Nature of planning Overview 

of The Lesso

 The Essential nature or characteristics of planning can be highlighted by the following points.

1.     Primary of Planning – The functions of management include planning, organizing, staffing, directing
and controlling. It is most basic management function. As a matter of fact all other function of
management largely depends upon planning. For example control cannot exit without planning.
Organization is also setup with a plan & objectives in mind. Planning is therefore the primary function of
Management.

2.     An intellectual activity – Planning involves choosing the proper course of action from among
alternatives & calls for decision-making which is an intellectual process. Change in environment bring
opportunities, and involved risk as well. It is the task of planner to take advantage of opportunities and
minimize the risk.

3.     A continuous function – Management is a dynamic process and planning as its function cannot be
an exception to it. More over as plans beget a number of sub-plans and since plans have to be revised in
the light of changing environment, planning becomes a continuous function of Management.

4.     Planning is flexible – As already pointed out, while planning, any one of the available alternatives is
selected. Planning selects the best alternatives based on certain assumptions. There is a possibility of
dead log in the functions of the management. Planning has one more alternative to suit future
situations.

For all managerial functions – Planning is a pervasive function of management. It is found at all levels
and all departments of an organization. Top management looks after strategic planning. It involves
choosing the future course of action from among alternatives.

Nature / Characteristics of Planning

The main characteristics or nature of planning is given below:

ADVERTISEMENTS:

Planning is an Intellectual Process

Planning is an intellectual process of thinking in advance. It is a process of deciding the future on the
series of events to follow. Planning is a process where a number of steps are to be taken to decide the
future course of action. Managers or executives have to consider various courses of action, achieve the
desired goals, go in details of the pros and cons of every course of action and then finally decide what
course of action may suit them best.

Planning Contributes to the Objectives

Planning contributes positively in attaining the objectives of the business enterprise. Since plans are
there from the very first stage of operation, the management is able to handle every problem
successfully. Plan try to set everything right. A purposeful, sound and effective planning process knows
how and when to tackle a problem. This leads to success. Objectives thus are easily achieved.

ADVERTISEMENTS:

Planning is a Primary Function of Management

Planning precedes other functions in the management process. Certainly, setting of goals to be achieved
and lines of action to be followed precedes the organization, direction, supervision and control. No
doubt, planning precedes other functions of management. It is primary requisite before other
managerial functions step in. But all functions are inter-connected. It is mixed in all managerial functions
but there too it gets precedence. It thus gets primary everywhere.

A continuous Process

Planning is a continuous process and a never ending activity of a manager in an enterprise based upon
some assumptions which may or may not come true in the future. Therefore, the manager has to go on
modifying revising and adjusting plans in the light of changing circumstances. According to George R.
Terry, “Planning is a continuous process and there is no end to it. It involves continuous collection,
evaluation and selection of data, and scientific investigation and analysis of the possible alternative
courses of action and the selection of the best alternative.

Planning Pervades Managerial Activities

From primary of planning follows pervasiveness of planning. It is the function of every managerial
personnel. The character, nature and scope of planning may change fro personnel to personnel but the
planning as an action remains intact. According to Billy E. Goetz, “Plans cannot make an enterprise
successful. Action is required, the enterprise must operate managerial planning seeks to achieve a
consistent, coordinated structure of operations focused on desired trends. Without plans, action must
become merely activity producing nothing but chaos.”

Role, Significance, Importance & Advantages of Planning

An organisation without planning is like a sailboat minus its rudder. Without planning, organisation, are
subject to the winds of organizational change. Planning is one of the most important and crucial
functions of management. According to Koontz and O’Donnell, “Without planning business becomes
random in nature and decisions become meaningless and adhoc choices.” According to Geroge R. Terry,
“Planning is the foundation of most successful actions of any enterprise.” Planning becomes necessary
due to the following reasons:

Reduction of Uncertainty

Future is always full of uncertainties. A business organisation has to function in these uncertainties. It
can operate successfully if it is able to predict the uncertainties. Some of the uncertainties can be
predicted by undertaking systematic. Some of the uncertainties can be predicted by undertaking
systematic forecasting. Thus, planning helps in foreseeing uncertainties which may be caused by
changes in technology, fashion and taste of people, government rules and regulations, etc.

Better Utilization of Resources

An important advantage of planning is that it makes effective and proper utilization of enterprise
resources. It identifies all such available resources and makes optimum use of these resources.

Increases Organizational Effectiveness

Planning ensures organizational effectiveness. Effectiveness ensures that the organisation is in a position
to achieve its objective due to increased efficiency of the organisation.

