CHAPTER 1: INTRODUCTION TO
MANAGEMENT
Management
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-
-
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it is the process of reaching goals
through the use of human resources,
technology, and material resources.
involves communication and
interpersonal skills, plus the abilities
to plan, organize, supervise, and
solve problems
Good management is working
through others to accomplish tasks
that help fulfill organizational
objectives as efficiently as possible.
A position in management is one of
the greatest challenges any employee
can face.
ELEMENTS OF DEFINITION
PROCESS
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The theory of scientific management
–
Using methods to define the “one
best way” for a job to be done:
–
Putting the right person on
the job with the correct tools
and equipment
–
Having a standardized
method of doing job
–
Providing an economic
incentive to the worker
Taylor was focused with achieving efficiency
through the quickness of a task being done,
the scientific tool he is often associated with
being the stopwatch.
Taylor’s Principles
represents on-going functions or
primary objectives engaged in by
managers.
refers to the activities being
performed to achieve an objective.
EFFECTIVENESS
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"Father" of the Scientific management (1911)
& Efficiency Movement, Father of Industrial
Engineering
completing activities so that
organizational goals are attained
o
Doings the right things
o
Concerned with ends
o
Achieving the objectives on
time
EFFICIENCY – getting the most output
from the least amount of inputs
o
Doing things right
o
Concerned with means
o
Achieving the objectives in
time
SCIENTIFIC MANAGEMENT
FREDERICK WINSLOW TAYLOR
1. Develop a science for each element
of an individual’s work, which will
replace the old rule-of-thumb
method.
2. Scientifically select and then train,
teach, and develop the worker.
3. Heartily cooperate with the workers
so as to ensure that all work is done
in accordance with the principles of
the science that has been developed.
4. Divide work and responsibility
almost equally between
management and workers.
Management takes over all work for
which it is better fitted than the
workers.
FRANK & LILIAN GILBRETH (Therbligs)
Founders of Modern Industrial Management
–
Focused on increasing worker
productivity through the reduction of
wasted motion
–
Developed the micro chronometer to
time worker motions and optimize
work performance
–
The Gilbreth’s on the other hand were
more focused on reducing the
number of motions needed to
achieve a goal or task. They did use
the stopwatch, but they were more
interested in finding ways to reduce
motion and were more concerned
with the well-being of the worker.
HENRY GANTT
Project Management Guru
–
His most popular legacy to
management was the Gantt Chart.
Gantt Chart - accepted as a commonplace
project management tool today, it was an
innovation of worldwide importance in the
1920s.
How Do Today’s Managers Use Scientific
Management?
➢ Use time and motion studies
to increase productivity
➢ Hire the best qualified
employees
➢ Design incentive systems
based on output
GENERAL ADMINISTRATIVE THEORIES
HENRY FAYOL
Father of Administrative Management
•
Believed that the practice of
management was distinct from other
organizational functions
•
Developed principles of management
that applied to all organizational
situations
•
He synthesized the 14 principles of
management serve as a guideline for
decision-making and management
actions. They are drawn up by means
of observations and analyses of
events that managers encounter in
practice.
•
FAYOL’s 14 PRINCIPLES OF
MANAGEMENT
1. DIVISION OF LABOR – work of all kinds
must be divided & subdivided and
allotted to various persons according to
their expertise in a particular area
2. AUTHORITY & RESPONSIBILITY management has the authority to give
orders to the employees. Of course, with
this authority comes responsibility.
3. DISCIPLINE - about obedience. It is
often a part of the core values of a
mission and vision in the form of good
conduct and respectful interactions.
4. UNITY OF COMMAND - an individual
employee should receive orders from one
manager and that the employee is
answerable to that manager. If tasks and
related responsibilities are given to the
employee by more than one manager, this
may lead to confusion which may lead to
possible conflicts for employees.
5. UNITY OF DIRECTION – all about focus
and unity. All employees deliver their
activities that can be linked to the same
objectives. These activities must be
described in a plan of action.
6. SUBORDINATION OF INDIVIDUAL
INTEREST – personal interests are
subordinate to the interests of the
organization. The primary focus is on the
organizational objectives and not on
those of the individual.
7. RENUMERATION - the compensation
should be sufficient to keep employees
motivated and productive. There are two
types of remuneration namely nonmonetary (a compliment, more
responsibilities, credits) and monetary
(compensation, bonus or other financial
compensation).
