NAME = Rohit Mali

ROLL NO.= 69
DIV. NO. = B

Q1. What is planning? State nature and benefits of

planning.

Planning is the proper allocation of resources ,time ,machinery

for
efficient functioning organization. It is the most basic of all the
managerial functions.
It involves selecting missions and objectives and the actions to
achieve them.
It determine a course of action, that involves-
a. Establishing Purpose –

The work managers do to discover a vision of the future;

b. Setting Goals –
The work managers do to determine the end results to be
accomplished;
c. Creating Plans –
The work of sequencing tasks to accomplish goals.
Thus planning is an activity where goals are set, resources are
allocated
and achieved on predetermined path. Thus plan is a
predetermined
course of action, which emerges as an outcome of planning
process.
Different management scientists have defined the ‘planning’
differently.
-“Planning is anticipating” – Earl Strong.

-“Planning is the thinking process, the organized forecast, the

vision based on fact and experience that is required for
intelligent action.” – Alfred and Beaty.
- “Management planning involves the development of forecasts,
objectives, policies, programs, procedures, schedules, and
budgets” – Louis A. Allen.

1) Planning is goal oriented :

Plans arise from objectives. Objectives provide guidelines for
planning.
2) It is primary function :
Planning provides basis foundation from which all future
management
functions arise.
3)It is persuasive :
It is not an exclusive function of any management level or
department.
Managers have to plan for every change that occurs in an
organization.
4) It is mental activity :
Planning is a mental process involving - imagination,
foresightedness
and sound judgement. Plans are based on careful analysis of
internal and
external factors influencing business activities.
5) It is a continuous process :
It is an ongoing process of adapting the org. with the changes
in business
environment. Since a business exist in dynamic environment it
is
necessary to continuously plan based on changing business
needs &
situations.
6) It is flexible :

Planning is based on future forecast of events & situations.

Since futureis
uncertain, plans are flexible enough to adapt with future change
of
events.
-
1. Attention on Objectives:
Planning helps in clearly laying down objectives of the
organization. The
whole attention of management is given towards the
achievement of
those objectives. There can be priorities in objectives, important
objectives to be taken up first and others to be followed after
them.
2. Minimizing Uncertainties:
Planning is always done for the future. Nobody can predict
accurately
what is going to happen. Business environments are always
changing.
Planning is an effort to foresee the future and plan the things in
a best
possible way.
3. Better Utilization of Resources:
Another advantage of planning is the better utilization of
resources of
the business. All the resources are first identified and then
operations
are planned. All resources are put to best possible uses.
4. Economy in Operations:
The objectives are determined first and then best possible
course of
action is selected for achieving these objectives. The
operations selected
being better among possible alternatives, there is an economy
in
operations. The method of trial and error is avoided and
resources are
not wasted in making choices.
Q2.Essential features of good plan.

Nine Basic Features of a Good Management Plan are:

1. It should define objectives:
Objectives are the ultimate goals towards which all activities
are
directed. A statement which lays down objectives should be
clear and
definite and everyone in the organization should understand it
in the
same sense.

2. It should be simple:
If a plan is expressed in a language which is not
understandable by the
personnel of the concern or it is complicated, it may create
problems for
those who are to actually put it into action.
3. It should be clear:
A good plan must not contain anything that is ambiguous or
indefinite.
4. It should be comprehensive:
A good plan should contain all that is necessary for the
attainment of the
objectives of the enterprise. If a master plan is prepared for the
whole
organization it will be more useful as it can be seen that nothing
is left
from it.

5. It should be flexible:
A flexible plan adjusts the changes in the plans without any
delay. Hence
a plan must not be rigid. A plan should be broad enough to
meet the
future challenges and uncertainties.
6. It should be economical:
A plan should be made keeping in mind the
resources available with the concern and making optimum
utilisation of

the available resources. In other words, a plan must recover its

cost and
should result in the least operating cost.
7. It should establish standards:
A plan must lay down the standards to be achieved. The actual
performance is compared with these standards and deviations
if any are
noted.

8. It should be balanced:
It is necessary ensure that there is a proper coordination
between
different types of plans such as short-term and long term plans,
“plans of
different departments etc. A business enterprise usually has a
number of
department’s viz., production, marketing, finance etc. Each
department
frames its own plans. It is for the management to see that all
these plans
are well balanced.

9. It should be practicable:
A plan is worth only if it is practically workable and realistic. It
should be
formulated keeping in view the limitations of planning. If a plan
is good
in theory but bad in practice, it is of no use. Similarly, if the
desired
results are not achieved by a plan, it leads to frustration at all
levels in
the organization.

