Lesson 8

• Planning


  It is a systematic activity which determines when, how and who is going to perform a specific job.
• Planning


  A detailed programme regarding future courses of action.
• Planning


  Planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment.
• Planning


  deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.
• Steps in Planning Function

  1. Establishment of Objectives
  2. Establishment of Planning Premises
  3. Choice of Alternative Course of Action
  4. Formulation of Derivative Plans
  5. Securing co-operations
  6. Follow up/ Appraisal of Plans
• Establishment of Objectives:

  •Planning requires a systematic approach.

  •Objectives guide actions and efforts.

  •Planning starts with the setting of goals and objectives to be achieved.

  •Objectives should be stated in a clear, precise and unambiguous language.

  •Objectives should be stated in quantitative terms.

  •Such goals should be specified in qualitative terms.

  •It should be realistic and achievable.
• Establishment of Planning Premises

  •Planning premises are the assumptions about the lively shape of events in future.

  •They serve as a basis for planning.

  •Establishing planning premises involves identifying potential deviations from plans and their causes.

  •It is to find out what obstacles are there in the way of business during the course of operations.

  •Establishing planning premises involves taking steps to avoid obstacles.

  •It is categorized as internal (capital investment policy, management-labor relations, etc.) or external (socio-economic, political, and economic changes).
• Choice of Alternative Course of Action


  •Evaluate multiple alternatives after forecasting.

  •Each alternative will be evaluated based on available resources and organizational requirements.

  •Consider consequences, merits, and demerits before choosing.

  •The most suitable option is selected after an objective and scientific assessment.

  •The planners should use quantitative techniques to assess the feasibility of different alternatives.
• Formulation of Derivative Plans


  •Derivative plans are secondary plans that assist in achieving the primary plan.

  •Support plans are derived from the basic plan to expedite its achievement.

  •These detailed plans consist of policies, procedures, rules, programs, budgets, schedules, etc.

  •Derivative plans provide a detailed outline of the schedule and order for completing different tasks.
• Securing Co-operation


  •It is advisable to take subordinates or those who will implement the plans into confidence, after the plans have been determined.

  •Involving team members in decision-making can boost motivation, provide insights, and increase engagement with plans.
• Follow up/ appraisal of plans

  •After choosing a particular course of action, it is put into action.

  •After the selected plan is implemented, it is important to appraise its effectiveness.

  •This is done based on feedback or information received from departments or persons concerned.

  •This enables the management to correct deviations or modify the plan.

  •This step creates a connection between the planning and controlling functions.

  •Implement plans, follow-up, observe, adjust.
• Characteristics of Planning

  1. Planning is Goal-Oriented
  2. Planning is Looking Ahead
  3. Planning is an Intellectual Process
  4. Planning Involves Choice and Decision Making
  5. Primacy of Planning
  6. Planning is a Continuous Process
  7. Planning is All Pervasive
  8. Planning is Designed for Efficiency
  9. Planning is Flexible
• Planning is Goal-Oriented

  •Planning is essential for a business to achieve its desired objectives.

  •Goals must be widely accepted to avoid misguided efforts.

  •Planning leads to achieving goals efficiently.

  •It provides a sense of direction to various activities.
• Planning is Looking Ahead

  •Planning is done for future.

  •It requires peeping in future, analyzing it and predicting it.

  •Thus, planning is based on forecasting.

  •A plan is a synthesis of forecast.

  •It is a mental predisposition for things to happen in future.
• Planning is an Intellectual Process


  •It involves creative thinking, sound judgment, and imagination.

  •It is not a mere guesswork but a rotational thinking.

  •Good managerial planning requires sound judgment, foresight, and imagination.

  •It is always based on goals, facts, and considered estimates.
• Planning Involves Choice and Decision Making

  •Planning involves choosing from options.

  •No need for planning if there is only one option.

  •Thus, decision-making is an integral part of planning.

  •Managers must select the best option based on the organization's needs and resources.
• Primacy of Planning

  •Planning is fundamental for management.

  •It serves as a guide for organizing, staffing, directing, and controlling.

  •Management functions are plan-based.

  •Therefore, planning is the fundamental function of management.
• Planning is a Continuous Process


  •It is ongoing due to dynamic business environments.

  •Plans are reviewed and updated regularly based on changing conditions and new requirements.

  •It continues until issues arise and must be dealt with effectively.
• Planning is All Pervasive


  •This requirement is essential across all levels and departments of an enterprise.

  •Planning requirements vary with task level.

  •Top-level executives plan the organization, middle-level managers plan departments, and lower-level managers implement plans.
• Planning is Designed for Efficiency 


  •Plan well, achieve more, spend less.

  •It minimizes waste and optimizes resource utilization.

  •A plan is useless if it does not consider the cost.

  •Therefore, planning must lead to saving time, effort, and money.

  •Good planning optimizes resources.
• Planning is Flexible

  •It is done for the future.

  •Be flexible in planning to adapt to unpredictable changes in demand, competition, and government policies.

  •Revised plans are necessary when circumstances change.
• Advantages of Planning:

  •It facilitates management by objectives.

  •It minimizes uncertainties.

  •It facilitates co-ordination.

  •It improves employee’s moral.

  •It helps in achieving economies.

  •It facilitates controlling.

  •It provides competitive edge.

  •It encourages innovations.
• Internal Limitations


  Planning has limitations that arise from its rigidity, techniques, and planners themselves.
• Rigidty


  Planning has tendency to make administration inflexible.
• Misdirected Planning


  Planning may be used to serve individual interests rather than the interest of the enterprise.
• Time Consuming


  Involves collection of information, it’s analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
• Probability in Planning


  Planning is based on forecasts which are mere estimates about future.
• False sense of Security


  Elaborate planning may create a false sense of security to the effect that everything is taken for granted.
• Expensive


  • Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money
  • According to Koontz and O’Donell, "Expenses on planning should never exceed the estimated benefits from planning."
• External Limitations

  •Political Climate

  •Labor Union

  •Technological changes

  •Policies of competitors

  •Natural Calamities

  •Changes in demand and prices