Planning

• Beginning of the process of management.

• It is the most basic function of management.
• Think before action, thinking in advance.
• Without planning other functions become
mere activity, producing nothing but chaos.
(principle of primacy of planning).
• Planning involves giving emphasis to 3 major
sub systems.
• Environmental subsystem: population
changes, anticipated government changes,
international developments etc.
• Competitive sub system: actions of
competitors(past, present & future).
• Internal sub system: features of the firm-the
location, employees, facilities etc.
• Deciding what to do, how to do, when to do.
• Decision making is an integral part of
planning.
• It involves choosing from alternatives.
 Importance of Planning
• Minimises Risk and Uncertainty
• Leads to Success
• Focus attention on the achievement of
Organizational Goals
• Facilitates Control
• Trains Executives
 Nature of planning
• Planning is done at various levels of
organization. It is pervasive
• Planning is a continuous process: constantly
watch the progress of plans. If changes are to
be made, introduces them.(principle of
navigational change)
• Plan must be flexible.(market, technology,
finance, personnel etc)
 Levels of planning
• Strategic Planning: Long term planning
• Eg: What should the organisation be after a
decade from now?
• Tactical Planning: Short term planning
• Eg: What are our short term financial needs?
• Contingency Planning: Situational
• Eg: What to do if there is a change in
government policy?
 Types of Plans
• Vision
• Mission
• Objectives
• Strategies
• Operational Plans
 Steps involved in planning
1. Establishing Verifiable Goals to be achieved.
2. Establishing Planning Premises (assumptions
about the future)
3. Deciding the Planning Period
4. Establishing and Deploying Action Plans
5. Measuring and Controlling the Progress
 Decision Making
• Recognising the problem
• Deciding priorities among problems
• Diagnosing the problem
• Developing the alternative solutions or courses of
action.
• Measuring and comparing the consequences of
alternative solutions.
• Converting the decision into effective action
• Follow-up
 Simon’s stages of decision making
• Intelligence stage: the environment for
conditions calling for decisions.
• Design: Inventing, developing and analysing
possible courses of action.
• Choice: Setting a particular course of action
from the available alternatives.
• Review: Assessing past choices