Characteristics of a Good Planning Process

Characteristics of a Good Planning Process

Planning deals in future of the organization. Therefore organization must appropriately plan the future. Characteristic of a good planning process has been explained below;

1.    Based on Facts & Analyses

Planning must be supported by the fact & figures. It means that a details study of the data is essential for setting appropriate future objective /target (plans). This is utmost critical that realistic and implementable plans are set for the organization.

2.    Effective Participation

Planning is a question existence for the organization; therefore an effective participation is required at all level of the organization. It is not possible to frame good plans in absence of effective participation & inputs of stakeholders /Department.

3.    Objective & Goals are well Defined

Final Objective and goal should be well define and documented. There must not be any ambiguity about the future direction & destination. Such goal and objective should not be in the mind of the management, but on the paper.

4.    Role  & Responsibility

Plan should identify the roles and responsibilities for implementation the plans. Planning is done for implementation and implementation is done through people. Therefore people must know their implementing roles for timely and effectively execution of plans.

5.    Communication

Plans should be well communicated to the staked holder or concerned. It is not all about defining the roles and responsibility, but important thing is to communicate them to concerned individuals. Communication also includes development an understanding of the role by the concerned.

6.    Review & Up dating

Planning is not a static process and requires a regular review and updating. There must be a system of regular review of the plans and based on such review the plans are required to be updated.

Characteristics of Strategic Planning
Characteristics of Vision Statement
Characteristics of Good Planning Process

Advantages of Bottom up Planning

Advantages of Bottom up Planning

In case of bottom up planning data is collected and analysed at lower tier of management .The plans/ suggestions are formulated and forwarded to top management  for formal approval and implementation. Top management set plans on recommendations of lower tier of management. There are number of advantages of bottom up planning which have been explained below;

1.    Realistic Plans

Bottom up planning helps in formulating realistic plan for the organization. Operation manager has more information & knowledge about grounds realities, therefore their inputs are really helpful for defining realistic & achievable targets.

2.    Sense of Responsibility

Bottom up planning helps promote a sense of responsibility among lower tier of management. They take ownership of plans formulated on their recommendations. They will make a full effort to achieve the goals set by themselves.

3.    Self Monitoring

Bottom up planning serves as self monitoring tool for the employees to achieve the target set by them. Therefore there is no need to monitor the performance of the lower management.  Thus bottom up planning improves overall efficiency level of organization and reduces the need of supervision or monitoring.

4.     Problems with Solution

In bottom up planning problems comes with well defined solutions. People facing the problem always have some good solutions to solve these problems. This will save management time for finding the solutions of problems faced by employees.

5.    Decisions Options

Bottom up planning provides number of option to the management for decision making and planning. Some options are in the mind of management and some options are provided by lower tier of management.

6.    Collective Wisdom

Bottom up planning is a kind of collective wisdom. World recognized that collective wisdom provides better grounds for decision making.

7.    Improved Communication

In Bottom up planning, a lot of communication is happening between lower and top tiers of management. This communication is healthy for the organization in number of ways i.e. problems identifications, healthy environment, team building etc.

Types of Management

Types of Management

Management can be broadly divided into three categories i.e. Top level management, middle management and operational management.

1.    Top Level Management

Top level management includes director & chief executives. Top level management is responsible primarily set the overall direction for the organization and take strategic decision. Top level management oversees the overall performance of organization and performance of middle & operational management. Examples of Top Level Decisions are

·         Entry into the New Business

·         Launch of New Product Line

·         Structure of Financing for company

·         Dividend Payment Ratio

·         Core objective of Business

2.    Middle Management

Middle management is second tier of manage and take medium term decisions. Middle management primarily looks after or reviews the work of the operational management. This level of management primarily performs the review & controlling role within organization. Middle management makes following types of decisions;

·         Allocation of Required Resources

·         Goal or Target Setting for operational Manager

·         Review the performance of operational Manager

·         Establishment different Control procedures

·         Review the Compliance with set procedures

·         Approve operational budgets.

3.    Operational Management

Operational management is primarily responsible to carry out the operations. The examples of this management are assistant managers, supervisor, etc. These types of manager are involved in day to day decision making. The nature of these decision include the following,

·         Focuses on Efficiencies improvement of task assigned

·         Timely completion of tasks.

