UNIT -2 PLANNING

SUBJECT-

FUNDAMENTAL OF MANAGEMENT
 Concept of Planning

Planning is based on the theory of “thinking before acting”.

Planning is an integral part of our life. We make plans in each
and every step of life whether it be to go to school or to buy
household goods during shopping. We make plans according
to the limitations of our budget and resources to get maximum
satisfaction and to fulfill goals from our activities.
According to Theo Haimann, “Planning is deciding in
advance, what is to be done. When a manager plans, he
projects a course of action for the future, attempting to
achieve a consistent, coordinated structure of operations
aimed at the desired results.”

According to Alford and Beaty, “Planning is the

thinking process, the organized foresight, the vision
based on fact and experience that is required for
intelligent action.”

According to ME. Hurley, “Planning is deciding in

advance what is to be done. It involves the selection of
objectives, policies, procedures, and programs from
among alternatives.”
► Feature of Planning in Management
On the basis of the definition of planning. Its following
features can be identified:
planning is goal-oriented
planning is a primary function
planning is all-pervasive.
planning is a brain exercise
It is a continuous process.
It involves decision-making.
planning is forward-looking
planning is dynamic
planning is an integrated process
It includes efficiency and effectiveness dimension
Types of Planning
Operational Plan:
Operational plans are the plans which are formulated by
the lower level management for a short term period of up
to one year. It is concerned with the day to day
operations of the organization. It is detailed and specific.
It is usually based on past experiences. It usually covers
functional aspects such as production, finance, human
resources, etc.

Tactical Plan:
The tactical plan is the plan which is concerned with the
integration of various organizational units and ensures
implementation of strategic plans on day to day basis. It
involves how the resources of an organization should be
used in order to achieve strategic goals. The tactical
Strategic Plan:
A strategic plan is a plan which is formulated by top-level
management for a long period of time of five years or
more. They decide the major goals and policies to
achieve their goals. It takes in a note of all the external
factors and risks involved and makes a long-term policy
of the organization. It involves the determination of
strengths and weaknesses, external risks, missions, and
control systems to implement plans.
Planning Objectives and Benefits
The main benefits and objectives of planning are as
follows:
Planning increases the efficiency of an organization.
It reduces the risk factors in modern business
activities.
It facilitates proper coordination within an organization.
It aids in organizing all available resources.
It provides the right direction to the organization.
It identifies future opportunities and threats.
It is important to maintain good control.
It helps to fulfill the objective of the organization.
It motivates the personnel of an organization.
It encourages managers’ creativity and innovation.
It also helps in decision-making.
(1) Primary Function
Planning is the primary function of management. It
precedes all other management functions. Without
setting the goals to be achieved and line of action to be
followed there is no meaning of organizing, leading or
controlling the activities of an organization. In fact, all
other functions of management largely depend upon
planning. It sets all other functions into action. Hence, it
is the basic function of management.
(2) Pervasiveness of Planning
Planning is a pervasive activity. Managers at all levels of
organization perform the planning function. However, the
nature and scope of planning may differ at various levels
of management Top management looks after strategic
planning.
(3) Focus on Objectives
A plan must focus on accomplishing certain
objectives/goals. It identifies the actions that would lead
to the desired objectives quickly and economically.
Planning cannot be imagined without objectives.

(4) Future-Oriented
Planning is always future-oriented because it is done for
the future. It decides in the present what is to be done in
the future. It is based on forecasting and a plan is a
synthesis of forecasts. Thus, planning is based on
farsightedness, which is forward looking in nature.
(5) Selective Process
planning is essentially a process of choosing among
alternatives. It is concerned with decision-making
relating to
what is to be done,
how it is to be done
when it is to be done, and
by whom it is to be done.
(6) Intellectual Process
Planning is a intellectual process, which involves
creative. thinking and. imagination. Managers have to
consider various courses of action, go in detail the pros
and cons of every course of action and then finally
decide which course of action may suit them best.
(7) Continuous Process
Planning is a continuous and never ending process of a
manager in an organization. The manager plans on the
basis of some assumptions, which may not come true in
the future. Therefore, he has to go on modifying, revising
and adjusting plans in the light of changing environment.
A manager cannot plan once for all.

(8) Increases Efficiency

Planning aims to increase the efficiency of the
organization at all levels. The guiding principle of a good
plan is the maximum output and profit at the minimum
cost. Planning helps in the utilization of resources and
reducing wastage.
Planning Leads To Rigidity
In an organization, a well defines plan is drawn up with
specific goals to be achieved with a specific time frame.
These management planning examples then decide the
future course of action and managers may not be in a
position to change it.

Planning May Not Work In A Dynamic

Environment
The business environment is dynamic and nothing is
constant. The organization has to constantly adapt itself
to changes. Management planning examples becomes
difficult to accurately assess future trends if the
economic policies are modified or political conditions in
the country change or there is a natural calamity.
Planning Reduces Creativity
Planning is an activity that is done by the top
management. Usually, the rest of the members just
implement these plans as a consequence, middle and
other levels are neither allowed to deviate from plans nor
are they permitted to act on their own.
Planning Involves Huge Costs
When plans are drawn up huge costs are involved in
their formulation. These may be in terms of time, money
and efforts.
Planning Is A Time-Consuming Process
Planning is a lengthy process that involves many steps.
Lots of information is required and it takes time to
collect, analyse, compare, evaluate, and choose among
alternatives.
False Sense Of Security
The success of an enterprise is possible only when
plans are properly drawn and implemented. Managers
have a tendency to rely on previously tried and tested
successful plans. It is not always true that just because
management planning examples have worked before it
will work again.

