PLANNING

ROHAN KUMAR SINGH XII – D

17

What is Planning

Planning means setting objective and targets and formulating an action plan to achieve them. It concerned with both ends and means, i.e., what is to be done and

how it is to be done.

Planning is considered to be the basic or primary function of management because planning precedes all other functions of management and all other function are

performed within the framework of planning.

Steps In Planning Process

Setting Organisational

Objectives

Developing Planning Premises

Identifying Alternative Course

Of Action

Evaluating Alternative

Courses Of Action And Selecting The Best Alternative

Formulating Derivative Plans

Implementing The Plan And Follow-Up

Action

•The first and foremost step is setting organisational objective, which specify what the organisation wants to achieve.

Setting Organisational

Objectives

•Developing Planning Premises - Planning is concerned with the future, which is uncertain

Developing Planning Premises

•- Once objective are set and assumption are made, then the next step is to identify all possible alternative courses of action.

Identifying Alternative Course

Of Action

•The positive and negative aspect of each alternative need to be evaluated, i.e., its feasibility and consequences.

Evaluating Alternative Courses Of Action And Selecting The Best Alternative

•Derivative plans are formulated to support the main plan.

Formulating Derivative

Plans

•This step is concerned with putting the plan into action.

Implementing The Plan And

Follow-Up Action

Features Of Planning

Planning Focuses On Achieving Objectives

Planning Is Futuristic

Planning Is Pervasive

Planning Involves Choice And Decision-Making

Planning Is A Continuous Process

Planning Is A Mental Exercise

Planning Focuses On Achieving Objectives

as Specific goals are set out in the plans along with activities undertaken to

achieve them.

Planning Is Futuristic It is based on forecasting the future event and conditions.

Planning Is Pervasive It is not an exclusive function of top management .

Planning Involves Choice And Decision-Making

as it involves choosing the best alternative courses of

action.

Planning Is A Continuous Process.

Plans are prepared for a specific time period, e.g., a

month or a quarter or a year.

Planning Is A Mental Exercise as it requires application of mind and sound judgment.

Importance Of Planning

Planning Provides Directions

Planning Reduces The Risk Of Uncertainty

Planning Facilates

Decision- Making

Planning Reduce Overlapping And

Wasteful Activities

Planning Promotes

Innovative ideas

Planning Establishes

Standards For Controlling

Planning Provides Directions

By stating in advance how work is to be

done, planning provides

direction to action.

Planning Reduces The

Risk Of Uncertainty

Business enterprises

operate in an uncertain

environment.

Planning Facilates Decision- Making

Planning helps the manager to look into future and

make a choice from amongst

various alternative courses of

action.

Planning Reduce Overlapping And

Wasteful Activities

Since planning ensure the clarity in

thought and action, work is

carried on smoothly without

interruption.

Planning Promotes

Innovative ideas

Planning is thinking in advance

what to do and hoe to

do it.

Planning Establishes

Standards For Controlling

Planning provides the

standards against

which actual performance is measured.

Limitation Of Planning

Internal • Planning Leads TO Rigidity• Planning Reduces

Creativity• Planning Is A Time-

Consuming Process• Planning Involves Huge

Costs• Planning Does Not

Guarantee Success• Planning May Not Work In

A dynamic Environment

External• Natural Calamities• Technological

Changes• Changes In

Government • Strategies Of

Competitors• Changes In Fashion

Internal Limitation

Planning Leads To Rigidity Once a well-defined plan is drawn, managers may not be in a position to change it.

Planning Reduces Creativity Planning is done by top management .

Planning Is A Time-Consuming Process Planning requires collection of information, its analysis and interpretation.

Planning Involves Huge Costs When plans are drawn up, huge costs are involved in the formulation of plans, e.g., expenses on board’s meeting,

discussion with professional experts and preliminary investigations to find out the feasibility of the plan.

Planning Does Not Guarantee Success

The success of an enterprise is possible only when plans are properly drawn up and

implemented.

Planning May Not Work In A dynamic Environment

The business environment is dynamic. The organisation has to constantly adapt itself to

the changes in business Environment.

External

Natural Calamitiessuch as flood, earthquake,

famine, etc. are beyond the control of managers and cause

failure of planning

Technological Changes

reduce effectiveness of planning because when new technology is introduced, an organisation has to face several problems such as higher cost of production due to

obsolete technology, poor, competitive position in the market and higher capital expenditure to replace the

obsolete technology.

Changes In Governmentpolicies such as industrial policy, taxation

policy, bank rate of interest etc. upset forecasts and plans.

Strategies Of Competitors e.g., when a competitor introduces improved model of existing product, demand and sales

of a firm’s product may decline.

Changes In Fashion tastes and preferences of consumers may affect the sales forecast of a firm.

A plan is a specific action proposed to help the organisation achieve its objectives. It is a document that outline how goals are going to be meet. The importance of developing plans is evidence from the fact that there may than one means of reaching a particular goals.

Types Of Plans

Types Of Plans

Objectives Policy

Strategy Procedure

Rule Method

Budget Programme

Objectives

Objectives are defined as ends which the management seeks to achieve

within a given time period, e.g., increasing sales by 10% in the next

quarter.

PolicyPolicy is general which bring

uniformity in decision-making for achievement of predetermined

objectives.

Strategy Strategy is a comprehensive plans for achieving an organisation's .

ProcedureProcedure consists of sequential to

carry of activities within policy framework.

Rule Rule is a specific statement that specifies what is to be done or not to be done.

MethodMethod is the standardised way or prescribed manner in

which a take has to be preformed considering the objectives.

Budget Budget is a plan which states expected results of a given future period in numerical terms.

ProgrammeProgramme is a detailed statement about a project which outlines the objectives, policies, procedures, rules, tasks, resources required to implement any course of action.