8. DEGREE OF CENTRALIZATION - an
organization should strive for a good
balance in the degree of centralization
(concentrated at the top management)
and decentralization (sharing the
authority with lower management) in
terms of decision making.
9. SCALAR CHAIN - there should be a clear
line in the area of authority (from top to
bottom and all managers at all levels). This
can be seen as a type of management
structure.
10. ORDER – employees in an organization
must have the right resources at their
disposal so that they can function
properly in an organization. In addition,
the work environment must be safe,
clean and tidy.
11. EQUITY - employees must be treated
kindly and equally.
12. STABILITY OF TENURE OF PERSONNEL
- minimize employee turnover and to
have the right staff in the right place.
Focus areas such as frequent change of
position and sufficient development must
be managed well.
13. INITIATIVE - encourages interest and
involvement and creates added value for
the company.
14. ESPRIT DE CORPS - stands for striving
for the involvement and unity of the
employees. Esprit de corps contributes to
the development of the culture and
creates an atmosphere of mutual trust
and understanding.
4M’s of MANAGEMENT
MATERIALS – inventory control, storage &
handling procedures.
MANPOWER – recruitment, selection,
training, promotion and grievances handling
of personnel.
MACHINERY – selection of appropriate
machine, allocation and maintenance.
MONEY – budget allocation
THE MANAGER
•
A Manager is someone whose primary
responsibility is to carry out the
management process within the
organization to achieve the
organizational goals.
MANAGERIAL SKILLS:
Primary Skills – conceptual, technical, human
skill
1. Conceptual Skills – mental
capacity to develop plans,
strategies and vision
2. Technical Skills – use
knowledge or techniques of a
particular discipline to attain
ends
3. Human/Interpersonal Skills –
ability to work with other
people in team.
Top management job titles include:
1. Chief Executive Officer
2. President
3. Vice President
Middle Management
•
These managers implement the
decisions of top management.
•
They are the link between the top and
supervisory levels of management.
Secondary Skills – design, communication,
leadership skill
1. Design Skills – ability to
handle and solve any kind of
unforeseen or actual
problems, that may crop up in
the organization.
2. Communication Skills – ability
to exchange ideas and
information effectively. To
understand others and be
understood by others
comprehensively.
3. Leadership Skills – ability to
influence other people to
achieve the common goal.
LEVELS OF MANAGEMENT
Top Management
These are people who make planning
decisions that affect the whole company.
They are the persons with greatest
responsibility.
Supervisory-Level Management
They supervise the activities of employees
who carry out the tasks determined by the
plans of middle and top management.
They assign duties and evaluate the work of
production or service employees.
Management that interacts directly with
employees on the job.
•
Facing new challenges
ELEMENTS OF DECISION MAKING
•
A set of possible future conditions
exists that will have a bearing on the
results of the decision. e.g. Low or
High Demand, Rainy or Hot Weather
•
A list of alternatives for the manager
to choose from e.g Expand or Do
nothing, Indoor or Outdoor
•
A known payoff / outcome for each
alternative under each possible future
condition e.g $50M Profit, $20M Loss,
Successful Event, Unsuccessful Event
CHAPTER 2: DECISION MAKING
Decision-making
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is the action of selecting one
alternative from a set of several
alternatives.
process by which managers respond
to opportunities and threats by
analyzing options, and making
decisions about goals and courses of
action
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•
•
Decisions in response to opportunities:
managers respond to ways to improve
organizational performance.
Decisions in response to threats: occurs
when managers are impacted by adverse
events to the organization.
Decision is a conclusion or resolution reached
after consideration of alternatives
PAYOFF TABLE – table showing the expected
payoffs for each alternative in every possible
state of nature. Theses tables are helpful in
choosing among alternatives because they
facilitate comparisons.
DECISION MAKING ENVIRONMENTS
1. Certainty – means that relevant
parameters such as costs, capacity,
and demand have known values
2. Uncertainty – environment in which it
is impossible to assess the likelihood
of various future events.
3. Risk – means that certain parameters
have probabilistic outcomes.
