Page 62 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Unit 3: Planning and Decision-making

be thoroughly examined before setting objectives. The objectives so derived must clearly Notes
indicate what is to be achieved, where action should take place, who is to perform it, how
it is to be undertaken and when is it to be accomplished. In other words, managers must
provide clear guidelines for organisational efforts, so that activities can be kept on the
right track.
2. Developing premises: After setting objectives, it is necessary to outline planning premises.
Premises are assumptions about the environment in which plans are made and
implemented. Thus, assumptions about the likely impact of important environmental
factors such as market demand for goods, cost of raw materials, technology to be used,
population growth, government policy, etc. on the future plans are made. The demand for
fuel efficient vehicles in the late 1980s has compelled virtually all automobile manufacturers
in India to go in search of collaborative agreements with foreign manufacturers from
Japan, Germany, USA, etc. Plans should be formulated by the management, keeping the
constraints imposed by internal as well as external conditions in mind.
3. Evaluating alternatives and selection: After establishing the objectives and planning
premises, the alternative courses of action have to be considered. Liberalisation of imports
and the use of high technology in recent times has encouraged manufacturers to produce
colour television sets, electronic sets, electronic equipments, videos, computers,
fuel-efficient vehicles, etc. Thus, changes in government policy, technology, competition,
etc. pose several alternatives before manufacturers, from time to time, regarding the
product they should manufacture. Such alternatives have to be carefully evaluated against
factors like costs, associated risks involved, benefits likely to arise, availability of spare
capacity, etc. The pros and cons as well as the consequences of each alternative course of
action must be examined thoroughly before a choice is made.
4. Formulating derivative plans: After selecting the best course of action, the management
has to formulate the secondary plans to support the basic plan. The plans derived for
various departments, units, activities, etc., in a detailed manner are known as ‘derivative
plans’. For example, the basic production plan requires a number of things such as
availability of plant and machinery, training of employees, provision of adequate finance,
etc. To ensure the success of a basic plan, the derivative plans must indicate the time
schedule and sequence of performing various tasks.
5. Securing cooperation and participation: The successful implementation of a plan depends,
to a large extent, on the whole-hearted cooperation of the employees. In view of this,
management should involve operations people in the planning activities. Suggestions,
complaints and criticisms from operating personnel help management rectify the defects
in plans and set things right in the beginning itself. Involvement of subordinates in
planning has the unique advantage of getting a practical view of those closer to the scene
of operations. According to Koontz, ‘plans have to be set in an atmosphere of close
participation and a high degree of concurrence’. Participation enables employees to give
their best to plans. They are also motivated to carry out the plan to the best of their ability.
6. Providing for follow-up: Plans have to be reviewed continually to ensure their relevance
and effectiveness. In the course of implementing plans, certain facts may come to light that
were not even thought of earlier. In the light of these changed conditions, plans have to be
revised. Without such a regular follow-up, plans may become out-of-date and useless.
Moreover, such a step ensures the implementation plans along right lines. Management
can notice shortcomings in time and initiate suitable remedial steps. A continuous
evaluation of plans also helps to develop sound plans in future, avoiding mistakes that
have surfaced while implementing the previous plans.

LOVELY PROFESSIONAL UNIVERSITY 57