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Planning
Planning means looking ahead. Planning is the most basic of all managerial
functions.
In short, planning is preparing for tomorrow, today. It’s the activity that allows
managers to determine what they want and how they will achieve it. Not only does
planning provide direction and a unity of purpose for organizations, it also answers
six basic questions in regard to any activity:
According to Henry Fayol – “Planning is deciding the best alternative among others
to perform different managerial operations in order to achieve the pre-determined
goals.”
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Management Concepts Chapter 05 - Planning
For example, a company plans to sell one lakh units in the coming year. Suddenly,
many competing companies enter the market. This will naturally affect the previous
position of the company and therefore, it shall have to revise its planning.
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Management Concepts Chapter 05 - Planning
Planning is the first and most important function of the management. It is needed at
every level of the management. In the absence of planning all the business activities
of the organization will become meaningless. The importance of planning has
increased all the more in view of the increasing size of organizations.
2. Planning reduce risk of Uncertainty: Planning is always done for future and
future is uncertain. With the help of planning, possible changes in future are
anticipated and various activities are planned in the best possible way.
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Management Concepts Chapter 05 - Planning
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Management Concepts Chapter 05 - Planning
(a) Clear objective. The purpose of plans and their components is to develop and
facilitate the realisation of organizational objectives. The statement on objectives
should be clear, concise, definite and accurate. It should not be coloured by bias
resulting from emphasis on personal objectives.
(b) Proper understanding. A good plan is one which is well understood by those who
have to execute it. It must be based on sound assumptions and sound reasoning.
(c) Flexible. The principle of flexibility states that management should be able to
change an existing plan because of change in environment without undue extra cost
or delay so that activities keep moving towards the established goals. Thus, a good
plan should be flexible to accommodate future uncertainties.
(d) Stable. The principle of stability states that the basic feature of the plan should
not be discarded or modified because of changes in external factors such as
population trends, technological developments, or unemployment.
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Management Concepts Chapter 05 - Planning
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Management Concepts Chapter 05 - Planning
8. Follow up: This is the last step in planning. After having adopted major and
expected plans and they are brought into execution, the process of planning
does not end with the implementation of plans. Plans are formulated for
future which is uncertain. It is of great importance that there is a constant
review of plans so as to ensure success in the uncertain future. The moment
there appears to be changes in the plans also. In this way we can say planning
is continuously moving process.
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Management Concepts Chapter 05 - Planning
A strategic plan is a high-level overview of the entire business, its vision, objectives,
and value. This plan is the foundational basis of the organization and will dictate
decisions in the long-term. The scope of the plan can be two, three, five, or even
ten years. The components of Strategic Plan are
(a) Vision and Mission, (b) Objectives and Goals, and (c) Strategies / Action Plan
In contrast to long-term planning (which begins with the current status and lays
down a path to meet estimated future needs), strategic planning begins with the
desired-end and works backward to the current status.
At every stage of long-range planning the planner asks, "What must be done here
to reach the next (higher) stage?"
At every stage of strategic-planning the planner asks, "What must be done at the
previous (lower) stage to reach here?"
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Management Concepts Chapter 05 - Planning
Identification of the organization's vision and mission is the first step of any strategic
planning process. The vision sets out the reasons for organization's existence and
the "ideal" state that the organization aims to achieve; the mission identifies major
goals and performance objectives. One cannot overemphasize the importance of a
clear vision and mission; none of the subsequent steps will matter if the organization
is not certain where it is headed.
Objectives:
The objectives are the areas of emphasis within the organization. Rather than
specific statements with a specific goal, objectives state that the organization plans
to continue to do quality work in the following areas. These objectives or areas of
emphasis need to be attained by discussion and review of the organization's current
activities as well as activities in which it would like to participate.
Goals:
These need to be both long-term and short-term goals; six months, one-year, three-
years, and ten-year goals need to be set so that the strategy for reaching these goals
can be outlined in the plan. Most organizations recommend setting the long-term
goals first and then setting short-term goals: those goals which can be reached as
steps to attaining the long-term goal.
