PLANNING PREMISES

INTRODUCTION

Premises are the assumptions of the future environment on which plans are to be
carried out. Premises are anticipated environment. It is to forecast sales volume, cost,
political and legal environment, technological change, availability of labor. Premises are
important because they give important informations about future to managers. Establishment
of premises is important step in planning. Premises are the forecast of future expectations
about:

Demographic trend: - It is related with human population, its distribution, size,

composition and migration.

Future economic business condition: - Related to business sycle. Condition of

business cycle such as growth, prosperity, recession and recovery.

Forecast about political and legal of the country.

Technological change and innovations

Resource availability

Socio cultural forces

These assumptions are essential to make plans more realistic and operational.
Planning premises provide a framework. All plans are made within this framework. There are
many environmental factors, which influence the plan. Assumptions are made about these
factors. These assumptions are called premises. Planning is made depending on some
information. This information is included with planning premises.

Some information is available and some are not. These are very essential to make
plan. These information are mainly known as planning premises. Sometimes efficient
information are got from forecasting, in such situation planning premises become strong. For
planning premises managers may not face any uncertainty for implementing planning.

According to H. weihrich and H.koontz, " Planning premises are identified as the
anticipated environment in which plans are expected to operate." According to C.B.Gupta,
"Planning premises are the critical factors which lay down the boundary for planning". There
are mainly two types of planning premises include external premises and internal premises.

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 On the above discussion and definition finally we can say that plans are prepared
based on the some assumptions and condition which should be clearly identified. These
assumptions are called planning premises.

TYPES OF PLANNING PREMISES

Different types of planning premises are depicted in the picture (figure) below.

Types of Planning Premises are briefly explained as follows

1. INTERNAL AND EXTERNAL PREMISES

1. Internal Premises come from the business itself. It includes skills of the workers,
capital investment policies, philosophy of management, sales forecasts, etc.

2. External Premises come from the external environment. That is, economic, social,
political, cultural and technological environment. External premises cannot be
controlled by the business.

2. CONTROLLABLE, SEMI-CONTROLLABLE AND UNCONTROLLABLE

PREMISES

1. Controllable Premises are those which are fully controlled by the management. They
include factors like materials, machines and money.

2. Semi-controllable Premises are partly controllable. They include marketing strategy.

3. Uncontrollable Premises are those over which the management has absolutely no
control. They include weather conditions, consumers' behaviour, government policy,
natural calamities, wars, etc.

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3. TANGIBLE AND INTANGIBLE PREMISES

1. Tangible Premises can be measured in quantitative terms. They include units of

production and sale, money, time, hours of work, etc.

2. Intangible Premises cannot be measured in quantitative terms. They include

goodwill of the business, employee's morale, employee's attitude and public relations.

4. CONSTANT AND VARIABLE PREMISES

1. Constant Premises do not change. They remain the same, even if there is a change in
the course of action. They include men, money and machines.

2. Variable Premises are subject to change. They change according to the course of
action. They include union-management relations.

REQUIREMENTS OF EFFECTIVE PREMISING:

1. Selection of the premises which bear materially on the programs.

2. Development of alternative premises for contingency planning.

3. Verification of the consistency of premises. and

4. Communication of the premises.

STRATEGIES, POLICIES AND PLANNING PREMISES

Strategies and policies are closely related. These include

(i) defining the mission of the organization,

(ii) determining organizational objectives,

(iii) assessing organizational resources and evaluating environmental risks and

opportunities,

(iv) formulating strategy,

(v) implementing strategy through operating plans, and

(vi) monitoring and adapting strategic plans. Before devising an effective strategy to
gain a competitive edge, managers need to analyze the organization's competitive situation
carefully.

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 They provide direction for the organization and form the basis of operational plans.
Strategy refers to the determination of the long-term objectives of an enterprise and the
adoption of courses of action to achieve these aims, while policies are concepts that guide the
thought processes and behavior of managers when they make decisions. For this purpose, a
SWOT analysis, which involves analyzing the organization's internal strengths and
weaknesses and environmental opportunities and threats, is carried out.

Firms which adopt a differentiation strategy attempt to offer products and services
that are considered unique in the industry. A focus strategy facilitates specialization by
establishing a position of overall cost leadership, differentiation, or both. A firm adopting a
focus strategy attempts to serve a specific segment of the market, instead of catering to the
entire market. Thus, all the major aspects of strategies, policies and planning premises have
been discussed in the chapter. These concepts are of great significance in contemporary
management theory.

THE PLANNING PROCESS

Phase 1 is establishing objectives. an objective or goal is the end that an organization

seeks to achieve. Before any course of action, objectives should be clearly determined,
understood, and started.

Phase 2 is developing premises. Premises attempt to describe what the future will be
like and provide a framework for identifying, evaluating, and selecting a course of action.

Phase 3 is making decisions. A plan exists only when a decision is made. Decisions
are normally made under conditions of risk and uncertainty. Steps in the decision-making
process are defining the problem, analyzing the problem, developing alternative solutions,
evaluating alternatives, and selecting the best solution.

Phase 4 is implementing a course of action. management must provide detailed

instructions covering individuals responsible and resources to be allocated to the plan.
Implementation is considered by some to be the key to effective planning. No plan is better
than the action taken to make it a reality.

Phase 5 is evaluating results. Once a plan has been put in motion, evaluation is
necessary to provide feedback. Adjustments are invariably needed to verify that actual results
compare favorably with expected results.

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CONCLUSION

Premises are land and buildings together considered as a property. This usage arose
from property owners finding the word in their title deeds, where it originally correctly meant
"the aforementioned; what this document is about", from Latin prae-missus = "placed
before". In this sense, the word is always used in the plural, but singular in construction. Note
that a single house or a single other piece of property is "premises", not a "premise", although
the word "premises" is plural in form; e.g. "The equipment is on the customer's premises",
never "The equipment is on the customer's premise".

REFERENCES

http://management-at-sight.blogspot.in/2012/09/planning-premises.html

http://kalyan-city.blogspot.com/2011/09/meaning-and-types-of-planning-premises.html

http://www.bms.co.in/what-are-planning-premises/

http://bbahome.blogspot.in/2013/02/planning-premises.html