Nature of Organizational Planning What is Planning? “Planning is an intellectual process, the conscious determination of courses of action, and is a continuous process of decision making with built in flexibility.”- Herold Koonz and Weirich Planning is the most basic and primary of all management functions on the premise of which other functions evolve. It would be appropriate to compare planning to the basement or foundation of a building upon which the entire system rests. Planning bridges the gap from where we are to where we want to go. Planning involves selecting the best objectives and deciding on the suitable course of action. When we talk about planning, control is another entity that tags along like inseparable two-sides of a coin. Without planning there is no control and without control planning becomes meaningless. NATURE OF PLANNING: Prime function of management: Planning is the key to all other functions of management like organizing, leading, staffing and controlling. Is a continuous process: Plans need periodic review in the wake of external environment and internal resource potential and thus is a continuous process. Is an intellectual process: What is to be done, when, who and how are the very important questions that loom before a manager before making every decision. He has to use his intellect in order to make the right plans before acting. Is all pervasive: It penetrates right from the top to the bottom level of management, but it is the responsibility of the managers or executives at the top level to make the right moves at the right time. Is flexible: One has to understand that flexibility is restricted when it comes to irretrievable costs already incurred in fixed assets, training, advertising etc. Is goal oriented: Planning starts with setting up of objectives and completely goal oriented.   TYPES OF PLANS: Purpose or Missions: Basic task of an organization. For example, teaching and research can be attributed as the basic function of an educational institution; the purpose of business is to produce, distribute goods and make a surplus. Objectives: These are the goals that have to be accomplished by the organization. Corporate companies chart out their production plan well in advance to meet the requirements on time. For this they break the objectives into short term goals i.e., for a quarter based on the sales forecast. This kind of planning gives clarity and direction for the production team to achieve the goals. Strategies: These are the set of action plans designed in order to achieve the future objectives backed up by long term perspective in the wake of environmental analysis and give direction in which the resources have to be channelized. Policies: These are basically the guideline books that direct the course of the organization’s function as what to do and what not to-do. They see to that the decisions made fall well within certain boundaries in order to ensure fair and equitable treatment to all the employees. HR policies govern all the functions related to pay, promotion and other disciplinary mechanisms related to the work force. Procedures: They are programmes designed to carry out the activities of the organization in a specified manner. The procedures for placing a purchase order, payment collection etc., Programmes: A programme is the sum total of goals, policies, procedures, rules, task etc., For example, new product development may be cited as a major programme while promotional campaign may be cited as  a supporting programme. Budget: No plan is feasible without a budget allocated to it. A budget is a numberised programme and more of a control device. Revenue budgets, expense budgets, production budgets to name a few. Zero base budget: This kind of budget does not take into account the previous year’s performance record or budget but treats every progarmme afresh and starts working from ground up. Each programme is treated as a separate...

Performance Appraisal is considered to be the most significant and indispensable tool for an organization. It is a measure of the employees’ performance levels in terms of the specific job’s requirement. It is a process employed for the purpose of placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group. Purpose of Performance Appraisal Douglas McGregor says “Formal appraisal plans are designed to meet three needs, one of the organization’s and the other two of the individual namely, Performance appraisal methods facilitate systematic judgments to decide on the salary increases, transfers, demotions or terminations. They serve as a yard stick for an employee as to where he stands in the performance rating queue in the eyes of management and how he needs to adapt or improve himself regarding behavior, attitude, skills or job knowledge. They are used as a means to train and counsel each and every employee by the respective superiors. Performance appraisal can also be termed as Merit rating Behavioral assessment Employee evaluation Personnel review Progress report Staff assessment Service rating. According to Levinson, it definitely provides adequate feedback to each individual for his performance and also serves as a means for changing behavior. Prime Objectives of Performance Appraisal Helps to maintain manpower inventory of an organization which includes quantity and quality, to identify the training needs and aspirations of the work force. To determine increments and provide a reliable index in promotions and transfers to positions of greater responsibility. To improve individual as well as group development by determining the performance standard and motivating the employees to perform well. Providing support to employees who are not able to focus and to bring them back into the groove. The Process of Evaluation Establishment of performance standards. Communicating the same to employees. Aquiring information through personal observation and statistical reports from the respective departments. Appraising and judging the future potential growth and advancement. Identifying the deviation between the actual and standard performance levels. Discussion with the employee for subsequent improvement or corrective action. Appraisal Summary 1.    