Read Summary on Planning Tools

For Forman College Business School readers: You can read a summary by me and my Griffin group [griffin stands for 'who is new' and indeed an object of mockery, as it those new British Indian Civil Servants were] on Chapter # 9 of Managment by S. P. Robbins. At this link.

What on Earth is a Manager?

Who Are Managers?

Managers coordinate and oversee the work of other people so that organizational goals can be accomplished. His job is helping others do their work. His duties are not merely restricted to coordinating.

• Top Managers (executives, who make nonprogrammed new decisions; establish plans & goals)
• Middle Managers (all levels the extreme two)
• First-line Managers (who work in field make programmed decisions)

What Is Management:

What managers do is management. Formally speaking, management is coordinating and overseeing the work activities of others so that their activities are completed efficiently and effectively.

• Efficiency: -- getting the most output from the leasat amount of input; doing things right
• Effectively: -- doing those work activities that help the organization reach its goals; doing right htings

What Managers Do?

Functions

• Planning -- defining goals, establishing strategies, and developing plans
• Organizing -- arranging and structuring work
• Leading -- working with and through people
• Controlling -- evaluating whether things are going as planned

Roles

• Interpersonal -- figurehead (symbolic figure), leader (responsible for motivation of subordinate), liasion (maintains self-developed network of outside contacts and informers)
• Informational -- monitor (seeks and receives information to understand organizationa and enviornment), disseminator (transmits information within organization), spokesperson (transmits information to outsider)
• Decisional -- entrepreneur (searches for opportunities and reforming plans), disturbance handler (corretcs disturbtive events affecting organization), resource allocator, negotiator

How Manager's job Is Changing

• Changes impact manager's job - changing technology, increased security threats, increased emphasis on ethics, increased competitiveness
• Importance of customer (customer responsive organization'scan only please the customer)
• importance of Innovation (nothing is more risky than not innovating for manager. A normal strategy of a small organization is that they must issue a new brand with three weeks. They are doing so only for mere survival)

What Is an Organization Where Manager Works?

Def: Organization is a deliberate arrangement of people to accomplishsome specific purpose. Traditional organization are being replaced by contemporary organization beacuse the world is in change.

It has three elements: Distinct Purpose (goals or set of goals); Deliberate Structure (structure is their to unable people to do work); People (a persoan working alone is not an organization). When they all overlap each other, lo! an organization is formed.

Why Study Management?

Even if are majoring in marketing, finance, accounting, sciences or art, we can explain to you the need of looking at management from its own view-point. We would like appreciate management on these basis:

• The Universality of Managment: the reality that management is needed in all types and sizes of organizations, at all organizational levels, in all organizational areas, and in organizations in all countries around the globe.
• The Reality of 'Work': either you manage or be managed; either you act or be acted upon.
• Chanlleneges and Rewards of a Manager

The Essence of the Manager's Job

Decision making Process:

Introduction:

First you detect a problem. Your home ceiling is in bad order. You wish not that clumsy ceiling, you want a refined and cemented and well-painted ceiling. That's a real problem. Ok. So you pick all of your tools or hire a constructor and get your ceiling anew. And, after doing so you will probably check whether its up to your expectation or not. A job well carried out.
But have you noticed you've done what exactly we call decision making process? If not time has come just to realize that.

Decision-making process (D.M.P):

A wholistic comprehensve process... Not merely selecting of alternatives. Not identifying the problem. Not merely reevaluating decisiosn effectiveness. Rather integration of all of them. DMP is an all-relevant process for all seasons and ages! Its as relevent to your personal decision about which class to bunk as it is to a billion-dollar corporate deal.

What is a Problem: A discrepency or 'gap' between an existing and a desired state of affair.

8 Step The Process:

1. Identifying the problem (watch-out for symptoms of a deeper problem, they're not the problem),

2. Identifying decision criteria (determine what's relevant in a decision)
3. Allocating Wieghts to the criteria (giving correct priority)

4. Developing Alternatives (don't you need best of the best?)

5. Analyzing Alternatives (evaluating the alternatives against step 2 & 3)

6. Selecting an alternative
7. Implementing the alternative (putting the decision into actions)

8. Evaluating Decision Effectiveness (see Part 6 of book).

How are decisions made?

We are here dealing with decisions in management functions. Decisions in management are of four types - planning, organizing, leading and controlling. When managers do these activities they're called decision makers.

There are three ways of looking at how decisions are made:

• Rationality: The foundations of rational-choice-decisions are described as when having clear, unambiguous problems, when time-pressures are low, when action against problems have known consequences and results. Remember in managerial context, decision maker keeps only in view value-maximizing of its own company.
• Bounded Rationality: Rationality is very limited in real world, at least the kind of assumptions suggested already. Managers are supposed to be making 'rational-choice-decisions'. Yet, they are bound to make limited rational decisions because of 'human capacities and abilities'. This is called bounded rationality. That is, they don't maximise them, rather satisfice.
• Intuition: Making decisions on the basis of experience, feelings, and accumulated judgment spontaneously. Organically, intuition and intellect are same, complementary rather than sui generis (as Al-Ghazali thought wrongly). Almost half of the corporate executives use to run their companies,one survey study found.