Decision criteria are principles, guidelines or
requirements that are used to make a
decision
THE DECISION-MAKING PROCESS
IMPORTANCE of GOOD DECISION-MAKING
1. Recognize the need to make a decision
Good decision-making is important for the
following reasons:
2. Determine decision criteria
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Achievement of objectives
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Optimum use of resources
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Higher efficiency
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Innovation
•
Motivation
•
Growth and expansion
3. Identify alternatives
4. Evaluate alternatives
5. Select best alternative
6. Implement chosen alternative
7. Follow-up and evaluate results
CAUSES OF POOR DECISIONS
1. Mistakes in Decision Process
2. Bounded rationality - limitations in
decision making caused by costs,
human abilities, time, technology, and
availability of information
fix what is best, after reviewing all
possible options then evaluating
every option using logic and
rationality.
3. Sub-optimization - result of different
departments each attempting to
reach a solution that is optimum for
that department
3. BEING WELL-INFORMED - more than
finding the fact and logic of a decision,
getting a personal opinion also
impacts your decision-making by
giving you the confidence and
assurance that you’re taking the right
decision.
EVALUATING ALTERNATIVES
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Is it LEGAL? Managers must first be
sure that an alternative is legal both in
this country and abroad for exports.
•
Is it ETHICAL? The alternative must be
ethical and not hurt stakeholders
unnecessarily.
•
Is it ECONOMICALLY FEASIBLE? Can
our organization’s performance goals
sustain this alternative?
•
Is it PRACTICAL? Does the
management have the capabilities
and resources to do it?
DECISION MAKING SKILLS
1. BEING INTUITIVE - simplest, and the
one of the most common ways to take
a decision. Though it is not always the
best.
Intuitive decision making includes that you
have to rely on the decision that you feel
appropriate, without much thinking about the
logic that makes you take the choice
4. SATISFICING - accepting the one
which is satisfactory for the benefit of
the company. A nonworkplace
example is deciding that you need
coffee, and then visiting the nearest
coffee shop even though it’s not the
best. Simply because you need it. This
says you might miss upon the best
options.
5. CONFLICT MANAGEMENT - identify
the differences between a win-lose
situation (compromises where one
side sacrifices what they want to
please one another) and win-win
situations.
TYPES OF DECISIONS
1. Programmed and Non-Programmed
Decisions
CONS OF USING INTUITION:
1. Flawed information
2. Short-term emotional bias
3. Insufficient consideration of others
4. Prejudices
5. Lack of openness
2. BEING RATIONAL - decision making
type which most people want to
believe they do. It is the use of logic to
2. Strategic, Tactical, and Operational
Decisions
•
Techniques managers can use in the
creative decision-making process
include:
✓ Brainstorming, a collaborative effort
where members suggest many ideas
together.
Behavioral Aspects of Decision Making
I. Bounded Rationality Model of Decision
Making
•
The rationality of decision makers is
restricted by the actual information
they have, the cognitive biases of
their psyches, and the limited time
they have to decide.
•
Decisions are rational only within the
boundaries of the decision maker’s
mental ability, values, perceptions and
skills.
•
Under this model, managers satisfice
•
A manager accepts the first
alternative that is “good enough” in
order to save effort and time.
II. Intuitive Model of Decision Making
•
Intuition is a cognitive means of
decision making that relies on the
decision maker’s instinct, experience,
and knowledge.
•
It involves making choices without
cognizant thinking.
•
When making a decision, intuitive
managers tend to screen the decision
situation to identify mental patterns.
•
These mental patterns are usually a
result of knowledge, practice, and
familiarity, and allows managers to
know the potential outcomes of their
decision.
III. Creative Model of Decision Making
•
Creativity is the invention of
imaginative new ideas.
✓ Wild storming, where a group works
on seemingly impossible ideas and
suggests how these ideas can be
made possible.
✓ Pre-mortem, a method of imagining
and preventing possible issues that
could arise
Risk Propensity and Decision Making
•
Risk propensity measures the
tendency of decision makers to make
risky decisions.
•
Managers with low risk propensity are
more cautious and conservative when
making decisions, and so are likely to
avoid mistakes that result in huge
losses.
•
Managers with high-risk propensity
are more aggressive, and hasty in
their decision making, relying heavily
on intuition to make decisions that
may involve big investments.
Ethics and Decision Making
•
Ethical decision-making issues
emerge when decision
alternatives include conflicting moral
or ethical considerations.
•
Managers must be able to thoroughly
and sensibly consider the outcomes
and ethical ramifications of an
alternative before implementing it as
a decision.
Challenges in Decision Making
Overconfidence Bias
•
Decision makers overestimate their
capability to foresee future events.