Personnel Background covering the following details are collected Age Family background Marital status Children Education Specialization and degrees Office held Work history Social accomplishments Honors and awards Professional or trade organization membership Publications Special limitations Family problems Hobbies and recreational activities 2.    Nature of Work: Job performance and personal qualification Technical performance Level of motivation in current position Intelligence as reflected on the job Emotional stability Leadership skills 3.    Overall Performance Rating: Recommended action Knowledge Skill Attitude Methods of Performance Appraisal Traditional methods:  These rely upon evaluating an individual’s creativity, intelligence, drive, dependability, leadership potential, initiative and organizing capability which are more of personal  in nature. Modern methods: These include ranking method, graphic rating scales, forced choice description method, critical incident and 360 degree evaluation methods. The 360-degree appraisal method is employed in big corporate companies where the individual’s overall performance is appraised by his colleagues, boss, customers, suppliers and stake holders. Management by objectives, management by exception , self appraisal and human asset accounting are other methods used for appraisal. Problems that may arise during performance appraisal Halo Effect: It is a tendency to let the assessment of an individual’s any one trait to influence the evaluation of that person on other specific traits. The Central Tendency problem: It assigns average rating to all the employees in order to avoid commitment. Similarity error: This occurs when the evaluator evaluates other persons based on ‘self perception’, that is if he perceives himself to be adventurous or daring he may evaluate others looking for that same trait which he possesses. How to make appraisal successful? The superior must be well trained and a composed person to judge without error or personal...

One of the key concepts of leadership is that everyone has innate leadership skills that can be ‘polished’ and developed. In excellent organizations, everyone, regardless of title or position, is encouraged to act like a leader. One of the principles of effective leadership is “to make sure that other people will be willing to follow you. Unfortunately, management education doesn’t place enough emphasis on leadership skills.” The functions of a leader can be defined as follows: 1. Taking the initiative – A leader initiates all actions necessary for the purpose of warranting the health and growth of the enterprise in a competitive economy. 2. He identifies group goals 3. He represents the organization 4. He acts as an arbitrator 5. To assign reasons for his actions 6. To interpret the objectives of organization 7. To guide and direct the organization 8. To encourage team work 9. He manages the organization Top 50 Quotes That Show the Road to Success This exemplary leadership model by kouzes and posner will give you a fair idea on how a leader should set behavioral and performance standards in an organization. Leadership Styles Every leader has his own style that can be defined as a leader‘s behavior towards group members. It refers to the pattern of behavior which a leader embraces in influencing the behavior of his subordinates in the organizational context. Different leadership styles can be categorized as follows. 1. Autocratic Leadership Autocratic leadership is also known as authoritarian, directive, leader centered or monothetic style. Under this style, leader concentrates all authority in himself, instructs a subordinate as to what to do, how to do it, when to do it etc. He also exercises close supervision and control over his subordinates. There are three categories of autocratic leaders a. Strict Autocrat – A strict autocrat believes on negative authority and gives orders which the subordinates must accept. He may also use his powers to disperse rewards to his group. b. Benevolent Autocrat – The benevolent style aids in accomplishing high productivity in many situations and he can develop effective human relationship. His motivational style is usually positive. c. Manipulative Autocrat – A manipulative autocrat leader is one who makes the subordinates feel that they are participating in decision making process even though he has already taken the decisions. 2. Participative Leadership This style is also called as democratic, consultative, group centered or ideographic style. A participative leader is one who consults and welcomes his subordinates to participate in decision making process. Under this style, subordinates are freely allowed to communicate with the leader and also with their fellow subordinates and take their own initiative. 3. Laissez Faire or Free-rein Leadership Under this style of leadership, the leader mostly depends upon the group and its members to establish their own goals and make their own decisions. The leader is passive and assumes the role of just another member in the group. Only very little control is exercised over group members. This style is also known permissive style of leadership. This style is appropriate only in certain situations where the manager can leave a choice to his groups. A leader is supposed to possess these discretionary skills required at different times and during interaction with different people… Qualities of a successful leader The following are the major innate qualities in a successful leader. 1. Physical features like height, weight, health and appearance 2. Intelligence 3. Emotional stability 4. Human relations 5. Empathy 6. Objectivity 7. Motivating skills 8. Technical skills 9. Communicative skills 10. Social...

