
Close supervision
Better communication
Reduce delegation
Fewer levels in hierarchy
Wider span of control
Subordinates greater decision making
authority
Few management cost
Greater employee motivation but less
control
Characteristics of tall structure Characteristics of flat structure
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Centralization and decentralization
Centralization is when a relatively large number of decisions are taken bymanagement at the top of the organization.
Decentralization is when a relatively large number of decisions are takenlower down the organization in the operating units.
04
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Formalization
Formalization refers to how standardized an organization’s jobs are and theextent to which employee behavior is guided by rules and procedures
These include rules, procedures, instruction manuals, job descriptions (thingswhich people must do)
05
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Departmentalization
Process of grouping jobs together to ensure coordination of tasks in known asdepartmentalization.
Departmentalization identifies what job tasks will be done by whom?
Common work activities
Common form of departmentalization: Functional departmentalization
Geographical departmentalization
Product departmentalization
Process departmentalization
Customer departmentalization
06
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Departmentalization
Basis for grouping positions into departments
Choices regarding chain of command
Traditional approaches:
Vertical Functional
Divisional
Matrix
Innovative approaches:
Teams
Virtual Networks
06
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Functional and divisional
Vertical Functional Approach
Grouping of positions into departments based on skills, expertise, work activities,
and resource use
Divisional Approach
Grouping based on organisational output
Product, Program, Business (self-contained unit)
Geographic or Customer-Based Divisions
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Matrix and team approach
Matrix approach combines functional and divisional approaches
Improve coordination and information
Dual lines of authority
Team approach is a very widespread trend
Allows managers to delegate authority
Flexible, responsive
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Virtual network approach
Extends idea of horizontal coordination and collaboration
Partnerships
Alliances
Could be a loose interconnected group
i.e., outsourcing
Virtual network structure means that the firm subcontracts most of its major
functions to separate companies
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Authority
Authority is the formal and legitimate right to make decisions and issues orders
Power that has been legitimized by an organisation
Authority is vested in organisational positions, not in people
Authority is received from mainly legal sources but managers can develop authority by
acceptance as well.
Authority is accepted by subordinates
Authority flows down the vertical hierarchy
Authority can be transferred from one to another
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responsibility
Responsibility is the duty to perform the task or activity
assigned
Requirements of assigned task to be done
It should be match with the responsibility
Ultimate responsibility cannot be transferred
Responsibility is highly connected to accountability
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accountability
The obligation to demonstrate and take responsibility
for performance in light of agreed expectations.
There is a difference between responsibility and
accountability:
responsibility is the obligation to act
accountability is the obligation to answer for an action
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delegation
Is the process whereby superior gives
subordinate authority over a defined area
which falls within the scope of superior’s
authority.
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Benefits of delegation
Increases associate responsibility and ownership.
Builds team environment
Associates gain knowledge and skills.
Allows for flexibility in scheduling.
Trains individuals for the next level
Allows to meet deadlines
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Barriers to delegation
Lack of abilities to carry out the delegated tasks
Fear of subordinates
Fear of losing control
Fear that subordinates might do a better job
Some employees do not accept the delegated tasks
Concern about what to do with extra time
Feeling of indispensability
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