•
Can lead to risky behavior and faulty
decision making.
Hindsight Bias
•
•
THE NATURE OF PLANNING
A PLAN,
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which is the output of planning
provides a methodical way of
achieving desired results.
serves as a useful guide in the
implementation of activities
Individuals look back and view events
as more predictable than they really
are.
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Managers may project this bias onto
others when something goes wrong.
PLANNING
Anchoring
•
The tendency for decision makers to
rely too much on one piece of
information.
•
May result in lost opportunities or
faulty decisions
Framing Bias
•
The way a situation is presented has a
strong influence on decision makers.
•
May lead to poor decisions simply
based on how a problem is framed.
-
-
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is the management function that
involves anticipating future trends
and determining the best strategies
and tactics achieve organizational
objectives
selection and sequential ordering of
to required to achieve an
organizational goal.
is deciding what will be done, who
will do it, where, when and how it will
be done
PLANNING AT VARIOUS MANAGEMENT
LEVELS
Escalation of Commitment
Top Management Level – strategic planning
•
People proceed on a failing course of
action because they already invested
in it.
•
Managers fear admitting their mistake
or believe they can recover their
losses.
STRATEGIC PLANNING - refers to the process
of determining major goals of the
organization and the policies and strategies
for obtaining and using resources achieving
these goals
Groupthink
•
Members of a group put pressure on
each other to conform and reach
consensus, thereby increasing the risk
of flawed decisions.
•
Reduces mental efficiency, reality
testing, and moral judgment in
making decisions.
CHAPTER 3: FUNCTIONS OF MANAGEMENT
A. PLANNING
STRATEGIC PLANNING – Major Key
Components:
A. Vision and Mission Statements:
Articulating the organization's purpose
(mission) and desired future state (vision).
These serve as foundational elements that
guide the planning process.
B. Environmental Analysis: Conducting
assessments of internal and external factors
that can affect the organization, often utilizing
tools like SWOT analysis (Strengths,
Weaknesses, Opportunities, Threats) to
identify key factors.
C. Setting Goals and Objectives: Establishing
specific, measurable goals and objectives that
align with the organization’s vision and
mission.
D. Strategy Formulation: Developing the
overall strategy or strategies to achieve the
defined goals, which may include market
positioning, competitive advantage, resource
allocation, and operational plans.
E. Action Plans: Creating detailed action plans
or initiatives that outline the steps needed to
implement the strategies, including timelines,
responsibilities, and resource allocation.
F. Monitoring and Evaluation: Establishing
metrics and processes for tracking progress
toward goals and evaluating the effectiveness
of the strategies, allowing for adjustments as
necessary.
G. Stakeholder Engagement: Involving key
stakeholders (employees, customers,
investors, etc.) in the planning process to
ensure alignment and buy-in.
Middle Management Level – intermediate
planning
INTERMEDIATE PLANNING - refers to the
process of determining the contributions that
subunits can make with allocated resources.
-
-
refers to the process of developing
plans that bridge the gap between
long-term strategic plans and shortterm operational plans.
typically covers a timeframe of one to
three years and focuses on specific
objectives and actions that are aligned
with the broader goals set in the
strategic planning phase.
Key characteristics and components of
intermediate planning include:
A. Time Frame: Intermediate plans usually
span one to three years, making them
more focused and actionable than longterm strategic plans while still being
broader in scope than day-to-day
operational plans.
B. Goals and Objectives: These plans
translate the overarching strategic goals
into specific, measurable objectives that
can be pursued over the intermediate
time frame.
C. Resource Allocation: Intermediate
planning involves determining the
resources (financial, human,
technological, etc.) required to achieve
the specified objectives.
D. Action Plans: Details how the
organization will achieve the defined goals
and objectives. This includes assigning
responsibilities, setting timelines, and
outlining the necessary steps.
E. Performance Measures: Establishing
criteria and metrics to evaluate progress
towards the objectives set out in the
intermediate plan.
F. Flexibility and Adaptability: Given that
intermediate plans often respond to
changing conditions in the business
environment, they must allow for
adjustments based on performance
metrics and external factors.
G. Integration with Other Planning
Levels: It connects long-term strategic
objectives with short-term operational
goals, ensuring that immediate actions are
working towards the larger vision of the
organization.
Lower Management Level – operational
planning
OPERATIONAL PLANNING - refers to the
process of determining how specific tasks can
be best accomplished on time with available
resources.