The Spirit of Entrepreneurship In the modern competitive business environment, not all graduates of various disciplines like engineering, management and the like can aspire for white collar jobs. The recent global recession has made the prospective job seekers think twice about working in foreign countries. Self employment has become the order of the day. Being your own boss is truly inspiring and motivating at least in theory. When it comes to reality, we need to know exactly what does it take to become an entrepreneur by starting a small business or taking over the business run by your predecessors. Why we need more entrepreneurs? Various avenues have been opened up thanks to communication and transportation that has brought the world under a single huge umbrella. Also small industries face minimum risk as the investments are marginal and they have the liberty to try a number of innovations like combination of new products new materials new methods of production new markets new sources of materials and even New forms of organization. Being a competitor in an open market, minimum profit and constant revenue inflow are assured and also they can enjoy the benefit of minimum fluctuation in the product price as it is determined by the market and not by individuals. Want to know 10 Daily Habits of Most Successful Entrepreneurs? Scope of entrepreneurial activity: Either you can be a subsidiary to large scale business or you can engage yourself in supply of repair services with small engineering establishments or you can go for small cottage industry businesses like cutlery, furniture, jewelry, fruit canning, soap making etc., Being fairly labor intensive, you can provide economic solution by creating employment and income opportunities in urban and rural areas with relatively low cost of capital investment. Business process outsourcing has been in recent times the magic happening in countries like India, China etc., where the foreign investors take advantage of cheap labor, time and efficient communication skills of the population. Knowledge process outsourcing has also become popular and it stands as a testimony of the rising power of Asian countries over the west. “Small is beautiful” and you can make it big in the small scale business industry if you are Innovative and productive Provide personalized services to the customers Identify and target the right markets This ensures “WINNING THE GAME OF BUSINESS“. An economy grows only when it has large number of enterprises accelerating the economic growth prospects of that particular country. The export policies of all nations have become more flexible owing to globalization, liberalization and...

There is no Business Success Without Risk What is the Risk of Taking a Chance in a Business Activity? Business is often viewed as a game or a gamble in which success is always at risk. Think about it, risk is present in every sphere and aspect of our lives and even when you are not running a business. So why the fuss? A thorough knowledge and research of the business activity you are about to perform will give you the needed confidence to go about it. A true business man is an entrepreneur who treats risk as an opportunity rather than a challenge. Business organizations are started with a single purpose, to make profit and then more profit. Only when the organizations grow, there comes the awareness and necessity to think about stakeholders’ interest and working towards a social cause. Initial stages definitely pose threats for the very survival of the organization. Risk is an inherent part of a business as you are not sure about the outcome of your business activity. What are the Chances or Probability? We talk more about probability and chance outcomes when you deal with a particular product. Retail segment is one area where the risk of duplication is high and people have to be cautious and careful in order to protect their copyrights and symbols from being replicated. Mild inflations can benefit the market but recessions put you in doldrums especially if you are dependent on a wholesaler or a manufacturer. Risk can aspect itself in the following ways: Economically- Attrition and effects of global economy Legally- Labor laws and enactments Socially- Expectations from the public in general Government rules and regulations- Government policies and export duties Stakeholder expectations- Wealth maximization and assured profits Environmental – Need to comply with changing standards like waste affluent treatment plants Political scenario- Effects due to changing governments Risk and Uncertainty Risk and uncertainty go hand in hand and you need a risk management template or a model for your reference to solve or manage risks. The first and foremost step would be to identify the risks in your sphere of business activity. Risk documentation or creating a risk profile is an inevitable move for a new organization. This prepares the organization mentally to face challenges in a structured manner and reduces disorientation. It is very important to keep in mind the organisation’s objectives while documenting the risk profile to keep your focus unaltered. Risks evolve continuously and it is the responsibility of the top management to be in line with the market economy to manage the adverse conditions that come in the way. How to Manage Risks? Risk management is an ongoing and continuous process and it cannot be looked upon as a distinct area to be managed by a set of individuals. In a small and upcoming organization the responsibility lies on the shoulders of each and every individual to self assess, evaluate and manage risks and find the right kind of solution that will not be detrimental to the core objectives of the organization. Bigger organizations can afford to have expert opinion by commissioning PROFESSIONALS to identify, assess and manage risks. An overall and broad perspective of risk is what has been analysed here. There are numerous possibilities of risks, whether big or small in magnitude, affecting an organization. A thorough study of the field you are about to venture into, the pros and cons of the business activity, time of launch are few things that will help you to analyse what the market niche warrants for and act accordingly. In further segments, let us look into the factors of risk, identifying and...