 Elements of Planning

 Forecasting - It is the analysis and interpretation of future in relation to the activities

and working of an enterprise. Business forecasting refers to analysing the statistical data
and other economic, political and market information for the purpose of reducing the
risks involved in making business decisions and long range plans. Forecasting provides a
logical basis for anticipating the shape of the future business transactions and their
requirements as to man and material.
 Setting the Vision, Mission, Philosophy, Goals and Objectives
 The planning Hierarchy

 Sample Mission Statement

 Organizational Philosophy Statement

 Goals/Objectives:The important task of planning is to determine the

objectives of the enterprise. Objectives are the goals towards which all
managerial activities are aimed at. All planning work must spell out in
clear terms the objectives to be realised from the proposed business
activities. When planning action is taken, these objectives are made
more concrete and meaningful. For example, if the organisational
objective is profit earning, planning activity will specify how much profit
is to be earned looking into all facilitating and constraining factors.

 Policies:Planning also requires laying down of policies for the easy

realisation of the -objectives of business. Policies are statements or
principles that guide and direct different managers at various levels in
making decisions. Policies provide the necessary basis for executive
operation. They set forth overall boundaries within which the decision-
makers are expected to operate while making decisions. Policies act as
guidelines for taking administrative decisions.
In a big enterprise, various policies are formulated for guiding and
directing the subordinates in different areas of management. They may
be production policy, sales policy, financial policy, personnel policy etc.
But these different policies are co-ordinated and integrated in such a
way that they ensure easy realisation of the ultimate objectives of
business. Policies should be consistent and must not be changed
frequently.

 Procedures:The manner in which each work has to be done is indicated

by the procedures laid down. Procedures outline a series of tasks for a
specified course of action. There may be some confusion between
 policies and procedures. Policies provide guidelines to thinking and
action, but procedures are definite and specific steps to thinking and
action. For example, the policy may be the recruitment of personnel
from all parts of the country; but procedures may be to advertise and
invite applications, to take interviews and offer appointment to the
selected personnel.
Thus, procedures mean definite steps in a chronological sequence
within the area chalked out by the policies. In other words, procedures
are the methods by means of which policies are enforced. Different
procedures are adopted in different areas of business activities. There
may be production procedure, sales procedure, purchase procedure,
personnel procedure etc.

Production procedure involves manufacturing and assembling of parts;

sales procedure relates to advertising, offering quotations, securing and
execution of orders; purchase procedure indicates inviting tenders,
selecting quotations, placing orders, storing the goods in go-down and
supplying them against requisition to different departments and
personnel procedure is the recruitment, selection and placement of
workers to different jobs.

 Rules:A rule specifies necessary course of action in a particular situation.

It acts as a guide and is essentially in the nature of a decision made by
the management authority. This decision signifies that a definite action
must be taken in respect of a specific situation. The rules prescribe a
definite and rigid course of action to be followed in different business
activities without any scope for deviation or discretion.
Any deviation of rule entails penalty. Rule is related to parts of a
procedure. Thus, a rule may be incorporated in respect of purchase
procedure that all purchases must be made after inviting tenders.
Similarly, in respect of sales procedure, rule may be enforced that all
orders should be confirmed the very next day.

 Develop and Schedule Strategies, programs/projects/activites; setting the time frame

 The planning formula: what, when,where,how, why plus 1more helpful

 Time Management- Time management is the process of organizing and

planning how to divide your time between different activities. Get it
right, and you'll end up working smarter, not harder, to get more done in
less time – even when time is tight and pressures are high. The highest
achievers manage their time exceptionally well
  Time Management Principles
• Determine Priorities.
• Learn to Say No.
• Set Goals.
• Establish Realistic Deadlines.
• Develop Routines and Habits.

 Time Saving Techniques, Devices and Methods to better

use of time
 Schedule Appropriately-Your time log should help you to
identify times when you are most productive and alert.
Plan your most challenging tasks for when you have the
most energy. Block out time for your high priority activities
first and protect that time from interruptions.

Devices and Methods to better use of time

1.Parkinson’s Law- British historian Cyril Northcote Parkinson became famous for the phrase
“work expands so as to fill the time available for its completion.” In other words, the amount of
time you give yourself to complete a specific task is the amount of time it will take you to
complete that task.
How it works:This is not a time management technique per se. It’s a law that, when
understood, can be applied as one of the most beneficial time management methods out there
—but you will have to put in the work. That means working more efficiently in shorter bursts of
time. Here are some time management tips:

 Try working without a computer charger. This will force you to finish a project before your
computer dies.
 Get it done early. Instead of finishing an essay by midnight, try to get it done by noon.
 Set a deadline. Give yourself a set time to do something—and then cut it in half.
 Limit time for tasks. Give yourself only 20 minutes in the morning to answer emails.