Psychological Barriers
Planning sometimes fails due to mental block in the
minds of lower levels. Managers take more interest in
the present than the future and ignore some important
aspects of management planning examples. Also, they
resist changes that introduce by plans and don’t
implement the plans correctly. They take plans lightly
PROCESS OF
PLANNING
1] Recognizing Need for Action
An important part of the planning process is to be aware
of the business opportunities in the firm’s external 
environment as well as within the firm. Once such
opportunities get recognized the managers can
recognize the actions that need to be taken to realize
them. A realistic look must be taken at the prospect of
these new opportunities and SWOT analysis should be
done.
2] Setting Objectives
This is the second and perhaps the most important step
of the planning process. Here we establish the
objectives for the whole organization and also individual
departments. Organizational objectives provide a
general direction, objectives of departments will be more
planned and detailed.
3] Developing Premises
Planning is always done keeping the future in mind,
however, the future is always uncertain. So in the
function of management certain assumptions will have to
be made. These assumptions are the premises. Such
assumptions are made in the form of forecasts, existing
plans, past policies, etc.

4] Identifying Alternatives
The fourth step of the planning process is to identify the
alternatives available to the managers. There is no one
way to achieve the objectives of the firm, there is a
multitude of choices. All of these alternative courses
should be identified. There must be options available to
the manager.
5] Examining Alternate Course of Action
The next step of the planning process is to evaluate and
closely examine each of the alternative plans. Every
option will go through an examination where all there
pros and cons will be weighed. The alternative plans
need to be evaluated in light of the organizational
objectives.

6] Selecting the Alternative

Finally, we reach the decision making stage of the
planning process. Now the best and most feasible plan
will be chosen to be implemented. The ideal plan is the
most profitable one with the least amount of negative
consequences and is also adaptable to dynamic
situations.
7] Formulating Supporting Plan
Once you have chosen the plan to be implemented,
managers will have to come up with one or more
supporting plans. These secondary plans help with the
implementation of the main plan. For example plans to
hire more people, train personnel, expand the office etc
are supporting plans for the main plan of launching a
new product.
8] Implementation of the Plan
And finally, we come to the last step of the planning
process, implementation of the plan. This is when all the
other functions of management come into play and the
plan is put into action to achieve the objectives of the
organization. The tools required for such implementation
involve the types of plans- procedures, policies, budgets,
rules, standards etc.
Planning Provides Direction
Planning provides direction for actions by deciding in
advance what is to be done and how. It ensures that
goals and targets are clearly stated so that employees
are aware of exactly what to do. Management planning
examples ensures unity of direction and coordination of
individual efforts. It helps the organization in keeping on
the right track and move in the right direction.

Reduces The Risk Of Uncertainty

Managers predict the future while doing planning and the
future holds uncertainties. There can be opportunities or
risks in future. If they predict any opportunity so they
prepare to avail them and if they have any likely risks so
they try to minimize them.
Planning Reduces Wasteful Activities And
Overlapping
Other importance of planning in management is that it
serves as the basis of the coordination of individual
efforts. It helps in avoiding confusion and duplication.

Promotes Innovative Ideas

It is often thought that management planning examples
should be followed as it is by the subordinates and they
are not allowed to deviate from it. While the case is a
little different as the managers are required to modify the
given plans according to the changes in the business
environment.
Establishing Standards For Controlling
Planning involves setting goals and standards against
which the actual performance of workers is compared.
Managers can find out if they have achieved the required
target.

Planning Facilitates Decision Making

Managers face many alternative options while making
plans. They identify all the alternatives, compare and
evaluate them to make a suitable choice. Thus
management planning examples are said to be
facilitating decision making.
1. Critical Path Analysis
Planning a simple project has its hurdles to clear: but
when that project is complex, then planning can feel
almost insurmountable. That’s where a planning
technique such as critical path analysis comes in handy

2. Brainstorming
Brainstorming can be looked at as the plan before the
plan. A plan for anything is a way to organize an
approach. But before that can be done well, the project
must be clearly understood and the various techniques
to manage it examined.
3. Work Breakdown Structure
Another great project planning method is the work
breakdown structure (WBS), which is a way to rank
tasks in the project. Again, when a project is great in
scope it helps to get a handle on it, which is where the
WBS comes in. As the name implies, the WBS breaks
down the larger project into manageable tasks. It’s like
putting something in a crucible and breaking it down to
its primary elements.

4. Gantt Chart
The old standby for project planning is the Gantt chart.
For decades, the Gantt chart has been included in the
feature set of a slew of project management software
platforms, which has given it a flexibility that emphasizes
5. Cause and Effect Diagram
The cause and effect diagram has a central backbone
from which bones are drawn that represent any major
factor that might impact the final outcome of the project.
It can be used to take those issues that came up during
a brainstorming session and organize them.

6. PERT
Program evaluation and review technique or PERT is a
tool to help project managers estimate the amount of
time a project will likely take. Scheduling is one of the
pillars of planning techniques, so you can see the
importance of having a planning method like PERT to
make your schedule more accurate.
7. SMART Goals
Another acronym that can help with your planning
methods is SMART, which stands for specific,
measurable, attainable, relevant and time bound. What
SMART does when in the planning process of a project
is making sure, before you start, that your goals fit within
the SMART criteria.
That means that they should be specific, as in clear and
concise. They must also be measurable, so you can
quantify your project. Attainable is obvious, in that if the
project is a pie-in-the-sky impossibility then the odds are
it’s going to fail.