Unit II

Planning & Decision

Making
 Definition
• According to Harold Koontz, “Planning involves
selecting mission & objectives & the actions to
achieve them; it requires decision-making that is,
choosing from alternative future courses of action”.

• Planning is deciding in advance what action to

take, how & when to take a particular action, &
who are the people to be involved in it. It involves
anticipating the future & consciously choosing the
future course of action.
 Nature of Planning
Planning is
• Goal-oriented
• Intellectual or rational process
• Primary function
• All-pervasive
• Forward looking
• Perpetual process
• Integrated process
• Involves choice
 Significance of Planning
• Focuses attention on objectives
• Offsets uncertainty & risk
• Provides sense of direction
• Provides guidelines for decision-making
• Increases organizational effectiveness
• Provides efficiency in operations
• Ensures better coordination
• Facilitates control
• Encourages innovation & creativity
• Facilitates delegation
 Types of Plans
Plans based on
• Organizational level
 Strategic plans
 Tactical plans
 Operational plans
• Frequency of use
 Single-use plans – budgets & projects
 Standing plans – policies, procedures & rules
• Time frame
 Long-term plans
 Intermediate plans
 Short-term plans
 Steps in the Planning
Process

Analyzing Establishing Determining Identifying

opportunities objectives planning alternatives
premises

Review Implementation Selection Evaluation

 Prerequisites for Effective
Planning
• Establishing the right climate for planning
• Clear & specific objectives
• Planning premises
• Initiative at top level
• Participating in planning process
• Communication of planning elements
• Integration of long-term & short-term plans
• An Open Systems Approach
• Management Information System
 Limitations of Planning
• Lack of accurate information
• Time consuming process
• Expensive
• Inflexibility
• Resistance to change
• Environmental Constraints
• Lack of ability & commitment
• False sense of security
• Reluctance to establish goals