The failure of managers to recognize that there are several types of plans has often caused difficulty in making planning effective.
The failure of managers to
recognize that there are several types of plans has often caused difficulty in
making planning effective. Plans encompass any cause of future action and hence
vary as under.
Purposes or missions Identifies the basic task of a
firm or agency. Ex. Purpose of business is the production and distribution of
goods and services
Conglomerates express their
mission as ‘synergy’ which is achieved through combination of a variety of
companies. Therefore mission is the
organization’s purpose and fundamental reason for existence. A mission
statement is the broad declaration of the basic. Unique purpose and scope of
operations distinguish the organization from others.
things through chemistry
and sale of
expression of business
responsibility to doctors,
patients and mothers
world’s obligation for
protection of the environment
Objectives and goals Planning aims at goal setting.
Goals and objectives are ends towards the activity aimed. They represent the
end toward organizing, staffing, leading and controlling. Each department may
have its own goals, which contribute to objectives of organizations as
serve many purposes like the following
Facilitate the controlling function
have levels that compare with hierarchy of organization as depicted in Table 17 - 1.
Strategies are grand plans in the
light of what it was believed an adversary might or might not do. Strategy may
be defined as follows. “Strategy is the determination of basic long term
objectives of an enterprise and the adoption of courses of action and
allocation of resources necessary to achieve these goals”. A strategy might include such as
marketing directly rather than through distributors or concentrating on
proprietary products of having a full
time of autos ex: General Motors. Strategies
are of two types Generic strategies - involve organization expansion
in some select areas. The generic strategies include – 1. Overall
cost leadership 2. Differentiation 3. Focus Grand strategies - A master strategy that provides direction at the
Drucker gives eight
major areas for
goal setting by organizations.
Policies Policies are plans or general
statements or understandings that guide or channel thinking in decision making.
Policies define an area in which decision is to be made and ensure consistency
to objectives. Policies help managers maintain control and delegate authority. Policies exist at all levels in
an organization. They may be major or minor. Policies include hiring trained
engineers, encouraging employee suggestions, confirming to high standards,
setting competitive prices, cost plus pricing etc. Companies can have policy
manuals which may stipulate non-acceptance of gifts from suppliers, favours of
entertainment or seek outside employment. Making
policies is difficult for 1. They are
seldom defined in writing 2. Delegation
of authority will create confusion 3. Actual
policy may be difficult to ascertain and intended policy may not be clear. Policies are necessary at different hierarchical
levels as shown in Figure 17-4
Procedures Procedures are plans that
establish a required method of handling future activities. They are guides to
action, rather than thinking and they detail the exact manner in which certain
activities must be accomplished. Procedure is thus a prescribed series of steps
to be taken under certain recurring circumstances. Well-established ones are
called ‘Standard Operating Procedures’. Ex: In Banks SOPs govern how tellers
handle deposits. The following procedures are common and are across
means & route
Rules “A statement that spells out specific actions to be taken or not taken
in a given situation” Unlike procedures, rules do not normally specify a series of steps. They
dictate what must or must not be done. Ex: 1. “No Smoking” is a rule
unrelated to procedure.
Fraction of more than half ounce should be treated as one ounce.
Policies guide decision making,
but rules allow no discretion in decision making.
Programmes involve different
departments or units of organization composed of several different projects
which may take about one year to complete. Programme may be defined as follows.
“A programme is a comprehensive
plan that coordinates a complex set of activities related to a major non
“Programmes are a complex of goals, policies
procedures, rules, task assignments, steps to be taken, resources to be
employed and other elements necessary to carry out a given course of action
supported by budgets”.
of programmes are
1. A major
airline acquiring $400 million fleet of jets
2. Five year programme to improve status and quality of supervisors.
3. A minor programme of a supervisor to improve morale of workers.
programmes include six steps: i.
Dividing the project into parts ii. Determining
relationships and pulling in a sequence iii. Deciding
responsibilities for mangers iv. Determining
how to complete and what resources are necessary v. Estimating
time requirements vi. Developing
a schedule of implementation A primary
programme may trigger off a series of small programmes.
Budgets Budget is
a numberized programme. It can be defined as follows. “Budget
is a statement of expected results expressed in numerical terms”
Budget can be expressed in financial terms, labour hours, units, machine
hours etc. It may show expenses, capital outlays, cash flows etc. A budget is a fundamental planning instrument. Budget forces precision
according to the level of
agency to identify goals,
programmes to meet them and give cost estimates.
during budget period.
divestiture of fixed assets.
Tags : Strategic Management - Strategy Implementation
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