PLANNING

Planning is the selection and relating of facts and making and using of proposed assumptions regarding
the future in the visualization and formulation of proposed activities believed necessary to achieve desired
result.
NATURE OF PLANNING
Planning is an intellectual process: It is mental work. The facts related to the task are related to the
manager’s experience and knowledge. A planner has to think about the following aspects :What is to be
done?How is it to be done? When is it to be done? By whom is it top be done?
Primacy of planning: It is the first function of a planner, Other functions like staffing, directing and
controlling etc are followed by planning. Without planning no other function can be performed.
Planning is pervasive Planning extends throughout the organization ,It is done in each levels of an
organization.Planning is important for all types of organizations.
All managers plan: Being planning the fundamental process, every manager in an organization has a
planning function to be performed. The degree of importance and magnitude of planning depends on the
level at which it is performed.
Planning is a rational process: An action is rational if it objectively and intelligently decided. The aim of
management is to reach the goals with the application of appropriate resources. Planning suggests a no., of
alternatives for reaching the goals. Future is always uncertain but planning process provides a rational
approach for suggesting alternative approaches to various situations.
Focus on objectives: The objectives influence the future course of every business and planning focuses
attention on setting up organizational objectives and suggests ways to achieve them.
Leads to efficiency and economy: Planning involves the efficient utilization of various resources like
capital, labour, machines, materials etc., planning avoid duplications of efforts and also ensures economy.
Co-ordination: Planning co-ordinates the what, who, how, why and where of planning. In the absence of
planning different segment s of the organization may pursue divergent objectives.
Flexibility: Planning is a dynamic process and it adjusts with the needs and requirements of the situations.
Realistic: Planning is based on future forecasts,and hence the objectives are a forecast to lead to the future
realities.
Planning is continuous: It a never ending activity, always tentative and subject to revision and
amendment as new facts become known. Generally managers always follow a practice of re-examining
plans regularly and modify them, if necessary.

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 Characteristics of a good plan:
• Clear Objective
• Proper understanding
• Comprehensive
• Flexible
• Economical
Advantages of planning:
• Attention on goals and objectives
• Minimization of uncertainties
• Better utilization of resources
• Economy in operations
• Better co-ordiantion
• Encourage innovation and creativity
• Facilitates control
• Facilitates delegation
• Management by exception is possible.
Steps in planning

Perception of Establishing Planning Identification

opportunities objectives premises of alternatives

←
Establishing Formulation of Choice of Evaluation of
sequence of supporting plans alternative alternatives
activities plans

Perception of opportunities: It is a vision of what an organization expects. It includes a

preliminary look at the possible opportunities and ability to see them clearly and
completely, i.e. a knowledge where organization stands in the light of strengths and
weaknesses .It is a preliminary stage where an organization tries to relate the opportunities
available to it in the environment.

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Establishing objectives:In this stage the major organizational objectives are set.
Objectives specify the results expected and indicate the end points of what is to be done,
where the primary emphasis is to be placed, and what is to be accomplished by the various
types pf plans. Thus there will be hierarchy of objectives in the department.
Planning premises: After determining the organizational goals and objectives, the next
step is planning premises, that is establishing conditions under which planning activities
will be undertaken. The plans are formulated in the light of expected environmental factors
(internal and external).Hence forecasting is a major role in planning premises.
Identification of alternatives:Based on the objectives defined and planning premises
identified various alternatives are identified. The concepts of alternatives suggests that a
particular objective can be achieved through various actions.
Example: An organization has decided to increase its profits , it can use various alternatives
which can be as
• Expansion – introduction of a similar product to the existing one,
• Diversification – shifting to a new product line,
• Retrenchment – Closing the product line which are not yielding profits.
Evaluation of alternatives: Each criteria or alternatives considered feasible is taken into
detailed analysis. The advantages and disadvantages of each are analyzed further for
adopting it as a plan in the business.
Choice of the alternative: After the evaluation of alternative the most fir one is selected.
In some cases more than one alternative may fir into the business plan , which is also
beneficial as it may serve as a contingency plan in need.
Formulation of supporting plans:
After the basic plan is established carious plans are derived to support the main plan. They
may relate to buying the equipments, raw materials, recruiting and training personnel,
developing new product etc., these plan are formulated support the main plan.
Establishing sequence of activities : After formulating basic and supporting plans, the
sequence of activities is determined so that plans are put into action. Budgets for various
periods can be prepared to give plans more concrete meaning for implementation.
TYPES OF PLANS
1. Purpose of Mission

