PLANNING

Meaning
 Planning is the management function of
determining the future course of action to
achieve the desired results. It involves
forecasting.
 Planning consists of problem solving and
decision making.
 “Planning is deciding in advance what is to be
done. It involves the selection of objectives,
policies, procedures and programmes from
among alternatives.”
- M.E. HURLEY
Nature and Characteristics:
 Goal-oriented.
 Primary function.
 All-pervasive.
 Intellectual process.
 Continuous process.
 Forward-looking.
 Involves choice.
 Integrated process.
 Directed towards efficiency.
Objectives, Importance
and Advantages:
 Focuses attention on objectives and results.
 Reduces uncertainty and risks.
 Provides sense of direction.
 Encourages creativity and innovation.
 Helps in coordination.
 Guides decision-making.
 Provides a basis for decentralisation.
 Provides efficiency in operations.
 Facilitates control.
Limitations:
 Inaccuracy.
 Time-consuming.
 Rigidity.
 Resistance.
 False security.
 Pressure-tactics.
 External constraints.
Principles:
 Principle of Contribution to Objectives.
 Principle of Efficiency of Plans.
 Principle of Primacy of Planning.
 Principle of Planning Premises.
 Principle of Policy Framework.
 Principle of Timing.
 Principle of Alternatives.
 Principle of Limiting Factor.
 Principle of Commitment.
 Principle of Flexibility.
 Principle of Navigational Change.
 Principle of Competitive Strategies.
Features of a good plan:
 Develop accurate forecasts.
 Gain acceptance of the plan from those
responsible for its implementation.
 The plan must be sound one.
 Be objective.
 Set up a monitoring system.
 Review and revise the plan at regular
intervals.
 Fit the plan to the situation.
Types of planning :
On the basis of time period:
 Long-term Planning.
 Medium-term planning.
 Short-term Planning.
(i) Corporate Planning.
(ii) Divisional Planning.
(iii)Departmental or Unit Planning.
Others:
 Strategic Planning.
 Operational Planning.
Steps involved in the
process of Planning:
 Analysing the Environment.
 Establishing Objectives.
 Determining Planning Premises.
 Developing Alternative Courses of
Action.
 Evaluating Alternatives.
 Selecting the Best Course.
 Formulating Derivative Plans.
Planning Premises
 The assumptions that are used in planning are derived
from forecasting. These assumptions are known as
PLANNING PREMISES.
 “Planning Premises are the anticipated environment in
which plans are expected to operate. They include
assumptions or forecasts of the future and known
conditions that will affect the course of plans, such as
prevailing policies and existing company plans that
control the basic nature of supporting plans.”
- Koontz and O’Donnell
Types:
 External and Internal Premises.
 Tangible and Intangible Premises.
 Controllable and Uncontrollable Premises.
Obstacles to Effective
Planning:
 Inadequate inputs.
 Lack of ability
 Sudden emergencies.
 Need for creativity.
 Resistance to change.
Methods and
Types of plans
Types of plans:
PLANS

Multi-use plans single-use plans

Objectives Programmes
Strategies Budgets
Policies Schedules
Procedures Projects
Rules Methods
Objectives:
 Objectives are the end towards which
activities of an organization are
directed
 They are known by different names
like goals, aims, purposes, mission ,
targets etc.
 Settingup objectives is the first step
in planning
Hierarchy of objectives:
Essentials of valid objectives
 Objectives must be clear and specific
 Objectives must be measurable
 Objectives must be result-oriented
 Objectives must be laid down in key areas
of business
 Objectives must be mutually supportive
and interconnected
 Objectives must realistic, not idealistic
 Objectives must always be valid
 Objectives must be acceptable
Strategy:
A strategy may be defined as an
overall plan prepared for meeting
the challenge posed by the activities
of competitors and other
environmental forces.
“ strategy is the complex plan for
bringing the organisation from a
given posture to a desired position in
a future period of time.”
Types of strategy:
 Grand or master strategy:
It is the basic strategy of an organisation. William F.
Glueck has identified the following types of master
strategies:
(a) Stability strategy
(b) Growth strategy
(c) Integration strategy
(d) Turnaround or retrenchment strategy
(e) Divestment or closure strategy
 Functional strategies or sub-strategies:
These strategies are used for development of resources to
achieve specific objectives.
SWOT analysis:

SWOT is the abbreviation for

S – Strengths
W – Weaknesses
O - Opportunities
T - Threats
Policy:
 Policiesdefine the area or limits
within decisions can be made to
achieve organizational objectives.
 “Policiesare general statements of
understanding which guide or
channel thinking in decision-making
of subordinates.”
Types of policies :
 Organisational and functional policies:
These are formulated by top management
 Originated , appealed and imposed policies
(a) Originated policies are formulated by top
managers
(b) Appealed policies are formulated on the appeal or
request of subordinates
( c) Imposed polices arise from the influence of
outside forces.
 General and specific policies
 Written and implied policies
Procedures:

 According to George .R. Terry “A

procedure is a series of related tasks that
makeup the chronological sequence and
the established way of performing the
work to be accomplished.”
 Procedures are different from policies and
methods.
 It plays an important role in the daily
operations of an organisation
Rules:
 Rules are rigid and definite plans that
specify what is to be done or not to be
done in given situations.
 It is the prescribed guide to conduct or
action
 Rules help to regulate behaviour and to
facilitate communication.
Single use plans:
 Programmes :
A programme is a concrete scheme action
designed to accomplish a given task. It is a
combination of objectives, policies, budgets,
task assignments and procedures.

 Budgets:
A budget is a statement of expected results
expressed in numerical terms for a definite
period of time in the future.
/ /

 Methods :
Methods are formalised and standardised ways of
accomplishing repetitive and routine jobs. These are
helpful in simplification , standardization and
systematisation of work.

 Schedules:
A schedule specifies time limit within which activities are
to be completed

 Projects:
A project is a distinct cluster of functions and facilitates
for a definite purpose and definite time period.