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PLANNING



PLANNING

Management 8/e - Chapter 4 2



PLANNING

A Plan is course of action to be taken future.

Planning is the process of deciding in

advance what is to be done, how it is to bedone, where, when and whom.

Planning is a mental exercise that requires

imagination, foresight and sound judgement.It is thinking before doing.



Definition

Koontz O'Donnell :

– “Planning is an intellectual process, the

conscious determination of courses of action”.

Louis A Allen:

“Planning involves the development of

forecasts, objectives, policies, programmes,

procedures, schedules and budgets".Philip Kotler :

“Planning is deciding in the present what to

do in future”.



Nature of Planning

Planning is goal-oriented:

– Planning seeks to achieve certain objectives

and all plans are linked with the goals of theorganization.

– Planning will become a useless exercises if it

does not contribute in some positive way to the

accomplishment of desired objectives.

– Planning identifies the actions that would lead

to the desired results quickly and economically



Nature of Planning (Cont.…)

Planning is future Oriented :

– Planning is essentially cooking ahead and

preparing for the future.

– It is based on the proverb “ look before you

leap”.

– Scientific anticipation of future events called

forecasting which serves as the basics of planning.




Planning is an intel lectual process:

– Planning is a mental exercise involving creative

thinking and imagination.

– A manager can prepare sound plans only when

he has sound judgement , foresight and vision.

– Planning is not mere guess work but involves

logical and systematic thinking.




Planning is pr imary function :

– Planning saves as the basics for another

functions of management.

– It precedes organizing , staffing, directing and

controlling.

– All the functions are performed within the

framework of plans. – Therefore, Planning is most basic important

function.




Planning is pervasive :

– Planning required in all types of organizations

and at levels of management.

– Every department prepares plans.

– However, the slope of planning may differ from

one level to another.

–

Top level managers are generally concerned with long time periods.

– Lower level managers are more concerned

with planning activities for the day ,week or the

month.




Planning is continuous :

– Planning is an ongoing process.

–

Plans are prepared for specific time period e.g.one year.

– At the end of period , new plans have to

prepared.

– Similarly as conditions change , existing plansto be revised.

– They call it the principle of navigational

change.




Planning aims at eff iciency :

– Planes are prepared to achieve the objectives

in the best way.

– Sound planning leads to accomplishment of

desired objectives at the minimum possible

cost.(i.e. Optimization of resources.)

– A plan is worthless if it is not worth the cost incurred on it.

– Planning also focuses on accurate forecasts.



Purpose of Planning

Making objectives clear :

– Planning makes goals clean and specific.

– This is because goals are to be achieved are

decided before choosing the course of action.

– Planning focuses attention on the

organizational objectives.

– Plans serve as a guide for deciding what actions should be taken.

– With clear goals ,activities becoming

meaningful.



Purpose of Planning (Cont.…)

Helps the organization a r ight path:

– Planning helps the organization to keep on the

right path.

– Employees understand how their action relate

to organizational goals.

– Planning avoids aimless and ad-hoc action.

– Planning provides systematic and orderlytowards the goals.

– Without goals, decisions become ad-hoc

choices become meaningless.




I t reduces r isk and uncertainty :

– Business enterprises operate in an uncertain

environment.

– Planning enables these enterprises to predict

future events and prepare to face unexpected

events with help of planning , managers can

identify potential dangers and take-steps toover come them.

– Planning is helpful in assessing and meeting

future challenges.




I t improve eff iciency of operations :

– Planning involves selection of best possible

course of action.

– It helps to eliminate all types of waste and to

achieve optimum utilization of available

resources.

– Planned action is always better than unplanned action.

– Planning makes the total task of managing

more efficient and effective.




Provides the basis for control :

– Planning provides the standard against which

the actual performance can be measured and

evaluated.

– A comparison of performance with the desired

results help to identify the deviations and to

take corrective steps to make the events confirmto plans.




Facil i tates decision making :

– Decision making is thus integral part of

planning.

– Process of choosing among alternatives.

– Decision making will occur at many points in

the planning process.

– Planning involves forecasting of futureconditions.

– With the help of planning hasty decisions and

random actions can be avoided.




Effective coordination :

– Planning determines the activities of different

individuals ,groups and departments in such

away that maximum coordination between

physical and human resources.

