Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly said “Well plan is half done”. Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.According to Urwick, “Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses”.
Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.| According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur”. Steps in Planning Function
Establishment of objectives
Establishment of Planning Premises
Choice of alternative course of action
Formulation of derivative plans
Follow up/Appraisal of plans
Planning Importance in Management
Planning may be broadly defined as a concept of executive action that embodies the skill of anticipating, influencing, and controlling the nature and direction of change.
– McFarland Importance of Planning
Planning increases the organization’s ability to adapt to future eventualities
Planning helps crystallize objectives
Planning ensures a relatedness among decisions
Planning helps the company to remain more competitive in its industry
Adequate planning reduces unnecessary pressures of immediacy
reduces mistakes and oversights:
Planning ensures a more productive use of the organization’s resources Planning makes control easier
Planning enables the identification of future problems and makes it possible to provide for such contingencies Planning enables the identification of future problems and makes it possible to provide for such contingencies Planning increases the effectiveness of a manager
2.Evolution of Classical Approach to Management
Traditional process of learning is either through obsevation and experiment. Nature or environment is considered uniform and when we observe certain phenomenon or events uniformly leading to the same result or results, we conclude a cause and effect relationship between the two. This is learning by observation or in other words by experience. Earlier thinkers on management followed this approach in developing theories of management. Learning principally is through emphirical process and through analysis of the data collected through observation. Draw the principles of managment by looking at and anyalysing the jobs that all managers commonly do.
This approach served as a starting point for pioneers on management science to verify the validity and improve the applicability of the principles and practices of management. Analysis of observd data is what constitute a case study. The observational method of case study helps arriving at logical conclusions about past experience and to test the same as standards for future events. The German sociolists, Max Weber followed the classical approach and developed his theory of Bureaucracy, which portrays the structure anddesign of organisation charqacterised by a hierarchy of authority, formalised rules and regulations that serve to guide the coordinated functioning of an organization.
Basic Postulates of the Classical Approach by Max Weber
1. Management of an organization is considered as a chain of inter-related functions. The study of the scope and features of these functions, the sequence through which these are performed and their inter-relationship leads one to draw principles of management suitable for universal application 2. Learning principles of management is done through the past experiences of actual practicing managers 3. As business environment consists of uniform cycles exhibiting an underlying unity of realities, functions and principles of management derived through process of empirical reasoning are suitable for universal application 4. Emerging new managers through formal education and case study can develop skill and competency in management concepts and practices 5. The clasasical approach also recognised the importance of economic efficiency and formal organizational structure as guiding pillars of management effectigveness. 6. Business activity is based on economic benefit. Organizations should therefore control economic incentives Neoclassical theory of management
There are 3 neoclassical theories:
Human Relations theory :
Explains the modern advancement of Human Relations Management theory which takes into account human factors like the employer-employee relationship. Human relations theory is largely seen to have been born as a result of the Hawthorne experiments which Elton Mayo conducted at the Western Electrical Company. The important strand in the development of modern management was the increase in attention to the human factors, which has become known as the ‘human relations school of management.’
The core aspect of Human Relations Theory is that, when workers were being observed and included in the research, they felt more important and valued by the company. As a result, their productivity levels went up significantly. This represented a significant departure from many of the classical theories, particularly Fordism, as it went against the notion that management needed to control workers, and remove their autonomy at every step. Instead, it showed that by engaging with workers and considering their requirements and needs, company’s could benefit from increased productivity.
Behavioral theory :
The behavioral management theory is often called the human relations movement because it addresses the human dimension of work. Behavioral theorists believed that a better understanding of human behavior at work, such as motivation, conflict, expectations, and group dynamics, improved productivity. The theorists who contributed to this school viewed employees as individuals, resources, and assets to be developed and worked with — not as machines, as in the past. Several individuals and experiments contributed to this theory.
Social systems theory.:
Developed by Niklas Luhmann is an option for the theoretical foundation of Human Resource Management (HRM). After clarifying the advantages of using a grand (social) theory as the basic theoretical perspective, the roots of this social systems theory – the deterministic view of systems as machines, the open systems approach and non-linear systems theory – are addressed. Based on the view of social systems as autopoietically closed systems, five major contributions to a theoretical foundation of HRM are identified: (1) the conceptualisation of organising and managing human resources as social processes, thus overcoming an individualistic angle; (2) the new importance of individuals as essential element in the system’s environment; (3) the abstention form far reaching or highly unrealistic assumptions about the ‘nature’ of human beings; (4) the interaction between various levels and units of analysis built into the theory which is essential for comprehensive and in-depth analyses of HR phenomena and (5) the openness for additional theories for which social systems theory provides the overall framework.