Types of people this works for:

 Procrastinators
 People who work well under pressure

2. Time Blocking Method-Inventor Elon Musk is known for being productive. He manages his
time so efficiently that he can work over 80 hours a week and still make time for himself.
What’s his secret? Time blocking.
 How it works:From the moment you wake up, assign each time block in your day to a task.
These tasks can be anything from eating breakfast to studying for a test. Below are the steps
Elon Musk uses to block his time:

1. Divide a piece of paper into two columns. On the left, write down each hour of the day and
create blocks of time such as half-hour or hour chunks.
2. Estimate the time it’s going to take to complete each of your tasks and fit them into your time
blocks.
3. Add buffer times in between each time block to allow for adjustments during the day.

Types of people this works for:

 Working students or parents
 Analytical thinkers

3. Getting Things Done (GTD) Method-Created by author David Allen, this process helps you
get things done by recording tasks on paper and then breaking them down into actionable work
items.
How it works:

1. Capture the actions that have your attention: These actions are tasks that can relate to
anything from work to school to your personal life.
2. Clarify what they mean: Decide whether the tasks that have your attention are actionable or
not. If an item is not actionable, ignore it for now. If the item is actionable, do it, delegate it, or
set it aside.
3. Organize your actions: Prioritize your to do list according to what you need to get done when.
4. Reflect: Review your list of actions frequently to determine your next priority. Cross off tasks
you have accomplished and update your list.
5. Engage: Take the actions or smaller tasks you can complete right now.

 Tools in project management- Project management tools are a set of software designed
to help project teams to plan a project, track & manage the projects to achieve the
defined project goals within the time. It also helps team members to collaborate
effectively and accelerate the projects to meet the specified constraints.

 Gantt Chart- A Gantt chart is a bar chart that illustrates a project

schedule. It was designed and popularized by Henry Gantt around the
years 1910–1915. Modern Gantt charts also show the dependency
relationships between activities and the current schedule status
 A Gantt chart is a project management tool assisting in the planning and
scheduling of projects of all sizes; they are particularly useful for
visualising projects. A Gantt chart is defined as a graphical representation
of activity against time; it helps project professionals monitor progress.

 Performance Evaluation and Review technique (PERT)

A program evaluation review technique (PERT) chart is a graphical
representation of a project's timeline that displays all of the individual
tasks necessary to complete the project.

As a project management tool, the PERT chart is often preferred to the

Gantt chart because it identifies task dependencies. However, a PERT
chart can be more difficult to interpret.

PERT is a method of analyzing the tasks involved in completing a given

project, especially the time needed to complete each task, and to identify
the minimum time needed to complete the total project.

 Critical Path Method (CPM)- The critical path method, or critical path
analysis, is an algorithm for scheduling a set of project activities. A critical
path is determined by identifying the longest stretch of dependent
activities and measuring the time required to complete them from start
to finish.

Summary. The critical path method is a technique that allows you to

identify tasks that are necessary for project completion. The critical path
in project management is the longest sequence of activities that must be
finished on time to complete the entire project.

 Prepare the budget and allocation of resources

 Budgeting- Budgeting is the process of creating a plan to spend your money.
This spending plan is called a budget. Creating this spending plan allows you to
determine in advance whether you will have enough money to do the things
you need to do or would like to do. Budgeting is simply balancing your expenses
with your income.
 Nursing Budget- A nursing budget is a systematic plan that is
informed best estimate by nurse administrators of nursing revenues
and expenses. It projects how revenues will meet expenses and
projects a return on equity or profit.

 Hospital Budget- A healthcare or hospital budget is an estimation of

revenue and expenses over a specified time frame. Through the
healthcare budgeting process, health systems come to an
 understanding of how much funding must be planned in certain areas,
including operating costs and capital equipment.

 Budget Plan- A budget is a plan you write down to decide how you
will spend your money each month. A budget helps you make sure you
will have enough money every month. Without a budget, you might run
out of money before your next paycheck. A budget shows you: how
much money you make.

 4 components
 Revenue Budget- consists of the revenue receipts of
the government (tax revenues and other revenues) and
the expenditure met from these revenues. Description:
Tax revenues comprise proceeds of taxes and other
duties levied by the Union.

The revenue budget consists of revenue receipts of the

government (revenues from tax and other sources), and
its expenditure. Revenue receipts are divided into tax
and non-tax revenue. Tax revenues are made up of
taxes such as income tax, corporate tax, excise, customs
and other duties that the government levies.

