POM planning and decision making

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1.0 Learning Objectives

• Understand concepts related to:

  • Strategic Planning

  • Features of Planning

  • Steps in Planning Process

  • Importance of Planning

  • Advantages and Disadvantages of Planning

  • Principles of Planning

  • Approaches to Planning

  • Types of Plans

  • Management by Objectives

1.1 Introduction

• Prior knowledge of management basics from previous materials, such as:

  • Meaning and functions of management

  • Importance and skills of a manager

  • Classical and contemporary approaches to management

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1.2 Strategic Planning

• Example: Ranganathan and his innovative approach to marketing shampoos with cost-effective sachets.

• Key points from the case:

  • Identified market gap.

  • Creative marketing strategies boosted product sales.

  • Showcased potential for small firms to compete effectively.

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• Planning defined as:

  • Deciding in advance what to do, how, when, and by whom.

• Importance of foresight in management practices as highlighted by successful vs. unsuccessful planning approaches.

1.2.1 Meaning and Definition of Planning

• Planning involves:

  • Visualization of problems.

  • Making informed decisions before crises occur.

  • Creating structured forecasts and courses of action to achieve objectives.

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1.2.2 Features of Planning

• Key characteristics:

  • Goal-oriented: Achieves desired business objectives.

  • Looking ahead: Predictions and forecasts for the future.

  • Intellectual process: Requires judgment, imagination, analysis, and creativity.

  • Choice and decision-making: Involves selecting from alternatives.

  • Primacy of planning: Foundation for other management functions.

  • Continuous Process: Subject to re-evaluation and continuous adaptation.

  • All-pervasive: Necessary at all management levels.

  • Designed for Efficiency: Aims for cost-effective resource use.

  • Flexible: Can adapt to changes in society and market conditions.

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1.2.3 Steps in Planning Process

1. Establishment of Objectives:

   • Set clear, achievable goals that provide direction.

2. Establishment of Planning Premises:

   • Identify assumptions about future events affecting the planning process.

3. Choice of Alternative Courses of Action:

   • Evaluate different approaches and choose the best option.

4. Formulation of Derivative Plans:

   • Develop secondary action plans to support primary goals.

5. Securing Cooperation:

   • Involve stakeholders to get buy-in and insights.

6. Follow Up/Appraisal of Plans:

   • Analyze implementation success and make necessary adjustments.

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1.2.4 Importance of Planning

• Facilitates Management by Objectives:

  • Focus on achieving clear goals.

• Minimizes Uncertainties:

  • Anticipates potential challenges and reduces risks.

• Facilitates Coordination:

  • Ensures all organizational activities align with common goals.

• Improves Employee Morale:

  • Creates clarity and structure, boosting work focus and compliance.

• Achieves Economy:

  • Optimizes resource allocation and minimizes wastage.

• Facilitates Controlling:

  • Provides benchmarks for performance measurement.

• Provides Competitive Edge:

  • Allows proactive adaptations to market changes, enhancing market position.

• Encourages Innovations:

  • Promotes creative solutions and improvements.

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1.2.5 Advantages and Disadvantages of Planning

Advantages:

• Orders and rationalizes organizational actions.

• Promotes employee engagement and morale.

• Establishes benchmarks for performance comparisons.

Disadvantages:

• Can lead to inflexible administration.

• Time-consuming information collection process.

• May not be effective in crisis situations requiring swift decisions.

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1.2.6 Principles of Planning

1. Contribution to Objectives

2. Primacy of Planning

3. Pervasiveness of Planning

4. Flexibility

5. Periodicity

6. Planning Premises

7. Limiting Factor

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1.2.7 Approaches to Planning

1. Top-down Approach: Centralized authority in upper management.

2. Bottom-up Approach: Involves lower-level managers in planning.

3. Composite Approach: Integration of contributions from all levels.

4. Team Approach: Groups with expertise collaborate to formulate plans.

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1.2.8 Types of Plans

1. Hierarchical Plans: Strategic, administrative, operational plans.

2. Frequency of Use Plans: Standing plans (repetitive) and single-use plans.

3. Time Frame Plans: Short (hours to a year), medium (1-5 years), long-term (5+ years).

4. Organizational Scope Plans: Business, functional, tactical plans.

5. Contingency Plan: Alternative courses of action for unforeseen events.

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1.2.9 Management by Objectives (MBO)

• Introduced by Peter Drucker.

• Steps involved:

  1. Determine or revise organizational objectives.

  2. Translate objectives to employees.

  3. Stimulate participation in setting individual objectives.

  4. Monitor progress.

  5. Evaluate and reward progress.

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1.3 Let Us Sum Up

• Summary of concepts:

  • Planning as a proactive function of management.

  • Key characteristics include goal orientation, flexibility, and being a continuous process.

  • Steps and approaches to effectively establish plans highlighted.

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1.4 Answers to Check Your Progress

• Various answers summarized for review.

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1.5 Glossary

• Planning: Deciding in advance what actions to take to achieve goals.

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1.6 Assignment & Activities

• Additional assignments and cases for deeper understanding.

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Unit Structure 2.0 Learning Objectives

• Focus on decision making: its meaning, characteristics, process, guidelines, and types of decisions.

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2.1 Introduction

• Continuation from planning to decision-making.

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2.2 Decision-Making - Pepsi-Colas Dilemma

• As exemplified from a historical case of Pepsi's crisis management.

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2.2.1 Meaning of Decision-Making

• The cognitive process of selecting a course of action.

2.2.2 Characteristics of Decision-Making

• Decision-making is:

  • Goal-oriented

  • Based on alternatives

  • Analytical and dynamic

  • Continuous

  • A human and social process

  • Integral to planning

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2.2.3 The Decision-Making Process

1. Awareness of the problem

2. Diagnosis of the problem

3. Development of alternatives

4. Evaluation of alternatives

5. Selection of the best alternative

6. Implementation and verification of the decision

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2.2.4 Guidelines for Effective Decision Making

• Factors including adequate information, timeliness, and considering all views.

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2.2.5 Types of Decisions

• Various classifications including strategic, tactical, operational, major, minor, programmed, non-programmed, and more.

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2.3 Let Us Sum Up

• Summary of decision-making processes and key points reviewed.

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2.4 Answers to Check Your Progress

• Responses to questions for further reflection.