-
Unlike strategic or intermediate
planning, which focus on broader
goals and longer time frames,
operational planning is highly focused
on the implementation of tasks that
directly support the organization's
ongoing operations, usually over a
time frame of one year or less.
Key Characteristics of Operational Planning:
A. Short Time Frame: Operational plans
typically cover a period of up to one year and
are often broken down into monthly, weekly,
or even daily activities.
Immediate Focus: Helps organizations
respond quickly to changes and challenges,
keeping teams focused on short-term results
that contribute to longer-term goals.
Performance Improvement: By monitoring
performance against established metrics,
organizations can identify areas for
improvement and make data-driven decisions
B. Specific Goals and Objectives: These plans
translate the broader goals from strategic and
intermediate planning into clear, actionable
objectives. They focus on specific outcomes
that need to be achieved in the short term.
C. Detailed Action Steps: Operational plans
outline the specific tasks, processes, and
procedures needed to achieve the objectives.
This includes assigning responsibilities to
individual employees or teams.
D. Resource Allocation: Identifying and
allocating resources—such as personnel,
budget, and equipment—needed to execute
the planned activities effectively.
E. Performance Metrics: Establishing criteria
to measure the success of the operational
plan. This includes defining KPIs (Key
Performance Indicators) and other metrics to
monitor progress and effectiveness.
F. Monitoring and Adjusting: Operational
planning involves regular assessment of
activities to ensure adherence to the plan and
the ability to adjust as necessary based on
performance and changing circumstances.
G. Coordination Across Departments:
Ensuring that various departments or teams
within the organization are aligned and
coordinating their efforts towards common
operational goals
Importance of Operational Planning:
Efficiency: Helps streamline processes and
ensures that resources are used effectively.
Clarity: Provides clear guidance to employees
on their roles and responsibilities, enhancing
accountability and transparency.
THE PLANNING PROCESS
Planning involves the following:
❑ setting organizational, divisional, or unit
goals
❑ developing strategies or tactics to reach
those goals
❑ determining resources needed
❑ setting standards
SETTING GOALS
❑ providing a sense of direction to firm, its
division and/or unit.
❑ GOALS may be defined as “the precise
statement of results sought, quantified in time
and magnitude, where possible.”
❑ Here’s a structured approach to setting
effective goals at these levels:
1. Align with Organizational Vision and
Mission • Understand the Purpose: Ensure
that all goals support the organization’s longterm vision and mission.
• Involve Leadership: Collaboration with
executive leadership can provide guidance on
strategic priorities.
2. Analyze the Current State
• SWOT Analysis: Assess strengths,
weaknesses, opportunities, and threats to
understand the context in which goals will be
set.
• Performance Metrics: Review existing
performance data to identify areas needing
focus or improvement
3. Set SMART Goals
Follow the SMART criteria, just like individual
goal-setting, to ensure that organizational,
divisional, or unit goals are:
• Specific: Clearly define the goal and its
scope.
• Measurable: Identify key performance
indicators (KPIs) to measure success.
• Achievable: Ensure the goal is realistic based
on available resources and constraints.
• Relevant: Goals should align with broader
organizational objectives and the divisional or
unit mission.
• Time-bound: Establish a clear timeframe for
achieving each goal
4. Involve Stakeholders
• Engagement: Include input from various
stakeholders in the goal-setting process to
increase buy-in and ensure diverse
perspectives.
• Collaboration: Encourage teamwork in
formulating and refining goals, fostering a
sense of ownership
5. Develop an Action Plan
• Outline Key Initiatives: Identify the specific
initiatives or projects that will drive progress
toward each goal.
• Assign Responsibilities: Clearly define who
is responsible for each initiative and set
accountability measures.
• Allocate Resources: Ensure the necessary
resources (time, budget, personnel) are
allocated to support goal achievement
6. Monitor and Measure Progress
• Regular Review: Establish a schedule for
regular check-ins to assess progress toward
the goals (monthly, quarterly, etc.).
• Adjust as Needed: Be prepared to modify
goals or action plans based on performance,
feedback, or changes in the business
environment
7. Communicate Goals Clearly
• Transparency: Make sure all relevant
stakeholders understand the goals and their
importance.
• Updates: Regularly communicate progress
and any changes to keep everyone informed
and engaged.