 Expense Budget- Expenditure Budget shows the

revenue and capital disbursements of various
ministries/departments and presents the estimates in
respect of each under 'Plan' and 'Non-Plan'. Description:
It gives a detailed analysis of various types of expenditure
and broad reasons for the variations in estimates.

 Capital Budegt- A capital budget is a long-term plan that

outlines the financial demands of an investment,
development, or major purchase. As opposed to an
operational budget that tracks revenue and expenses, a
capital budget must be prepared to analyze whether or
not the long-term endeavor will be profitable.

A simple method of capital budgeting is the Payback

Period. It represents the amount of time required for
the cash flows generated by the investment to repay
the cost of the original investment. For
example, assume that an investment of $600 will
 generate annual cash flows of $100 per year for 10
years.

 Cash Budget - A cash budget is an estimation of the cash

flows of a business over a specific period of time. This could
be for a weekly, monthly, quarterly, or annual budget. This
budget is used to assess whether the entity has sufficient cash
to continue operating over the given time frame.

Ultimately a cash budget is used to determine whether the

business has enough cash for operating expenses during
the specified time period. It's also a plan for the most important
factor of a company's viability – its cash position.

 Types of Budgeting

 Centralized Budget- Centralized districts create and implement specific

processes that often detail what can be bought, how it needs to be
requested, and how it gets billed to better manage spending and budget
tracking. In centralized organizations, strategic planning, goal setting,
budgeting, and talent deployment are typically conducted by a single, senior
leader or leadership team. In contrast, in decentralized organizations,
formal decision-making power is distributed across multiple individuals or
teams.

If you have multiple budgets to manage, a centralized budget can help you
ensure consistency throughout them all. This could be as simple as maintaining
the right formatting in each spreadsheet, or it could be as complex as ensuring
that the correct tax laws are taken into account by each branch of your
company.

 Decentralized Budget- Decentralized budgeting empowers principals and

other department leaders to make decisions about how to best allocate
resources to meet school and district goals.

 Components of Total institutional Budget

 Manpower Budget- The manpower budget is prepared by estimating the

number of employees required to carry out the operations of a cost center.
This estimate is based on an analysis of the work to be done and the
resources currently available to do it.
  Capital Expenditure Budget- A capital expenditure budget is a formal plan
that states the amounts and timing of fixed asset purchases by an
organization. This budget is part of the annual budget used by a firm, which
is intended to organize activities for the upcoming year.Capital expenditure
budget covers longer term asset and project costs. Financial budgets deal
with cash flows and company financial data.

 Operating Budget- An operating budget is a comprehensive estimate of an

organization, company, or institution's revenue and expenses over a
specified period of time. This budget is usually prepared in advance as a goal
or a plan of what to expect during the specified reporting period.

 Types of Institutional Budget Depending on Management Philosophy

 Open Ended Budget- This is a financial plan in which each operating

manager presents a single-cost estimate for the optimal activity level for
each programme in the unit.

 Fixed Ceiling Budget- the maximum amount that the government allocates
in a given year to target sector or expenditure category.

 Flexible Budget- Flexible budgets are essentially budgets that can be

adjusted depending upon revenue and cost changes throughout the fiscal
year, accounting for expected unpredictability. Companies first account for
the fixed costs they expect, or at least costs that they don't expect to
change as the year progresses.

 Performance Budget- A performance budget is a budget that refers to

programs, functions, and performance that reflects the estimated expenses
and revenues of the companies, Government, or Statutory bodies. It is a
budget that provides the objective and purpose for raising funds and
proposed activities and programs to be accomplished.

 Program Budget-A program budget defines objectives and relates the

proposed level of expenditures to meet those objectives in the given fiscal
year.A good example of program budgeting in the context of a sport
organization occurs when calculations are made to find the probable
revenues and costs associated with providing coaching, clothing,
competition fixtures and pitches to all junior members of a football club for
a season.

 Zero Based Budget- Zero-based budgeting (ZBB) is a budgeting process that

allocates funding based on program efficiency and necessity rather than
budget history. 1 As opposed to traditional budgeting, no item is
automatically included in the next budget.

 Sunset Budget- The zero-based budget is known as the Sunset Budget

System. This means before sunset of the financial year every
department has to submit a zero-based budget. It contains details of
the activities of each department. Zero Based budgeting was developed
in 1969 by Peter Pyre of the USA.

Zero-based budgeting (ZBB) is a method of budgeting in which all

expenses must be justified for each new period. The process of zero-
based budgeting starts from a "zero base," and every function
within an organization is analyzed for its needs and costs.