Q.3) Principles and Steps in Planning.

Organizations have goals they want to achieve, so they must

consider the
best way of reaching their goals and must decide the specific
steps to be
taken. However, this is not a linear, step-by-step process. It is
an iterative
process with each step reconsidered as more information is
gathered. As
organizations go through the planning, they may realize that a
different
approach is better and go back to start again. Remember that
planning is

only one of the management functions and that the functions

themselves
are part of a cycle. Planning, and in fact all of the management
functions,
is a cycle within a cycle. For most organizations, new goals are
continually being made or existing goals get changed, so
planning never
ends. It is a continuing, iterative process.

1. Establishing Objectives:
Establishing the objectives is the first step in planning. Plans
are
prepared with a view to achieve certain goals. Hence,
establishing the
objectives is an important step in the process of planning. Plans
should
reflect the enterprise’s objectives. Objectives should clearly
define as to
what is to be achieved by policies, procedures, rules,
strategies, budgets
and programs. Plan must make sure that every activity
undertaken
contributes to the achievement of objectives.
The objectives fixed must clearly indicate what is to be
achieved, where
action should take place, who is to perform it, how it is to be
undertaken
and when it is to be accomplished. That is, managers should be
able to
restate the objectives of the firm in definite and clear terms that
will
motivate examination and evaluation of performance against
targeted
performance in the plan. Objectives should be measurable.
2. Determining Planning Premises
This is the second step in planning. Premises include actual
forecast data,
policies and plans of the enterprise. Planning involves looking
into the
future which necessitates the enterprise to know, how future
conditions
will affect its activities. Thus, forecasting is an important step in
planning. There are two types of forecasting namely,

service
dealt with by the enterprise.

Keeping the general economic conditions in mind, a study of

the industry
is made. Then the manager proceeds to make a study of his
company’s
share of the market. Forecasting will reveal those areas where
control is
lacking. Planning will be reliable when the forecast methods are
accurate. Hence, the success of the planning depends very
much upon the
forecasts.

3. Determining Alternative Courses

Determining alternative courses is the third step in the planning
process.
The planner should study all the alternatives, consider the
strong and
weak points of them and finally select the most promising ones.
4. Evaluating Alternative Courses
Alternative courses so selected should be evaluated in the light
of
premises and goals. Evaluation involves the study of
performance of
various actions. Various factors such as profitability, investment
requirements, etc., of such alternatives should be weighed
against each
other. Each alternative should be closely studied to determine
its
suitability.
Many other factors such are uncertain future trend, problems
faced
financially, future uncertainties renders the evaluation process,
complex
and difficult. Usually, alternative plans are evaluated against
factors such
as cost, risks, benefits, organizational facilities, etc. Computer
based
mathematical plans and techniques can also be utilized to
identify best
course of action.

5. Selecting the Best Course

After having evaluated the various alternatives, the most
suitable
alternative is selected. With this, the plan can be considered to
have been
adopted. It is exactly the point at which decisions are made.
Sometimes,
in the best interests of the enterprise, several alternative
courses can be
adopted.

6. Formulating Derivative Plans

The main plan should be supported by a number of derivative
plans.
Within the framework of a basic plan, derivative plans are
formulated in
each functional area. Segregation of master plan into
departmental,
sectional and individual plans, helps to understand the real
nature of
future uncertainties. To make the planning process more
effective, it
should also provide for a feedback mechanism. These plans
are meant
for the implementation of the main plan.
7. Implementation of Plans
Implementation of plans is the final step in the process of
planning. This
involves putting the plans into action so as to achieve the
business
objectives Implementation of plans requires establishment of
policies,
procedures, standards, budgets, etc.

Q.4) Process and Techniques Forecasting.

In preparing plans for the future, the management authority has
to make
some predictions about what is likely to happen in the future. It
shows
that the managers know something of future happenings even
before
things actually happen.
Since planning is “a systematic economic and rational way of
making
decisions today that will affect tomorrow”, then forecasting
becomes an
integral part of the planning process, specially, strategic
planning which
is long-range in nature.
Lyndall Unrwick defined forecasting as, it is involved to some
extent in
every conceivable business decision. The man who starts a
business is
making an assessment of a future demand of its products.

