unit 2 fmob

Objectives

• Describe the meaning, nature, importance, objectives, process, and techniques of planning.

• Describe the concept, process, types, and techniques of decision-making.

• Explain the concept, nature, and objectives of organizing.

• List different types of organizations, organization structure, and design.

• Describe centralization, decentralization, delegation, departmentation, and span of control.

Planning

2.1.1 Meaning, Nature, and Importance of Planning

• Planning is a fundamental management function that involves:

  • Deciding what needs to be done, when, how, and by whom.

  • A logical process to outline an organization’s future objectives.

  • Can be long-range, intermediate, or short-range.

  • Essential for growth and dealing with uncertainties.

Importance of Planning

• Improves Performance: Helps in achieving objectives efficiently.

• Minimizes Risk: Reduces uncertainty by anticipating future scenarios.

• Facilitates Coordination: Streamlines activities to avoid overlaps.

• Provides Direction: Offers a clear path for actions.

• Identifies Opportunities: Helps uncover future opportunities and threats.

• Basis for Control: Establishes standards for measuring performance.

2.1.2 Objectives and Characteristics of Planning

• Objectives of Planning:

  • Achieve organizational goals.

  • Facilitate decision-making.

  • Provide stability to organizations.

  • Optimize resource utilization.

  • Develop managerial capabilities.

  • Promote innovation.

Characteristics of Planning

• Goal-oriented: Focuses on achieving specific objectives.

• Pervasive: Needed at all levels and segments of the organization.

• Continuous Process: Plans are regularly updated.

• Intellectual Process: Involves critical and creative thinking.

• Futuristic: Anticipates and prepares for future challenges.

Principles of Planning

• Contribution to objectives, efficiency, timing, alternative choices, flexibility, and competitive strategies.

Limitations of Planning

• Inaccuracy in forecasts.

• Time-consuming processes.

• Rigidity in adherence to plans.

• Resistance to change.

• False sense of security for managers.

Types of Plans

2.1.3 Planning by Hierarchy

• Corporate Plan: Long-term strategy by top management.

• Tactical Plan: Intermediate plan by middle management.

• Operational Plan: Short-term plan for daily operations.

Planning by Use

• Single-use Plan: For specific projects (e.g., budgets, programs).

• Standing-use Plan: For routine matters (e.g., policies, procedures).

Planning by Flexibility

• Specific Plan: Clear tasks and resources defined.

• Flexible Plan: Guidelines allowing for adjustments.

Planning Process, Techniques, and Methods

2.1.4 Planning Process Steps

1. Analyze opportunities via SWOT.

2. Set specific goals and objectives.

3. Determine premises for planning.

4. Identify alternatives for action.

5. Evaluate and select the best alternative.

6. Formulate supportive plans.

7. Implement the plan.

8. Review process and outcomes.

Techniques of Planning

• Forecasting, SWOT analysis, scenario planning, benchmarking, participative planning, and use of staff planners.

Methods of Planning

• Top-Down: Plans initiated at the top levels.

• Bottom-Up: Plans initiated by lower management.

• Composite: Combination of both methods.

• Team Method: Collaborative planning by a team.

Barriers to Effective Planning

Individual-Based Barriers

• Unwillingness to set clear goals.

• Resistance to accept change.

Organization-Based Barriers

• Environmental factors affecting change.

• Constraints on resources and information.

• Group dynamics causing ineffective planning.

Decision Making

2.2.1 Concept

• Process of choosing among alternatives.

Importance of Decision Making

• Resource Utilization: Ensures effective use of resources.

• Problem Solving: Overcomes challenges to achieve goals.

• Business Growth: Leads to profitability and sustainability.

Types of Decision Making

• Programmed vs. Non-Programmed

• Routine vs. Basic decisions

Decision-Making Process

1. Establish objectives.

2. Identify the decision.

3. Gather information.

4. Identify alternatives.

5. Weigh evidence for each alternative.

6. Choose the best alternative.

7. Take action and implement.

8. Review the decision.

Techniques of Decision Making

• SWOT analysis, decision trees, cost/benefit analysis, and others.

Organizing and Organization

2.3.1 Concept of Organizing

• Combines resources and establishes relations to achieve goals.

Importance of Organizing

• Improves resource utilization and efficiency.

• Defines work relationships and promotes better communication.

Types of Organisation Structures

• Line: Simplest form with clear command chain.

• Functional: Based on specialization.

• Matrix: Combination of functional and project-based teams.

Span of Control

• Refers to the number of subordinates a manager can effectively supervise.

• Narrow vs. Wide: Impacts costs, efficiency, and managerial relationships.

Conclusion

• Planning and decision-making are integral to management success.

• Organizing structures facilitate effective communication and reach of goals.