Reduces the Cost of Performance

Planning assists in reducing the cost of performance. It includes the selection of only one course of
action amongst the different courses of action that would yield the best results at minimum cost. It
removes hesitancy, avoids crises and chaos, eliminates false steps and protects against improper
deviations.

Concentration on Objectives

It is a basic characteristic of planning that it is related to the organizational objectives. All the operations
are planned to achieve the organizational objectives. Planning facilitates the achievement of objectives
by focusing attention on them. It requires the clear definition of objectives so that most appropriate
alternative courses of action are chosen.

Helps in Co-ordination

Good plans unify the interdepartmental activity and clearly lay down the area of freedom in the
development of various sub-plans. Various departments work in accordance with the overall plans of
the organisation. Thus, there is harmony in the organisation, and duplication of efforts and conflict of
jurisdiction are avoided.

Makes Control Effective

Planning and control are inseparable in the sense that unplanned action cannot be controlled because
control involves keeping activities on the predetermined course by rectifying deviations from plans.
Planning helps control by furnishing standards of performance.
Encouragement to Innovation

Planning helps innovative and creative thinking among the managers because many new ideas come to
the mind of  a manager when he is planning. It creates a forward-looking attitude among the managers.

Increase in Competitive Strength

Effective planning gives a competitive edge to the enterprise over other enterprises that do not have
planning or have ineffective planning. This is because planning may involve expansion of capacity,
changes in work methods, changes in quality, anticipation of tastes and fashions of people and
technological changes etc.

Delegation is Facilitated

A good plan always facilitates delegation of authority in a better way to subordinates.

Steps involved in Planning

Planning is a process which embraces a number of steps to be taken. Planning is an intellectual exercise
and a conscious determination of courses of action. Therefore, it requires courses of action. The
planning process is valid for one organisation and for one plan, may not be valid for other organizations
or for all types of plans, because various factors that go into planning process may differ from
organisation to organisation or from plan to plan. For example, planning process for a large organisation
may not be the same for a small organisation. However, the major steps involved in the planning
process of a major organisation or enterprise are as follows:

Establishing objectives

The first and primary step in planning process is the establishment of planning objectives or goals.
Definite objectives, in fact, speak categorically about what is to be done, where to place the initial
emphasis and the things to be accomplished by the network of policies, procedures, budgets and
programmes, the lack of which would invariably result in either faulty or ineffective planning.

It needs mentioning in this connection that objectives must be understandable and rational to make
planning effective. Because the major objective, in all enterprise, needs be translated into derivative
objective, accomplishment of enterprise objective needs a concrete endeavor of all the departments.

Establishment of Planning Premises

Planning premises are assumptions about the future understanding of the expected situations. These
are the conditions under which planning activities are to be undertaken. These premises may be internal
or external. Internal premises are internal variables that affect the planning. These include
organizational polices, various resources and the ability of the organisation to withstand the
environmental pressure. External premises include all factors in task environment like political, social
technological, competitors’ plans and actions, government policies, market conditions. Both internal
factors should be considered in formulating plans. At the top level mainly external premises are
considered. As one moves downward, internal premises gain importance.

Determining Alternative Courses

The next logical step in planning is to determine and evaluate alternative courses of action. It may be
mentioned that there can hardly be any occasion when there are no alternatives. And it is most likely
that alternatives properly assessed may prove worthy and meaningful. As a matter of fact, it is
imperative that alternative courses of action must be developed before deciding upon the exact plan.

Evaluation of Alternatives

Having sought out the available alternatives along with their strong and weak points, planners are
required to evaluate the alternatives giving due weight-age to various factors involved, for one
alternative may appear to be most profitable involving heavy cash outlay whereas the other less
profitable but involve least risk. Likewise, another course of action may be found contributing
significantly to the company’s long-range objectives although immediate expectations are likely to go
unfulfilled.

Evidently, evaluation of alternative is a must to arrive at a decision. Otherwise, it would be difficult to

choose the best course of action in the perspective of company needs and resources as well as
objectives laid down.

Selecting a Course of Action

The fifth step in planning is selecting a course of action from among alternatives. In fact, it is the point of
decision-making-deciding upon the plan to be adopted for accomplishing the enterprise objectives.