Important Considerations for Merger Decision

Important Considerations for Merger Decision

1.    Price of Business

The most important factor is the price of the acquiring business. A comparison between acquiring a business and setting up a new business is very important to make appropriate decisions.

2.    Goodwill is a Tricky Part

In many mergers you need to pay for the goodwill. Price determination of tangible asset may be very straightforward, while goodwill cannot be calculated; rather it is estimated and negotiated.

3.    Different Business Culture

Every management has its own style to manage and run the business. How management would introduce & implement its business practices in newly acquired business is a challenge.

4.    Books of Account

Incorporate new business in books of account is complex tasks and require a lot of skills and effort of accounts department, especially, when business has been acquired during the financial year.

5.    Integration at different Level

Integration of new company with old company is also important factor for merger. Integration includes Integration of managements of both companies, integration of employee of both companies.

6.    Careful Review of Agreements

Careful review of all agreement of the company is being purchased is also important consideration. These agreements provide useful information about the future liabilities & commitment made by company.

7.    Regulator Requirement for merger

There are some companies, which are strictly regulated by the regulator. Therefore buyer must also study the regulator requirement before purchase.

8.    Taxation is complex Area

Taxation of in merger is a complex area, and requires a lot of skills and knowledge. in many cases clear tax guidelines would be not available, and confusion would prevail.

Reasons for Merger

Reasons for Merger

Reasons of merger includes Time saving, saving of set up costs, buying of Goodwill, Creation of monopoly, risk diversification, and asset backing for the company.

1.    Time Saving

The building a new business is a time taken exercise, on other hand buying a business is not a time consuming job. Some business buying deals can be finalized in weeks, while some business development can take several years.

2.    Saves Set up Charges

There are number of costs involved in setting a new business, which can be saved by buying a business. These costs include different types of installation costs, initial production losses, trial production etc.

3.    Buying of Goodwill

A new business have no goodwill, therefore goodwill is always come with purchase of a business. Goodwill creation is a difficult task and depends on many factors. Therefore people prefer to buy business with goodwill than creating goodwill.

4.    Creation of Monopoly

Elimination of competition may be the reason of merger. Many multinational companies adopt this strategy to eliminate the local competitors. With elimination of competition, company is in a position to charge high prices and high profit on its product.

5.    Risk Diversification

Risk diversification may also be an important reason for merger. A lot of risk is involved, if a company is engaged in only one business. For example a company is producing umbrella, and if there is no rain in the summer, the company is expected to suffer heavy losses. This risk can be avoided by investing in a ice cream factory.

6.    Asset Backing

A company with good asset backing may be acquired as strategy, because earning can fall sharply but asset does not loss value sharply, instead some asset gain value (Land).

Important Factors for High Performance

Important Factors for High Performance

1.    Competent Hiring

Organization can achieve high level of performance by hiring competent and experience people. It is also important for organization to retain the competent person. Competent and high performing person have high demand in the market, and therefore a proper strategy should be device to retain them.

2.    Reward for Good Performance

There must be a reward structure for good performance. Reward serves one of the best motivating factors for high performance within organization. Performance based reward structure is key to achieve high level of performance.

3.    Hierarchy is placed

A proper hierarchy is required to achieve high level of performance. This hierarchy will serve as controlling tool to achieve high level of performance. Without a proper hierarchy, it is very difficult to control performance of employees.

4.    Target Setting

Realistic target setting is another important factor for achieving high level of performance. The targets must be challenging, but realistic. It will be more appropriate for management to set target with consultation of employees.

5.    Effective Communication

Effective communication between employee and management is another fundamental factor for achieving high level of performance. Communication with employee will boost employee confidence, such communication will also helps in identifying the problems faced by employees. Thus effective communication is useful tool to achieve high performance.

6.    Respect to Employees

Employee are not slaves, therefore, they must be respected. Such attitude will motivate employee to give their best effort.

7.    Encouragement is fruit full

Research is proved that encouragement increases the performance of the employee. Therefore management should regularly recognize the employee efforts and also encourage them for their performance.

8.    Honesty & Sincerity

Introduction the culture of honesty & sincerity will also helps to increase the performance of the employees. Management can create this culture by creating awareness about honesty & sincerity.

Characteristics of Strategic Planning

Characteristics of Strategic Planning

1.    Long Term Objective

Strategic planning primarily set the long term objectives for the organization. Strategic planning is done to place the organization on a desired position in the future.