8. Foster a Supportive Culture
• Encourage Collaboration: Create an
environment where teams can work together
and share best practices.
• Recognize Achievements: Celebrate
milestones and successes to boost morale and
motivation.
9. Reflect and Adapt
• Post-Implementation Review: After
reaching the goals or the completion of a
related project, conduct a review to
determine what worked, what didn’t, and
why.
• Learn and Evolve: Use insights gained to
inform future goal-setting cycles at all levels of
the organization.
DEVELOPING STRATEGIES OR TACTICS
After determining the goals, the next step is to
devise some means to realize them.
❑ A STRATEGY may be defined as “the plan of
action that seeks to achieve an overall goal.”
In simple terms, a strategy shows what one is
trying to accomplish as a company and can be
considered as the general direction that one
intends to take with the goal.
❑ A TACTIC follows after the strategy is
defined. Tactic defines how the business is
going to prioritize different steps in carrying
out a specific strategy. Tactics are the specific
actions that will be taken in implementing the
strategy.
Basis on Scheduling & Prioritizing Activities
1. Pre-requisites – if other activities are only
possible to get started once the previous or
precedent activity is already implemented.
2. Degree of Importance – the effect or
outcome of the activity once executed
3. Deadline – activity with the nearest
deadline comes first
4. Availability of Interested Parties – if the
activity is cross-functional and completion is
not possible without the presence of the
interested parties, determining the schedule
that will fit each of the interested possible,
availability is necessary.
5. Availability of Resources– if material
availability is a constraint, re sequencing of
activities, if possible, can be considered.
DETERMINING RESOURCES NEEDED
Resources can generally be classified into
several categories:
❑Technological Resources (software or
systems
❑Material Resources (physical items needed,
such as tools, equipment, or supplies.)
❑Financial Resources (estimate the budget
required for the project, including costs for
labor, materials, equipment, and overhead).
❑Human Resources (determine the types of
skills and expertise needed (e.g., project
managers, engineers, designers).
❑Time Resources (deadlines, project
duration)
SETTING STANDARDS
❑ When actual performance does not match
with the planned performance, corrections
may be made or reinforcements given
❑A STANDARD may be defined as “a
quantitative or qualitative measuring device
designed to help monitor the performances
of the people, capital goods, or processes”
❑Examples of Standards
• Basic Standards - fundamental standards for
weights and measures.
• Product Specification Standards - standards
for the physical, chemical, electrical, technical
and mechanical characteristics of products
and materials
When the particular sets of strategies or
tactics have been devised, the engineer
manager will determine the human and nonhuman resources required by such strategies
or tactics
• Process Standards - series of actions or
operations used in making a product and
provide the methodology to perform these
processes in a consistent way.
❑ The quality and quantity of resources
needed must be correctly determined.
• Code of Conduct - collections of mandatory
standards that have been codified by
government authorities and become law.
❑ Too much resources in terms of either
quality or quantity will be wasteful. Too little
will mean loss of opportunities for maximizing
income.
• Management System Standards requirements that can be applied to any
organization, regardless of the product it
makes or the service it performs (Ex. ISO 9001,
ISO 14001, OSH, Energy Mgt., Information
Security Management, TQM, Lean Mgt.)
TYPES OF PLANS
CLASSIFICATIONS:
1. Functional Areas
2. Time Horizon
❑ LONG-RANGE PLANS - plans covering a
time span of more than 1 year (top and
middle management levels)
3. PLANS ACCORDING TO FREQUENCY OF USE
❑ STANDING PLANS – plans that are used
again and again, and they focus on managerial
situations that recur repeatedly.
1. FUNCTIONAL AREA PLANS
• POLICIES – broad guidelines to aid managers
at every level in making decisions about
recurring situations or function.
❑ Marketing plan – plan for marketing
activities related to a particular marketing
strategy.
• PROCEDURES – plans that describe the exact
series of actions to be taken in a given
situation.
❑ Production plan - states the quantity of
output of a company must produce in broad
terms and by product family.
• RULES – they are statements that either
require or forbid a certain action
3. Frequency of Use
❑ Financial Plan - summarizes the current
financial situation of the firm, analyses
financial needs, and recommends direction for
financial activities.
❑ Human Resource Management Plan detailed human resource requirements in
terms of quantity and quality based on the
requirements of the company’s strategic plan.