Formulating Derivative Plans

To make any planning process complete the final step is to formulate derivative plans to give effect to
and support the basic plan. For example, if Indian Airlines decide to run Jumbo Jets between Delhi an
Patna, obliviously, a number of derivative plans have to be framed to support the decision, e.g., a
staffing plan, operating plans for fuelling, maintenance, stores purchase, etc. In other words, plans do
not accomplish themselves. They require to be broken down into supporting plans. Each manager and
department of the organisation is to contribute to the accomplishment of the master plan on the basis
of the derivative plans.

Establishing Sequence of Activities

Timing an sequence of activities are determined after formulating basic and derivative plans, so that
plans may be put into action. Timing is an essential consideration in planning. It gives practical shape
and concrete form to the programmes. The starting and finishing times are fixed for each piece of work,
so as to indicate when the within what time that work is to be commenced and completed. Bad timing
of programmes results in their failure. To maintain a symmetry of performance and a smooth flow of
work, the sequence of operation shaped be arranged carefully by giving priorities to some work in
preference to others. Under sequence it should be decided as to who will don what and at what time.

Feedback or Follow-up Action

Formulating plans and chalking out of programmes are not sufficient, unless follow-up action is provided
to see that plans so prepared and programmes chalked out are being carried out in accordance with the
plan and to see whether these are not kept in cold storage. It is also required to see whether the plan is
working well in the present situation. If conditions have changed, the plan current plan has become
outdated or inoperative it should be replaced by another plan. A regular follow-up is necessary and
desirable from effective implementation and accomplishment of tasks assigned.

The plan should be communicated to all persons concerned in the organisation. Its objectives and
course of action must be clearly defined leaving no ambiguity in the minds of those who are responsible
for its execution. Planning is effective only when the persons involved work in a team spirit and all are
committed to the objectives, policies, programmes, strategies envisaged in the plan
As you can see from the various answers here, there is no consensus on these terms. Different writers,
consultants, professors of management theory and just about every motivational speaker over the last
50 years who wants to make it big on the circuit has a slightly different meaning for these terms. As a
planning consultant, I have my terms that I use and have stuck to my entire career, but every now and
then I run into a client who wants to use the same terms to denote different things than I do. I always
agree with the client. If they use the term goal to describe something that’s “bigger” than an objective,
fine. If their company’s usage of the terms is the opposite, that’s fine too. I really don’t care, so long as
they are clear about it and use the terms consistently.

Having said that, here’s my answers:

Aim - I don’t use this term in any technical sense as I don’t find it used specifically in the literature much.
It’s just a general term for something you want.

Objective 1.) Chris Smith will design and administer a survey that establishes an accurate baseline of the
market share for our service in Jones County by March 15, 2017.

Objective 2.) Pete Fedink will analyze and recommend to senior management those actions that will
increase our share along with budget needs for staffing, etc. by April 30, 2017.

And so on.

This kind of approach is known by the acronym, MBO, Management by Objectives, popularized by the
management guru, Peter Drucker. Like any other system, it has its limitations and detractors, but it is
still in use more than 60 years after Drucker first described it. Here is a brief history, including pros and
cons.
Understanding the Model
The Vroom-Yetton model is designed to help you to identify the best decision-
making approach and leadership style to take, based on your current
situation. It was originally developed by Victor Vroom and Philip Yetton in their
1973 book, "Leadership and Decision Making."
No single decision-making process fits every scenario. Instead Vroom-Yetton
offers a number of different processes and directs you toward the best one for
your situation. For example, if speed and decisiveness are required then it will
likely point you toward an autocratic process. If collaboration  is what's
needed, then it will nudge you toward a more democratic process.
Researchers have found that managers are more effective, and their
teams more productive and satisfied, when they follow the model. The
simplicity of Vroom-Yetton also means that anyone – from the boardroom to
the factory floor – can use it.
Although a little long-winded at times, it can be particularly helpful in new or
unusual situations. Practice using it, and you'll quickly get a feel for the right
approach to take, whether you're making a decision about a day-to-day issue
or dealing with a more complex problem.

Before you start using the model, you'll need to consider these three factors:

 Decision quality – Sometimes, making the "right" decision is critical, and

you'll need to use a large number of resources (people, time, information, and so
on) to ensure that the action you take has been well thought through and is of high
quality.
 Team commitment – Some of your decisions will have a major impact on
your team, while others will go unnoticed. When a decision will likely impact your
team, it's best to use a collaborative process. This will improve the quality of the
decision, and you'll likely deliver a successful result faster.
 Time constraints – When the issue at hand isn't time sensitive, you have more
"space" to research your options and to include others, which will help to boost the
quality of your decision. If your time is limited, however, it may not be feasible to
include others or to undertake thorough research.
What is it?

