Planning

Unit -2

Introduction

The necessity for planning arises because of the fact that

business organizations have to operate, survive &
progress in a highly dynamic economy where change is
the rule, not the exception.
Some of the important forces of change may be changes
in technology, changes in population & income
distribution, changes in competition, changes in the tastes
of consumers, changes in government policies.
These changes often give rise to innumerable problems &
throw countless challenges.

Continue

Managers charged with the responsibility of achieving

definite targets, do no wait for future, they make the
future.
They introduce original action by removing present
difficulties, anticipating future problems, changing the
goals to suit the internal & external changes.
Experiment with creative ideas & take the initiative,
attempting to shape the future & create a more desirable
environment.

Meaning of Planning

A plan is a forecast for accomplishment. It is a

predetermined course of action. It is todays projection for
tomorrows activity.
In other words, to plan is to produce a scheme for future
action, to bring about specified results at a specified costs,
in a specified period of time.
Planning is deciding in advance what to do, how to do it,
when to do it & who is to do it.
Planning is the beginning of the process of management.

Nature of planning

Planning is the most basic function of

management. It is referred to as deciding
in advance as to what o do, how to do,
when to do & who has to do it etc. it is an
intellectual process, which requires a
manger to think before acting. It is nothing
but thinking in advance. As regarded by
koontz & ODonnell, planning is a
continuous process.

Importance of planning

Minimizes Risk & uncertainty

Leads to success
Focuses attention on the organization goals
Facilitates control
Trains executives

Purpose of Planning process

Select from many available alternative so as to achieve

the objectives of the enterprise, economically, effectively
& efficiently.
To direct all other functions of management
To set up goals
To help planned goals of an enterprise
To form the basis for budget
To forecast the future to avoid uncertainty & change
To provide effective control
To search for alternative & adopt the best way of
accomplishing the work
To focus the vision on the objective & goals

Objective

Objectives are multiple in number

Objective are either tangible or intangible
Objectives have a priority
Objectives are generally arranged in hierarchy
Objectives sometimes clash with each other
Objectives must be both clear & acceptable
Objectives must support one another
Objectives must be precise & measurable
Objectives should always remain valid.

Types of plan

Strategic planning (Long range planning)

Tactical planning (Short range planning)
Standing planning (policies, procedures,
methods & rules)
Single use plans( programmes & Budget)

Types of Plans
Type of
Plan

Time
Frame

Specificity

Frequency
of Use

Strategic

Long Term

Directional

Single Use

Tactical

Short Term

Specific

Standing

Operational

Ongoing

Very
detailed

Day-to-day

Policies,
procedures,
and rules

Varies

Varies

Varies

Decision making

Planning is an intellectual process, which

requires a manger to think before acting.
Through planning, managers of any
organization decide what to do, when to
do, how to do & who has to do. Hence
decision making is an integral part of
planning. It is defined as the process of
choosing among alternative. It occurs at
many stages of planning process.

Cont.

Types of decisions

Programmed / pragmatic & non programmed/

non-pragmatic decisions
Individual & group decisions
Major & Minor decisions
Routine & Strategic decision
Simple & complex decisions
Temporary & Permanent Decision

Decision Making Process

Recognition of problem
Deciding priorities among problems
Problem diagnosis
Development of alternative solutions
Studying & comparing the affect of
alternatives
Implement the decision into action
Study the result

Steps in planning & planning premise

Establishing verifiable goals or set of goals to be achieved
Establishing planning premises
Internal & external premises
Tangible & intangible premises
Controllable & non controllable premises
Deciding the planning period
Lead time in development & Commercialization of a new product
Time required to recover capital investment or the pay back period
Length of commitments already made
Finding alternative courses of action
Evaluating & selecting a course of action
Developing derivative plans
Measuring & controlling the progress

Limitation

Expensive
Time consuming process
Restriction / limit
Delay in decision making
Not flexible
Difficulty of formulating accurate premises

Hierarchy of plans
Goals
&
objective

STRATEGIES
Single use plans

Top Management

Middle Management

Standing plans

Action plans

Low Management