Types of Problems & Conditions in Decision Making:

Types of Problems: There are total of two major problems which managers face in approaching to a problem with DMP.

• Structured Problems: Logical, trivial, understanable, straight-forward problems which have a priori structured or defined rules, solutions or procedures. Happily, in tackling such problems a manager don't need to go through even DMP.
• Unstructured Problems: When you're having problems that are new or unusual having incomplete information, then such problems are categorised as unstructured problems. To such problems there lie no black-and-white ready-made solution. Key to them is creative bend of mind.

Who gets which?

-Low-level mangers - they face structured problems

-Upper-level managers - they deal with nonprogrammed problems.

Decision-Making Conditions: Multiplicity and diversity is everywhere, decision-making, no exceptions. Therefore, there are three conditions managers face as they make decisions:

• Certainity: A situation in which a manager can make accurate decisions because all outcomes are known.
• Risk: A position form whre estimates of outcomes can be made, only (this happens when 'doubts' are alive, but dormant).
• Uncertainity: When any probable estimated outcome seems as unlikely as another guess. Amount of information and psychological aptitude of the decision-maker are indicators of either success or complete failure. We have three choices: maximax, maximin and minimax. Again, a manger shall follow anyone of these choices based on his psychological orientation and amount of data.

Decision-Making Styles:

Directive Style: they tend to have low level tolerance for incomplete information and are highly rationalistic. (Thinker)

Analytic Style: they tend to have high level tolerance for ambiguity and their way of thinking is rationalistic. (Sensor)

Conceptual Style: Intuitively they think and keep high level acceptance for ambiguity. (Intuitor.)

Behavioral Style: They think intuitively while having low-level tolerance for ambiguity. (Feeler.)

Biases and Errors in Decision Making:

Humans are humans. Their professional decision making goes not without having a mark of their nature on it. Thus they can commit mistakes in the form of biases and trivial errors - overconfidence, sunk cost (lack of realisation that today's actions cannot rectify past's mistakes), randomness, availability, self-serving bias, selective perception (narrow-mindedness), hindsight bias etc.

Todays' World and Decision Making:

Americans feel better with Americans, Japanese with Japanese, Pakistanis with Pakistanis and so on. My question to you is you don't you open up? Understand Cultural differences. Carlos ghosn did this in Nissan in1999 as he was the first ever non-japanese in Nissan. Yet he changed many persisting traditions in the company. In Japanese culture people with old-age and long experience mostly reached at higher levels. It wasn't happening on the basis of performance, primarily. Ghosn changed this paradigm as well the tradition. But how? He was able to resolve this apparent conflictin proposition on the basis of securing respect of his employees, in the first place. Japanese who worked with him, never doubted him.

Peace Keeping by Delegation

Delegation By Authority

When I first came to know of possible conflicts that can happen while decision making in teams, I was elusive of any concrete solution. Some teams are stuck by dictator-by-default syndrome of CEO or team-leader, mentions an article in Harvard Busines Review. It has, to me, a good solution, namely, Delegation, though very indirectly!

Def: When managers get things done by 'transfering' a part of their authority through others, they're delegating by authority.
Now, what's precisely the use of it for a man who manages?
A handbook for managers states, "Delegating reponsibilities to others increases your available time to carry other important tasks." 'Willingness to delegate is a mark of leadership'. But its difficult a task to delegate. Therefore, here I'll summarise five of those behaviours which effective delegators use:

1. Review and Specify the Task and Objective:

Tell what is to be delegated. Without clarification of the task, which is to be delegated, doesn't make any sense. Moreover, delegation need not a lengthy written plan, as night fighter F-117 takes in its hardware before going on the mission. It means that you're are to specify details of task, deadline and resources. Since, it is a high-risk management, briefing is only essential.
It is much an intuitive approach or strategy. The delegator only mentions the intent of the mission, tell what results he wants and forget everything about it till the outcome comes out.

2. Selecting Appropriate Person:

Select appropriate man for the job who has previous expreince and availability. You can do so effectively by asking yourself questions before selecting the delegates: Who has the stomach for challenges? Who should not do? Does the task need previous experience? What interpersonal or intrapersonal qualities might be needed for the job? and so on and so forth.

3. Bound Your Employee, Bound the Delegation:

Specify employee's range of discretion or his freedom and power to decide. Its important. Because you, as a manager, don't want to or mean to be delegating whole of your authority. Specify the parameters, leave no doubts in letting the delegate know this.

4. Allow the employee to participate:

This point can help you to decide in best manner how much authority is to be delegated. You've selected an experienced and appropriate delegate and have called him to meeting. After going through step 1 and 3, discuss with him to check his understanding of the job and ensure commitment. Encourage him to feedback.

Be aware! Letting amployee decide how much authority he needs can present you with problems, like of 'self-interests, biases in evaluating their own abilities'.

5. Inform Others that Delegation has occurred:

Communicate throughout the organization that delegation has taken place. Issue all the parameters, tasks and objectives of the delegation especially to those, inside or outside the organization, who might be affected by the decisions of the delegate.