Kepner Tregoe decision making is a structured methodology for gathering

information and prioritizing and evaluating it. It was developed by Charles H.
Kepner and Benjamin B. Tregoe in the 1960s.

This is a rational model that is well respected in business management circles. An

important aspect of Kepner Tregoe decision making is the assessment and
prioritizing of risk.

So the idea is not to find a perfect solution but rather the best possible choice,
based on actually achieving the outcome with minimal negative consequences. It
is marketed as a way to make unbiased decisions in that it is said to limit
conscious and unconscious biases that draw attention away from the outcome.

There are four basic steps when using the Kepner Tregoe decision matrix:

Situation appraisal - is used to clarify the situation, outline concerns and choose a
direction

Problem analysis - here the problem is defined and it's root cause determined

Decision analysis - alternatives are identified and a risk analysis done for each

Potential problem analysis - the best of the alternatives is further scrutinized

against potential problems and negative consequences and actions are proposed
to minimize the risk. 

Following the step-by-step approach of Kepner Tregoe decision making allows for
the use of critical thinking skills in considering many possible factors that may be
vital in making the decision.
What is an OODA Loop?

John Boyd developed the OODA Loop based on his experiences as a fighter pilot during the Korean War
and later as an instructor.

This decision making process consists of Observe, Orient, Decide and Act. It is a cyclical model.

By using this OODA Loop you are able to continuously adapt to changing circumstances and use this to
draw on your strengths.

In aerial combat, split-second decisions are crucial. When you respond too late, the enemy gets the
upper hand. We live in a rapidly changing world.

If you do not change with the times, chances are that you will go under.

Interaction with environment

Boyd developed the OODA Loop from this key concept.

This is the process in which an individual or organization responds to an event.

By responding quickly to situations and taking appropriate decisions, you can get ahead of your
opponents.

John Boyd assumed that intelligent organisms and organizations are in constant interaction with their
environment.

According to him, it causes complexity in an organization when managers and employees become
prisoners of their own views.

An organization can only survive if it breaks through this impasse by adapting itself to changing external
conditions.

OODA Loop model

Boyd divided this decision-making process into four interacting and overlapping main processes:

1. Observe

By understanding quickly what is going on, you can observe the changing situation clearly.

You will have to look at yourself and the situation as though you were an outsider and not from your
own point of view.

All senses are used at this stage, as a result of which as much information can be collected as practically
possible.

2. Orient
At this stage you will know what has to be done.

This does not only concern position, but also the possible options you can visualize.

John Boyd distinguishes the following factors that play an important role in this stage including genetic
inheritance, cultural traditions, past experiences, analysis and new information.

Orientation does not only indicate how you see the world, but also what kind of world you are capable
of seeing.

The orientation stage is described as the most important process in the OODA Loop. The information
from step 1 is organized.

3. Decide

This stage is about learning from experiences.

Based on someone’s current mental perspective, they make decisions and determine what actions they
need to take.

The right decision is taken and actions follow from this.

4. Action

The physical execution of the decision is a fact at this stage.

The selected approach is actually carried out.

Experiences and/ or consequences of the approach are forwarded to the first stage, observe, after which
the loop is complete and the cycle starts over again.

It is a very quick process.

The objective is that a potential opponent does not get the chance to complete the loop as well, so that
the opponent is always keeps running behind the facts.

The combination of observation and orientation leads to a decision which in turn leads to action.

And then the cycle starts over again. It is a continuous process in which you should always be on the
alert in a changing environment.

When there is an equilibrium state, there is little chance of survival.

Disadvantages

Unfortunately, John Boyd never wrote down his ideas in articles or a book, but he mentioned them in his
presentations.

This is why there are various interpretations of the OODA Loop.

Although the model is detailed and widely used, it does have certain disadvantages:

The OODA Loop model skips ‘memory’. When a situation has occurred before, the wheel does not have
to be reinvented all over again by going through the OODA Loop again.

The OODA Loop model has not been tested scientifically, so there is no proof that the OODA Loop is
correct.

The OODA Loop does not incorporate an opponent, although we have to reckon with opponents by
being faster than they are.

The OODA Loop model does not include the factor ‘cooperation’ and is based too much on gunfights. By
working with teams in accordance with the OODA Loop model, a new outcome is created. Other factors
will have to play a role too including negotiation, task allocation, hierarchy, human behaviour,
motivation, and so on. These are all factors that affect the decision-making process.