Planning

• Planning


  Deciding in advance what to do and how to do it
• Planning


  • It is one of the basic managerial functions
  • It is closely connected with creativity and innovation
  • It involves setting objectives and developing appropriate courses of action to achieve these objectives
  • It provides a rational approach for achieving predetermined objectives
• Planning means setting objectives and targets and formulating an action plan to achieve them
• Planning is concerned with both ends and means i.e., what is to be done and how it is to be done
• Planning has to have a given time frame as time is a limited resource
• Planning


  • It focuses on achieving objectives
  • It is a primary function of management
  • It is pervasive
  • It is continuous
  • It is futuristic
  • It involves decision making
  • It is a mental exercise
• Planning


  • It is a process of decision making
  • It is essential for business organisations
  • It is difficult to manage operations without formal planning
  • It is important for an organisation to move towards achieving goals
• Things do not always go according to plan
• Factors that affect business plans

  • Unforeseen events and changes
  • Rise in costs and prices
  • Environmental changes
  • Government interventions
  • Legal regulations
• If we cannot adhere to our plans, then why do we plan at all?
• Major limitations of planning

  • Planning leads to rigidity
  • Planning may not work in a dynamic environment
  • Planning reduces creativity
  • Planning involves huge costs
  • Planning is a time-consuming process
  • Planning does not guarantee success
• Planning process


  1. Setting objectives

  2. Developing premises

  3. Identifying alternative courses of action

  4. Evaluating alternative courses

  5. Selecting an alternative

  6. Implementing the plan

  7. Follow-up action
• Objectives


  The desired future position that the management would like to reach
• Objectives are very basic to the organisation and they are defined as ends which the management seeks to achieve by its operations
• Single-use plan


  A plan developed for a one-time event or project
• Standing plan


  A plan used for activities that occur regularly over a period of time
• Types of standing plans

  • Policies
  • Procedures
  • Methods
  • Rules
• Strategy


  A general plan prepared by top management outlining resource allocation, priorities and taking into consideration the business environment and competition
• Objectives are usually set by the top management and serve as a guide for overall planning
• Objectives need to be expressed in specific, measurable terms
• Objectives


  Ends which the management seeks to achieve by its operations. What you would like to achieve, i.e., the end result of activities.
• Objectives


  • Increasing sales by 10%
  • Earning a reasonable rate of return on investment
  • Earn a 20% profit from business
• Objectives represent the end point of planning. All other managerial activities are also directed towards achieving these objectives.
• Objectives are usually set by top management of the organisation and focus on broad, general issues.
• Objectives define the future state of affairs which the organisation strives to realise and serve as a guide for overall business planning.
• Objectives need to be expressed in specific, measurable terms in the form of a written statement of desired results to be achieved within a given time period.
• Strategy


  A comprehensive plan for accomplishing an organisation's objectives, including determining long term objectives, adopting a particular course of action, and allocating resources necessary to achieve the objective.
• When formulating strategy, the business environment needs to be taken into consideration as changes in the economic, political, social, legal and technological environment will affect an organisation's strategy.
• Strategic decisions


  • Whether the organisation will continue to be in the same line of business
  • Combine new lines of activity with the existing business
  • Seek to acquire a dominant position in the same market
• Marketing strategy


  • Who are the customers?
  • What is the demand for the product?
  • Which channel of distribution to use?
  • What is the pricing policy?
  • How do we advertise the product?
• Policy


  General statements that guide thinking or channelise energies towards a particular direction. Provide a basis for interpreting strategy and are guides to managerial action and decisions in the implementation of strategy.
• There are policies for all levels and departments in the organisation ranging from major company policies to minor policies.
• Procedure


  Routine steps on how to carry out activities. They detail the exact manner in which any work is to be performed in a chronological order.
• Procedures are specified steps to be followed in particular circumstances and are generally meant for insiders to follow.
• Policies and procedures are interlinked, with procedures being steps to be carried out within a broad policy framework.
• Method


  The prescribed ways or manner in which a task has to be performed considering the objective.
• Selection of proper method saves time, money and effort and increases efficiency.
• Rule


  Specific statements that inform what is to be done, without allowing for any flexibility or discretion.
• Programme


  Detailed statements about a project which outlines the objectives, policies, procedures, rules, tasks, human and physical resources required and the budget to implement any course of action.
• Budget


  A statement of expected results expressed in numerical terms. A plan which quantifies future facts and figures.