The Contents of a Marketing Plan
• The Executive Summary
• Table of Contents
❑SINGLE-USE PLANS - plans are specifically
developed to implement courses of action
that are relatively unique and are unlikely to
be repeated.
• BUDGETS – plan which sets forth the
projected expenditure for a certain activity
and explains where the required funds will
come from.
• PROGRAMS – designed to coordinate a
large set of activities. Example: Audit Plan
• PROJECTS – usually more limited in scope
than a program and is sometimes prepared to
support a program.
• Situational Analysis and Target Market
• Marketing Objectives and Goals
MAKING PLANNING EFFECTIVE
• Marketing Strategies
Planning may be made successful if the
following are observed:
• Marketing Tactics
• Schedules and Budgets
• Financial Data and Control
2. PLANS WITH TIME HORIZON
❑ SHORT-RANGE PLANS – plans intended to
cover a period of less than 1 year (lower
management level)
❑ Recognize the planning barriers PLANNING
BARRIERS
• manager’s inability to plan
• improper planning process
• improper information
• lack of commitment to the planning process
• concentrating on only the controllable
variables
Causes of Inability to Plan
1. Lack of Clear Objectives:
Description: When managers do not have a
clear understanding of organizational goals or
the specific objectives of their team, it
becomes difficult to create meaningful plans.
Solution: Establish well-defined, measurable
objectives aligned with the organization’s
vision. Regularly communicate these
objectives to the team.
2. Poor Time Management:
Description: Managers may be overwhelmed
by daily tasks and urgent issues, which can
lead to neglecting long-term planning.
Solution: Prioritize tasks using tools like the
Eisenhower Matrix. Set aside dedicated time
for planning in the manager's schedule.
3. Inadequate Information and Data:
Description: Decisions based on incomplete or
inaccurate information can hinder effective
planning.
Solution: Implement systems for gathering
and analyzing relevant data to inform decision
making processes. Ensure that managers have
access to necessary resources.
4. Resistance to Change:
Description: Managers who are hesitant to
embrace new ideas or methodologies may
struggle to adapt their plans in a changing
environment.
Solution: Encourage a culture of flexibility and
innovation. Provide training to help managers
understand the importance of adaptive
planning.
5. Limited Skills and Experience:
Description: Some managers may lack the
knowledge or skills required to develop
effective plans.
Solution: Offer training and development
opportunities focused on strategic planning,
project management, and problem-solving
skills.
6. Over-Reliance on Intuition:
Description: Managers who rely too heavily on
instinct rather than data-driven analysis may
encounter flawed planning outcomes.
Solution: Encourage evidence-based decisionmaking and incorporate analytical tools in the
planning process
7. Fear of Accountability:
Description: Some managers may hesitate to
commit to a plan, fearing blame for any
failures or unexpected outcomes.
Solution: Foster an organizational culture that
emphasizes learning from mistakes and
collaborative problem-solving rather than
assigning blame.
8. Poor Communication:
Description: Ineffective communication within
the team can lead to misunderstandings and
misalignment of goals.
Solution: Establish clear communication
channels and conduct regular check-ins to
ensure everyone is aligned with the planning
objectives.
Key Elements of an Improper Planning
1. Undefined Objectives:
Description: Lack of clearly defined goals or
objectives can lead to confusion about
direction and priorities.
Consequences: Teams may waste time and
resources on irrelevant tasks, leading to
missed deadlines and unmet expectations.
2. Inadequate Research and Analysis:
Description: Failing to gather relevant data
and perform thorough analysis can result in
uninformed decision-making.
Description: Creating overly intricate or
complicated plans can confuse team members
and lead to implementation challenges.
Consequences: Plans based on inaccurate or
incomplete information may lead to
ineffective strategies and poor outcomes.
Consequences: Complexity can hinder
execution and lead to misunderstandings
about roles and responsibilities.
3. Ignoring Stakeholder Input:
8. Failure to Conduct a Risk Assessment:
Description: Excluding input from key
stakeholders (e.g., team members, clients, or
other departments) can lead to a lack of buyin and support.
Description: Not identifying potential risks and
mitigation strategies can lead to
unpreparedness when issues arise.
Consequences: Resistance to the plan can
arise, resulting in low morale and
disengagement from team members who feel
their insights are undervalued.
4. Lack of Flexibility:
Description: A rigid planning process that does
not allow for adjustments in response to
changing circumstances can lead to
obsolescence.