– Without planning it is not possible to co -

ordinate the different activities of anorganisation.



Limitations of Planning

Planning premises may not be fully reliable.

Dynamic conditions act as a limitation of planning.

Availability of time is a limiting factor of planning.

Cost involved in planning is also a limiting factor. Mental attitude of management can be serious limiting

factors to planning.

Procedural and policies rigidities also proved to be a

hindrance to planning. Capital invested in the fixed assets may be limitation to

planning.

External – Scientific , Technological, economic , political ,

Ethical ,legal and social.



Types of Planning

Long-range planning :

– Long-range planning sets long-term goals for the

enterprise and then proceeds to formulate specific

plans for attaining these goals. – It involves an attempt to anticipate ,analyze and make

decisions about basic problems.

Short – range planning :

– This concerned with determination of short term

activities to accomplish long term objectives.

– Relates to a relatively short period and has to be

consistent with the long – range plans.



Types of Planning (Contd...)

Strategic planning :

– Strategic planning is part of functional areas of

business.

– It involves key decisions regarding the overall goalsand strategic of the enterprise.

– It is the process of deciding on basic goals , the

resources required to achieve.

– It is based upon long term forecasts and is done at higher levels of management .

– It contains developmental cum resources planning.




Operational planning :

– It also know as tactical or administrative .

– It involves the conversion of strategic plans into

detailed operational programs. – It is blue print for current action and its

supports the strategic plan.

–

It is concerned with specific tasks and reflects aroutine decision.

– It is being prepared at lower level management.

– It concerned with optimum use of resources

with in frame work




Functional planning :

– It is prepared for various functional areas like

production ,marketing ,financial and manpower

planning.

– It serves as a guide for people in particular

department of functional area of the enterprise.



Steps in Planning



Steps in Planning (Contd...)

Define and describe objective :

– Plans are prepared to achieve objectives/goals.

– First step in planning to define clearly the

objectives of the organization as a whole and each of its individual departments.

– Need for planning arises either for solving a

problem or for exploiting an opportunity that may arise in the future.

– Therefore ,the problem to be solved or the

opportunity to be utilized should be clearly

defined




Determination of planning premises :

– Planning premises are the assumptions about

the future.

– They provide environment or boundaries inwhich plans will be implemented.

– Planning premises are established with help of

forecasting. – Present trends and future possibilities should

be assessed .




Discover alternate courses of action :

– To identify all possible alternatives , it is

necessary to collect and analyze all relevant

information. – Information may be collected from primary

and secondary sources.

–

The data so collected will serve as the basis for development of an alternative course of action.

– The information used in discovering alternative

must be up to date and reliable.




Evaluation of alternatives and final choice :

– The various alternatives are evaluated and

compared in terms of their expected costs and

benefits. – The alternative courses of action should be

judged in terms of common factors such as the

risk involved , expected return , planning

promises goals to achieved etc.

– After objective and scientific evaluation of

different alternatives ,the best alternative is

selected.




Formulating of derivative plan :

– After the basic plan is decided , the next logical steps is

to develop detailed plan for its implementation.

– These detailed plans refer to the policies, procedures ,rules , schedules and budgets , etc.

– For instance, when a company decides to new product ,

plans concerning the product design , procurement of

funds , purchase of materials, training of personnel ,advertising for the product , etc. , have to be prepared.

– Proper timing and sequencing of should be done.




Communicating the plan :

– Plan should be explained to the subordinates to

earn their support in the execution of plans.

– Successful implementation of plans requires

whole hearted coordination and understanding

of personnel.

– It depends upon the attitudes and belief of theemployees in enterprises.

– Successful executing of plans ,requires the

participation of subordinates.




Reviewing the planning process :

– Continuous evaluation of plans and the process

of planning helps to detect short-comings or

pit-falls of the plans.

– All the plans should be reviewed from time to

time in the light of current circumstances and

necessary action should be taken to keep them

up to date.

– A system of constant review and appraisal of

plans must be devised to improve the planning

process.



Principles of Planning

Principles of contribution to objectives

Principles of pervasiveness of planning

Principles of limiting factor

Principles of flexibility

Principles of navigational change



Measures of making Planning

more effective



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