Forecasting technique can be classified into two major

categories:
1. Qualitative forecasting technique :-

i. Jury or Executive Opinion :

The jury of expert opinion sometimes referred to as the Dolphin
technique; involves soliciting opinions or estimates from a panel
of “experts” who are knowledgeable about the variable being
forecasted.
In addition to being useful in the creation of a sales or demand
forecast
this approach is used to predict future technological
developments. This
method is fast less expensive and does not depend upon any
elaborate
statistics and brings in specialized viewpoints.
ii. Sales Force Estimates :
This approach involves the opinion of the sales force and these
opinions
are primarily taken into consideration for forecasting future
sales. The
sales people, being closer to consumers, can estimate future
sales in their
own territories more accurately. Based on these and the
opinions of sales
managers, a reasonable trend of the future sales can be
calculated.
These forecasts are good for short range planning since sales
people are
not sufficiently sophisticated to predict long-term trends. This
method
known as the “grass roots” approach ends itself to easy
breakdowns of
product, territory, customer etc.,
iii. Customer Expectations :
This type of forecasting technique is to go outside the company
and seek
subjective opinions from customers about their future
purchasing plans.
Sales representatives may poll their customers or potential
customers
about the future needs for the goods and services the company
supplies.
Direct mail questionnaires or telephone surveys may be used to
obtain
the opinions of existing or potential customers. This is also
known as the
“survey method” or the “marketing research method” where
information
is obtained concerning.

2. Quantitative forecasting technique :-

Quantitative techniques are based on the analysis of past data
and its
trends. These techniques use statistical analysis and other
mathematical
models to predict future events.
Some of these techniques are:
i. Time series analysis :
Time series analysis involves decomposition of historical series
into its
various components, viz., trend, seasonal variations, cyclical
variations
and random variations. Time series analysis uses index
numbers but it is
different from barometric technique. In barometric technique,
the future
is predicted from the indicating series, which serve barometers
of
economic change.
In time series analysis, the future is taken as some sort of an
extension of
the past. When the various components of a time series are
separated,
the variations of a particular phenomenon, the subject under
study stay
say price, can be known over the period of time and projection
can be
made about future.
ii. Economic models :
Utilize a system of interdependent regression equations that
relate
certain economic indicators of the firm’s sales, profits etc. Data
center or
external economic factors and internal business factors
interpreted with
statistical methods. Often companies use the results of national
or
regional econometric models as a major portion of a corporate
econometric model.
While such models are useful in forecasting, their major use
tends to be
in answering “what if”? Questions. These models allow
management to
investigate and in major segments of the company’s business
on the
performance and sales of the company.

iii. Regression analysis :

Regression Analysis are statistical equations designed to
estimate some
variables such as sales volume, on the basis of one or more
‘independent’
variables believed to have some association with it.

Q.5) Procedure and Premises of Planning.

As planning is an activity, there are certain reasonable

measures for
every manager to follow:
(1) Setting Objectives

specifies
the objective of an organization, i.e. what an organisation wants
to
achieve.
achieve
by its operations.
measurable in terms of units.

(2) Developing Planning Premises

certain
events which are expected to affect the policy formation.

adversely if ignored.

effective planning.

are
drawn and are known as planning premises.

(3) Identifying Alternative Courses of Action

(4) Evaluating Alternative Course of Action

 In this step, the positive and negative aspects of each
alternative
need to be evaluated in the light of objectives to be achieved.

risks,
and higher returns, within the planning premises and within the
availability of capital.

(5) Selecting One Best Alternative

minimum
negative effects, is adopted and implemented.

play an
important role in selecting the best alternative.

(6) Implementing the Plan

the
picture.

the
employees
clearly to convert the plans into action.

(7) Follow Up Action

intervals is called follow-up.

are
being implemented according to the schedule.

standards
are done to ensure that objectives are achieved.

Planning Premises :
Planning is made for the future. Future is uncertain the
management
makes certain assumptions about the future. The assumptions
are not to
be based on hunch or guess work. It should be developed
through
scientific forecasting of future events.
They provide the bedrock upon which future course of action is
based.
To have effective planning, plans must be based on sound
premises.
Therefore premises are to be established on the basis of
systematic
forecasting. Effective planning is largely dependent on the
correct
knowledge and choice of planning premises.
A manager must consider these forces and factors while
formulating
premises. Such forces may be internal or external. The
manager is to
recognize the strategic, crucial and limiting factors. Based on
this the
manager is to select the proper and adequate premises upon
which the
super structure of planning are to be raised.

Planning premises may be classified as:

(a) Internal and external
(b) Tangible and Intangible

(c) Controllable, semi-controllable and uncontrollable

(d) Constant and variable
(e) Foreseeable and unforeseeable