Consequences: Unexpected challenges can
derail plans, resulting in crises that could have
been mitigated or avoided.
Causes of Lack of Information
1. Inadequate Data Collection Methods:
Organizations may lack effective systems for
gathering necessary data, such as surveys,
interviews, or market research tools.
2. Limited Access to Tools and Technologies:
Consequences: Plans may become irrelevant
in rapidly changing environments, causing
missed opportunities and inefficiencies.
Teams may not have access to analytics tools
or databases that can provide relevant
information.
5. Poor Resource Allocation:
3. Poor Communication Channels:
Description: Failing to identify and allocate the
necessary resources (time, money, personnel)
can undermine the execution of the plan.
Inefficient or unclear communication
processes can prevent vital information from
being shared among team members.
Consequences: Projects may stall or fail due to
insufficient support, causing delays and
budget overruns.
4. Outdated Information:
6. Weak Monitoring and Control:
Description: Not establishing metrics or
mechanisms for tracking progress can lead to
a lack of accountability.
Consequences: Without oversight, teams may
deviate from the plan without realizing it,
ultimately failing to meet objectives.
7. Overly Complex Plans:
Relying on old or irrelevant data can lead to
confusion and misinformed strategies.
5. Lack of Expertise:
Insufficient skills or knowledge about
information analysis can impede the ability to
extract useful insights from available data.
6. Cultural Barriers:
A culture that discourages open
communication and sharing can lead to
valuable insights being withheld or ignored.
7. Resource Constraints:
Budget constraints may limit the
organization’s ability to invest in necessary
market research or information-gathering
efforts.
Causes of Lack of Commitment to the
Planning Process
1. Poor Leadership: When leaders do not
prioritize planning or demonstrate a lack of
support for the process, team members may
feel undervalued and less inclined to commit.
2. Insufficient Involvement: If team members
are not involved in the planning process or do
not understand their roles in it, they may lack
ownership over the outcomes.
3. Unclear Objectives: A lack of clarity
regarding goals can leave team members
uncertain about what is expected, reducing
their motivation to engage fully in the
planning.
4. Cultural Factors: An organizational culture
that does not emphasize planning or views it
as a bureaucratic exercise may lead to
disengagement from the process.
2. Enhanced Efficiency: Organizations can
allocate time and resources more efficiently
when prioritizing what they can influence,
leading to quicker decision-making and
implementation.
3. Reduced Stress and Anxiety: Focusing on
controllable variables can mitigate feelings of
helplessness and frustration that often arise
from grappling with uncertainties.
4. Improved Accountability: When teams
concentrate on controllable factors, it
becomes easier to assign responsibility and
hold individuals accountable for achieving
specific outcomes.
5. More Effective Risk Management:
Organizations can develop contingency plans
and strategies to mitigate risks associated with
controllable variables, leading to better
preparedness
Drawbacks of Ignoring Uncontrollable
Variables
5. Previous Failures: Past failed planning
efforts can create skepticism about the value
of planning, causing team members to
disengage or resist future planning initiatives.
1. Limited Perspective: Overlooking
uncontrollable variables can lead to a narrow
view, preventing teams from recognizing
potential opportunities or threats in the
external environment.
6. Competing Priorities: When team members
have numerous responsibilities and deadlines,
planning may take a backseat, leading to a
lack of focus on the planning process.
2. Poor Adaptability: An inability to respond
to external changes may hinder an
organization’s agility, making it difficult to
pivot when unexpected challenges arise.
7. Absence of Rewards: If employees do not
see the benefits or rewards of their
commitment to the planning process, their
motivation to participate may decrease.
3. Neglect of Strategic Insights: Ignoring
factors that cannot be controlled may lead to
the loss of valuable insights that could inform
better decision-making and planning.
Benefits of Focusing on Controllable
Variables
1. Increased Clarity and Focus: By zeroing in
on factors that can be managed, teams can
concentrate their efforts and resources
effectively, reducing ambiguity.
4. Misallocation of Resources: Focusing too
heavily on controllable variables can result in
underestimating the need for resources aimed
at monitoring or analyzing external factors.
5. Resistance to Change: Organizations that
concentrate only on the controllable may
become resistant to change, making it difficult
to innovate or evolve in response to new
trends.
Planning may be made successful if the
following are observed:
❑Use of aids to planning
• Gather as much information as possible
• Develop multiple sources of information
• Involve others in the planning process