Modern Management Theory
Management is one or the other form has existed in every nook and corner of the world since the dawn of civilization. Modern Management has grown with the growth of social-economics and scientific institution. Modern view consists that a worker does not work for only money. They work for their satisfaction and happiness with good living style. Here Non- financial award is most important factor.
Modern management theories started after 1950s. Modern management theory focuses the development of each factor of workers and organization. Modern management theory refers to emphasizing the use of systematic mathematical techniques in the system with analyzing and understanding the inter-relationship of management and workers in all aspect. It has following three Streams-
Quantitative approach also called Operation Research. Quantitative approach is a scientific method. It emphasizes the use of statistical model and systematic mathematical techniques to solving complex management problems. Its helps the management to making decisions in operations. It can only suggest the alternatives based on statistical data. It cannot take final decision.
It helps the management for improving their decision making by increasing the number of alternatives and giving faster decisions on any problem. Management can easily calculate the risk and benefit of various actions.
Major contributors in Quantitative Approach are-
George R. Terry
System approach was developed inlate1960s. Herbert A. Simon is the father of system theory. A System is defined as a set of regularly interacting or inter – dependent components that create as a whole unit. The system concept enables us to see the critical variables and constraints and their interactions with one another.
According to Cleland and King; “ A system is composed of related and dependent elements which when in interaction from a unity whole”.
Characteristics of system approach:
A system must have some specific components, units or sub units. A Change in one system affects the other subsystems.
Every system is influenced by super system.
All systems along their subsystem must have some common objectives. A system is a goal-oriented.
A system cannot survive in isolation.
Major contributors in system theories are-
Robert L. Khan,
Richard A. Johnson.
Contingency Approach also knows as situational approach. In 1980s, it is recognized as a key to effective management. This approach accepts the dynamics and complexities of the organization structure. An organization is affected by its environment and environment is composed by physical resources, climate, persons, culture, economic and market conditions and their laws. This approach argues that there is no one universally applicable set of rules by which to manage organization.
Major contributors in the contingency theories are-
Paul R. Lawrence,
Management by objectives (MBO) is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them. The term “management by objectives” was first popularized by Peter Drucker in his 1954 book The Practice of Management. The essence of MBO is participative goal setting, choosing course of actions and decision making.
An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. According to George S. Odiorne, the system of management by objectives can be described as a process whereby the superior and subordinate jointly identify its common goals, define each individual’s major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.
Features and advantages
Some of the important features and advantages of MBO are:
Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment. This increases employee job satisfaction and commitment. Better communication and coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the organization and also to solve many problems.
Clarity of goals
Subordinates tend to have a higher commitment to objectives they set for themselves than those imposed on them by another person. Managers can ensure that objectives of the subordinates are linked to the organization’s objectives.
Domains and levels
Objectives can be set in all domains of activities (production, marketing, services, sales, R&D, human resources, finance, information systems etc.). Some objectives are collective, for a whole department or the whole company, others can be individualized.
Objectives need quantifying and monitoring. Reliable management information systems are needed to establish relevant objectives and monitor their “reach ratio” in an objective way. Pay incentives (bonuses) are often linked to results in reaching the objectives.
There are several limitations to the assumptive base underlying the impact of managing by objectives, including: It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes. It underemphasizes the importance of the environment or context in which the
goals are set. That context includes everything from the availability and quality of resources, to relative buy-in by leadership and stake-holders. As an example of the influence of management buy-in as a contextual influencer, in a 1991 comprehensive review of thirty years of research on the impact of Management by Objectives, Robert Rodgers and John Hunter concluded that companies whose CEOs demonstrated high commitment to MBO showed, on average, a 56% gain in productivity. Companies with CEOs who showed low commitment only saw a 6% gain in productivity.
Stage 1. Collectively fixing objectives
The superior and subordinate managers collectively fix the objectives. The objectives are fixed for the Key Result Areas (KRAs). KRAs are those areas which are very important for the long-term success of the organisation. For e.g. R & D, Production, Finance, Marketing, etc. Definite and measurable objectives should be fixed for each KRA. The time limit for achieving the objectives should also be fixed. The objectives should be achieved by the subordinate manager. For e.g. The objective for the marketing managers may be to increase the sales of product XYZ by 50% for the year 2010-2011.
Stage 2. Collectively making a plan
After fixing the objective, the superior and subordinate managers make an action plan. This plan will be used by the subordinate manager to achieve the objective.
Stage 3. Subordinates implements the plan
The subordinate manager implements the plan. That is, he puts the plan to action. He makes optimum use of the resources. If required, he takes guidance from the superior managers. Stage 4. Collectively monitoring performance
This is the final stage in the MBO process. Here, the subordinate monitors (evaluates or measures) his own performance. He compares his performance with the planned targets (objectives). If there are any deviations, then the superior and subordinates managers fix new objectives. In this stage, the superior acts like a coach and guide. He does not act like a judge.