2.    Structures & Documented

A good strategic plan is well structured & documented. The roles and responsibilities for achieving the long term objectives are well defined & communicated to the stakeholders. There is no ambiguity of roles & responsibilities.

3.    Based on Depth Analyses

Strategic planning is based on the depth analyses of business and its environment. This analysis helps management to understand the business and its environment in more details & depth.

4.    Set Future Direction

Strategic planning is basically setting a future direction of the organization. Strategic direction is really helpful to device corporate & operational strategies for the organization. This direction also facilitates decision making process within organization.

5.    Integration & Team Building

Strategic planning is helpful for integration & team building within organization. Everyone is working in the same direction set by the management. This is one of the major advantages of strategic planning.

6.    Short Term & Medium Term plans

Strategic plan are achieved by implementing the short term and medium term plans. Therefore strategic planning primarily is future position of the organization, which is achieved through short term & medium term planning.

7.    Monitored & Updated Regularly

Business is dynamic in nature; therefore a static strategic plan is not suitable. Strategic plan is regularly updated to accommodate the changes in the environment of business. There must be a proper mechanism of monitoring the strategic plan implementation.

Characteristics of Strategic Planning

Characteristics of Vision Statement

Characteristics of Good Planning Process

Characteristics of TQM

Characteristics of TQM

Characteristics of TQM may be explained in terms of Customer is important, System of controls, Prevention than detection, roles & responsibilities defined, Zero defect, Wastage & Losses, and right at first time.

1.    Customer is most Important

Customer is placed at highest priority in the Total Quality management. It means that there is no compromise on customer satisfaction under TQM concept. Entity shall made all effort to achieve customer satisfaction.

2.    System of Controls

TQM requires a proper system of control within organization. It is important to note that without such system total quality is not achievable. An effective system of control is required at each level within organization.

3.    Prevention than Detection

Prevention is focused in the Total Quality Management (TQM). Product defect should be prevented rather than detected and corrected. There are a lot of costs associated with detection & correction; therefore organization should not incur those costs.

4.    Roles & Responsibilities Defined

Roles & responsibilities are well defined in Total Quality management. The quality responsibilities are well define & communicated to concerned persons. The roles of responsible persons for quality management are also well communicated to responsible person.

5.    Zero Defect is Possible

Total Quality Management speaks for Zero defect in the product. It means that organization will provide the promised product to the customer without defect and as per customer satisfaction. All efforts are made by entity to achieve the defect free product.

6.    Wastage & Losses not Desirable

Total Quality management system says about the minimum possible wastage (normal loss) and there are no reasons acceptable for abnormal losses & wastage. it is important to note that some losses are unavoidable in nature (normal losses), these losses are acceptable under TQM.

7.    Right at First Time

Total Quality Management strongly believes in right product at first time. There is no concept to detect and correct the defect under the total quality management. It means that there should not be a haste to launch the product on the assumption that defect may be removed later on.

8.    Poor Quality is Costly

There are number of cost associated with poor quality, therefore poor quality is not acceptable under any circumstances in Total Quality Management

Characteristics of Vision Statement

Characteristics of Vision Statement

Vision statement primarily explains the reason of existence or core objective of the organization. In practice only one core aspect of organization is targeted or explained in the Vision statement.

1.    Real & Reflective

Vision statement should reflect the reality of the entity. Vision statement tells reality, for example if vision statement says “We Provide Quality”. Then product quality should be premium objective of the organization.

2.    Brief & Comprehensive

Vision should be brief & comprehensive in nature. Normally vision statement consists of one to two lines and explain core objective of the organization. In most cases vision statement vision statement consist of one line.

3.    Original & Unique

Vision statement should be unique in nature. Vision statement should be originally designed / framed by the entity and wording of statement should be original and fresh. A copied concept or wording is not recommended under any circumstances.

4.    Easy Language

Vision statement should be easy to read & understand. It means that vision statement should be written in easy language. This will help reader to remember the vision statement.

5.    Should Leave Impact

Vision statement should leave an impact on the reader of the statement. Vision statement should have artistic value. Vision statement should remain in the mind of the customer /reader.

6.    Relevant to Industry

Vision statement should be relevant to industry. For example in case of service industry the customer may be focused like “we value our customer”, while in case of manufacturing industry product may be focused “Our product itself speaks about Quality”.

Characteristics of Strategic Planning

Characteristics of Vision Statement

Characteristics of Good Planning Process