The Action Plan should be designed after the main goals and objectives have been
set in order to attain the mission in a straightforward and measurable way. With an
Action Plan, the goals themselves can be obtained. Without the Action Plan, and the
measures it entails, it would be impossible to implement the plan and measure its
success.
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Management Concepts Chapter 05 - Planning
A tactical plan is concerned with what the lower level units within each division must
do, how they must do it, and who is in charge at each level. Tactics are the means
needed to activate a strategy and make it work. Tactical plans are concerned with
shorter time frames and narrower scopes than are strategic plans. These plans
usually span one year or less because they are considered short-term goals.
Normally, it is the middle manager’s responsibility to take the broad strategic plan
and identify specific tactical actions.
The specific results expected from departments, work groups, and individuals are the
operational goals. These goals are precise and measurable.
“Process 150 sales applications each week” or “Publish 20 books this quarter” are
examples of operational goals.
An operational plan is one that a manager uses to accomplish his or her job
responsibilities. Supervisors, team leaders, and facilitators develop operational plans
to support tactical plans.
Operational plans can be a single-use plan or an ongoing plan.
These plans are created for events/activities with a single occurrence. This can be a
one-time sales program, a marketing campaign, a recruitment drive, etc. Single use
plans tend to be highly specific.
Program: A program specifies the steps to be taken resources to be used, time limit
for each step and assignment of task. It is a sequence of action steps arranged in the
priority necessary to implement a policy and achieve an objective. It defines the
contents and scope of activities. Programs are prepared for various activities like
development of new product, training of employee’s, purchase of machinery etc.
Budget: A budget is also a single-use plan because it predicts sources and amounts of
income and how much they are used for a specific project. It is a statement of
expected results expressed in numerical terms for a definite period of time in the
future. Budget serves as a mean of co-ordination and control. Budgets may be
prepaid for various groups of activities like production, sales, personal, advertising
etc. Budget may be prepared in term of money, time & / or resources.
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Management Concepts Chapter 05 - Planning
These plans can be used in multiple settings on an ongoing basis. Ongoing plans are
created on an ad-hoc basis but can be repeated and changed as required. Ongoing
plans can be of different types, such as:
Policy: A policy is a general document that dictates how managers should approach
a problem. It influences decision making at the micro level. Specific plans on hiring
employees, terminating contractors, etc. are examples of policies.
Rule: Rules are specific regulations according to which an organization functions.
The rules are meant to be hard coded and should be enforced stringently. “No
smoking within premises”, or “Employees must report by 9 a.m.”, are two examples
of rules.
Procedure: A procedure describes a step-by-step process to accomplish a particular
objective. For example: most organizations have detailed guidelines on hiring and
training employees, or sourcing raw materials. These guidelines can be called
procedures.
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Management Concepts Chapter 05 - Planning
05.10. Objectives :
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Management Concepts Chapter 05 - Planning
05.11. Strategies :
The term 'Strategy' has been adapted from war and is being increasingly used
in business to reflect broad overall objectives and policies of an enterprise.
According to Koontz and O' Donnell, "Strategies must often denote a general
programme of action and deployment of emphasis and resources to attain
comprehensive objectives".
Strategies are plans made in the light of the plans of the competitors because
a modern business institution operates in a competitive environment. They
are a useful framework for guiding enterprise thinking and action.
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Typically strategic plans are created through a major effort every five years, and
updated with a review process every 12 months or so. It’s not over. It’s never over.
To ensure the plan performs as designed, you must hold regularly scheduled formal
reviews of the process and refine as necessary.
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05.12. Policies
A policy is a standing plan. Policies are directives providing continuous framework for
executive actions on recurrent managerial problems. A policy assists decision-making
but deviations may be needed, as exceptions and under some extraordinary
circumstances.
Policy-making is an important part of the process of planning. Policies may be
described as plans which are meant to serve as broad guides to decision making in a
firm. Policies exist at various levels of the enterprise—Corporate level, divisional level
and departmental level. Policies are valuable because they allow lower levels of
management to handle problems without going to top management for a decision
each time.
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