6. Establish Feedback Channels & Monitor Progress:

The next logical step can be, in order to aviod any management problems, 'establishment of feedback channels on the regular basis'. You can do so by 'fixing official reporting schedule, if appropriate'. You should also encourage feedback. This essential for controlling and coordinating. Moreover, regular updates can help to evaluate performance, not only the basis of outcomes but also on the basis of the actions, which issued the results. After, evaluation and re-evaluation, if appropriate, 'apply lessons to future delegations'.

Summary: Chapter 7, Management, by Stephen Robbins

FOUNDATIONS OF PLANNING

What Is Planning and Why Is It Important

Consider this: A motorcycle manufacturing company Harley-Davidson recognizes that the demand for its motorcycles will continue to grow in the range of 7-9% per year. Realising this problem, they now plan to continue expanding production capacity. This is exactly like doing planning.

Planning - Def:
Defining organization's goals, establishing an overall strategy for achieving those goals, and developing plans for organizational work activities.

Formal Planning: In formal planning, specific goals covering a period of years are defined. These goals are written and shared with organizational members.

Importance of Formal Planning:

1. Provides Direction: When every employee knows what he has contirbute to the company, what it takes to do so, that he can cooperate with each other - such a company is mostly likely to reach its goals efficiently.

2. Reduces Uncertainty: Planning cannot utterly defy dynamic situations. Best it can do is unable managers to see ahead, anticipate changes and develop appropriate responses.

3. Minimizes Waste and Redundancy: When all means and ends are made clear, inefficiences are
easily detected and can be corrected. This happens so when work activities and plans are coordinated with the company.

4. Establishes goals or standards used in Controlling: When managers plan, they develop goals and plans. Thus they easily control the progress. Without any planning there would be no control.

5. Positive Financial Results: Planning is as such concerned with higher profits, higher return on assets. Planning seems good if its implemented good rather than does the extent and amount of planning

- Critical Enviormental Forces: Studies have found that when some company's planning fails, it is majorly because of external conditions as Government regulations, Tough Labor Unions etc, which leave managers with little or no choice.
- Time Frame: Usualy a company can take four years for its complete formal plans.

Types of Goals:

Goals in short are the foundations of management science/art. In real and profession life there are two kinds of goals:
-stated goals
-real goals

Stated goals: are those statements which show what we want to achieve, what we aspire to do. From organization's perspective, stated goals are "outlines of what an organiztion say, and what it wants its stakeholders/customers to believe, its goals are."

Real goals: The goals organization actually pursues. It is manifested only in the 'doings' of its members, not in it's sayings.

One thing must not go unwatched in the discussion of goals. There maybe a conflict/contradiction b/w what a company say and what it does. The gap b/w stated and real goals is- conflict in stated goals.*

Types of Plans:

There are four ways to describe a plan, we'll mention only there names:

1. Breadth: strategic plans (positioning of entire org. relative to enviornment); operational plans (to limit details as to how achieve overall goals)

2. Time Frame: Long-Term Plans (beyond 3 years); Short-Term Plans (1 year or less)

3. Specificity: Directional Plans (in which intent is revealed, its flexible, leaves room of interpretations); Specific Plans (Rigid, clearly defined, no place for interpretation)

4. Frequency of Use: Single use; Standing (ongoing plans)- Approaches to establishing/implementing goals.

How do Mangers Set Goals?


- Traditional Approach: "Top-Down"

In a traditional goal setting, there's always an elite which works at top management level, very few in numbers. They're the head, the boss. And they are followed by a number of officials, managers, employees, workers etc., but in "hierarchy", in descending order everyone gets samller in rank.

(a) If Hierarchy of goals is clearly defined, a mean-end chain is formed
(b) If it is not clear, goals lose clarity and unity

- Management by Objectives (MBO) approach:

Def: A process of setting mutually agreed-upon goals and using those goals to evaluate employee performance.

A four-step process:
1. Goal Specificity
2. Participative Decision Making
3. Explicit Time Period

4. Performance Feed-Back
What is needed in an organization is: a corporate culture in which the heirarchic levels break up, where it needs to. So that the bosses assure that plans are not being imposed from the top. And, that the different isolated levels of the order mix up with each other, so as to let everyone understand complexity of the problem and find integrated solutions..... I call it- decentralization. "Decentralization, if implemented with sophistication and best monitring tools, could be great."

Charatersitics of Well-Defined Goals

They are
-Stated are stated in terms of outcomes rather than actions
- Measureable and quanitifiable
-Clear time time-frame
-written down
- and, communicated to all organizational members.

What Contemporary Planning Issues Managers Face?

Criticisms of Planning:

1. Creates ridigity: Since Plans are written at a point in time, it can fail us to react to changing situations

2. Can't be Developed for Dynamic Enviornment.

3. Can't replace intuition and creativity: A research study has found that a greater percentage of CEOs get their business flourish better if they're more intuitive in anticipation than those who are not. Gut feeling has no alternative.

4. Focuses on today, not tommorrow.

5. Reinforces success, which can lead to failure: Unique situations demand unique solutions. Established plans are no option in unique crisises.