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 2. Objectives
3. Strategies
4. Policies
5. Procedures
6. Programmes or projects
7. Budgets
Purpose of Mission : Mission set forth principles and conceptual foundation upon which
the organization rests its business . It is a standing plan which defines the basic intention of
an organization. The mission of the organization is expressed in managerially meaningful
terms, indicates exactly what activities the organization intends to engage in now and in
future. It simple terms it implies the image which an organization seeks to project.

Objectives: Objectives or goals are the end result towards which activities are aimed. An
organization has multiple objectives ranging from brad aim to specific individual
objectives. It is the objectives which directs to achieve organizational goals. Objectives are
pre-requisite of planning. No planning is possible without setting up onejctives
Strategies:
A strategy is a comprehensive and integrated plan to assure that business objectives are
accomplished. Strategies are complex plans for bringing the organization form given
posture to a desired position in the future period.
Policies: Policies are general statements or understandings which provide guidance in
decision making to various mangers. They define boundaries with in which decision are
taken in an organization, they help in discussing issues before they become problems.
Policies help in delegating authority with the given parameters and also to control the
same.Policy is defiens as a means of encouraging discretion and initiative but within limits.
Procedures: A procedure is a series of related tasks that make up the chronological
sequence and the established way of performing the work to be accomplished Procedures
are details of action of the guidelines for the achievement of business objectives. It gives
details of how things are to be done. They are pervasive and cover the entire organization.
They include how each task in the organization will take place, when it will take place, and
by whom it will be performed.

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Rules:
A rule is specific guide for action, established authoritatively, and utilized in order to
perform employees of conditions under which designated activities to be performed. Rule
states definite action to be taken or not to be taken in a situation. Rule brings rationality in
the behaviour of organization members. It helps to communicate to act in a particular way
which is helpful in completing the tasks and contributing to the achievement of
organizational goals.
Programmes or projects :
Progammes are devised to meet a particular situation . It is sequence of activities designed
to be implemented to accomplish a specific goal. Programmes may be taken as a
combination of policies procedures, rules, budgets , task assignments etc, developed for the
specific purpose of carrying out a particular course of action.
It is a single use comprehensive plan.
A no. of small plans formulate a plan.
It is prepared to achieve organizational goals.
A specific time period is fixed to achieve or complete the programme.
Budgets
A budget is the monetary or quantitative expression of business plans and policies to be
pursued in the future period of time. they are required to ensure efficient utilization of
available resources, they act as a control tool , they also are motivators to employees.

LIMITATIONS OF PLANNING
1. Difficulty in accurate premising
2. Rapid environmental changes
3. Internal inflexibilities
4. Psychological inflexibilities
5. Policy and procedural inflexibility
6. Capital investment
7. Trade unions
8. Technological changes
9. Time and cost factors

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 10. Failure in planning itself

EFFECTIVE PLANNING
Establishing climate for planning: Managers should create a climate where every person
in the organization takes planned actions. This can be achieved by setting goals ,
establishing planning premises , involving all managers in planning process, reviewing
subordinates plans and their performance, and ensuring proper information flow among the
employees A procedure is a series of related tasks that make up the chronological sequence
and the established way of performing the work to be accomplished. This implies planning
has to be forced at all level in an organization.
Initiative at top level: The role of top management in planning process is unique and
important. Effective planning stars at top level and gets supported from lower level
managers. Participation in planning process, i.e. when top management rigorously reviews
subordinates programmes, it naturally stimulates planning interest throughout the
organization. Hence top- management should initiate planning at all levels in an
organization.
Communication of planning elements: planning efforts fail when managers fail to
understand their goals and planning premises. Lack in the understanding of policies and
strategies at the lower level. Hence it is essential to communicate the information required
to the concerned people involved in planning. Not only that the information given should
be specific and clear.
Integrating short term plans and long term plans: Long term plan should be prepared
keeping in view ,what the organization can implement by way of its short term plans, co-
ordiantion between two should be achieved.
Open systems approach: An open system approach is where plans should be made by
taking into account the total environment influencing the planning process.

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