M A N A G E M E N T F U N D A M E N T A L S P L A N N I N G & O R G A N I S I N G G R A D U A T E D I P L O M A I N M A N A G E M E N T
S T R A T E G I C & O P E R A T I O N A L P L A N N I N G
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.
LEVELS OF GOALS
BENEFITS OF GOALS AND PLANS Legitimacy Source of motivation and commitment Resource allocation Guides to action Rationale for decisions Standards of performance
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 Ford Motor Company We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. BMS is committed to creating an intellectually stimulating learning environment through inspirational teaching and research within an inclusive academic culture that benefits the learner, community, country, and the region.
AREAS TO BE ADDRESSED IN AN EFFECTIVE MISSION 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
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.
CRITERIA FOR EFFECTIVE GOAL SETTING Specific and measurable Defined time period Cover key result areas Choice and clarity Challenging but realistic Linked to rewards
PLANNING APPROACHES Management by Objectives (MBO) Single use plans Standing plans Contingency plans
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.
MBO BENEFITS & CHALLENGES BENEFITS 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 CHALLENGES 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.
02. SINGLE USE PLANS Single use plans are developed to achieve a set of goals that are not likely to be 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
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
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.
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. Where are we now? Where do we want to be? How will we get there?
LEVELS OF STRATEGY Corporate-Level Strategy The level of strategy concerned with the question, What business are we in? Pertains to the organisation as a whole and the combination of business units and product lines that make it up. Business-Level Strategy The level of strategy concerned with the question, How do we compete? Pertains to each 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.
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
F U N D A M E N T A L S O F O R G A N I S I N G
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.
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
ORGANISATIONAL STRUCTURE Organizational structure is the formal arrangement of jobs within an organisation.
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
ORGANISATIONAL DESIGN A process that involves decisions about six key elements Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization
01 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.
02 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.
03 THE SPAN OF CONTROL The span of control is the number of subordinates reporting directly to the person above them in the hierarchy.
TALL VS. FLAT ORGANISATIONAL STRUCTURE
TALL VS. FLAT ORGANISATIONAL STRUCTURE Characteristics of tall structure Characteristics of flat structure Many layers of management between lowest and highest levels Small span of control Close supervision Better communication Fewer levels in hierarchy Wider span of control Subordinates greater decision making authority Few management cost Greater employee motivation but less control Reduce delegation
04 CENTRALIZATION AND DECENTRALIZATION Centralization is when a relatively large number of decisions are taken by management at the top of the organization. Decentralization is when a relatively large number of decisions are taken lower down the organization in the operating units.
05 FORMALIZATION Formalization refers to how standardized an organization s jobs are and the extent to which employee behavior is guided by rules and procedures These include rules, procedures, instruction manuals, job descriptions (things which people must do)
06 DEPARTMENTALIZATION Process of grouping jobs together to ensure coordination of tasks in known as departmentalization. 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 DEPARTMENTALIZATION Basis for grouping positions into departments Choices regarding chain of command Traditional approaches: Vertical Functional Divisional Matrix Innovative approaches: Teams Virtual Networks
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
GEOGRAPHIC-BASED GLOBAL ORGANISATION STRUCTURE
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
DUAL-AUTHORITY STRUCTURE IN A MATRIX ORGANISATION
GLOBAL MATRIX STRUCTURE
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
NETWORK APPROACH
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
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
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
DELEGATION Is the process whereby superior gives subordinate authority over a defined area which falls within the scope of superior s authority.
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
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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