CONTENTS

1. What is planning ?
2. Nature of planning.
3. Significance of planning.
4. Advantages of planning.
5. Limitations of planning.
6. Primacy of planning.
7. Pervasiveness of planning.
8. Elements of planning.
9. Process of decision making.

What is planning ?
Planning is the first and foremost function to be performed in the
process of management. It concentrates on setting and achieving
objectives of an organization. It is an analytical thought which covers:
1. Assessment of the future.
2. Determination of objectives and goals in the light of the future.
3. The development of alternative courses of action to achieve
objectives.
4. Selection of the best course of action among these alternatives.

A plan is a predetermined course of action to achieve a specified aim

or goal. It is based on reliable information and not on emotions or
feelings. It reflects vision, foresight and wisdom. It is a blueprint for
action.
Nature of planning.
1. Focus on objectives.
2. Primacy of planning.
3. Pervasiveness of planning.
4. Efficiency.
5. Co-ordination.
6. Limiting factors.
7. Flexibility.

Significance of planning.
1. Planning focuses on the future direction, values and sense of purpose.
2. Planning provides a unifying decision making framework.
3. Planning helps to identify potential opportunities and threats.
4. Planning provides performance standards.
5. Tuning with the environment.
6. The need for planning arises from constant changes.
Advantages of planning.
1. Integrated, consistent and purposeful action is more easily achievable.
2. Planning enables a company to remain competitive with the rivals.
3. Through careful planning, crises can be anticipated and mistakes or delays can
be avoided.
4. Planning can point out the need for future change.
5. Planning enables a systematic and thorough investigation of alternative
methods.
6. Plans are based on adequate information of past and present as well as on the
intelligent forecasting of the future.
7. Planning provides a sound basis for reasonable and effective control.
8. Removes confusion or chaos, hence no need to grope in the dark.
9. Planning improves and builds up a good inter relationship among the
employees.
10. Planning helps to remove communication gaps and barriers.
11. Planning facilitates effective delegation of authority to act.

Limitations of planning.
1. The accuracy and reliability of most
of the forecasts diminishes rapidly as these forecasts are projected further and further
into the future.
2. Planning is many a times very costly.
3. In the planning process quality of output is only as good as quality of input.
4. Standing plans are more inflexible than single user plans.
5. Planning is a time consuming activity.
6. Planning encourages a false sense of security against risk or uncertainty.
7. Standing plans demand repetitive operations.

Primacy of planning.
• Planning is not a substitute for other managerial functions.
• Planning may indicate the need for improving co-ordination.
• It may emphasise higher degree of leadership and motivation to secure the
best implementation.
• It can point out the need for reorganization of the department or even the
entire organization structure.
• Managerial operations in organizing, staffing, directing, leading, motivating
and controlling must support planning.
• Planning logically precedes execution of all other managerial functions.
All these important points of planning in the management process is called the
PRIMACY OF PLANNING.

PERVASIVENESS OF PLANNING
 TOP LEVEL MANAGEMENT

MIDDLE LEVEL
MANAGEMENT

LOWER LEVEL
MANAGEMENT

FRONTLINE
OPERATOR

HIERARCHY OF MANAGEMENT

TOP MANAGEMENT has to devote much more time to planning and policy
making. It has to formulate long range or strategic plans which involves detailed
analysis of many uncontrollable and unpredictable environment factors.

MIDDLE MANAGEMENT has to formulate short term or tactical plans and

devotes relatively less time on planning and more time on co-ordination and
communication.

LOWER LEVEL MANAGEMENT is responsible for doing aspect of

management. They get performance results as per plan and on time.
ELEMENTS OF PLANNING
• OBJECTIVES.
Management by objective ( mob )
• POLICIES.
• RULES.
• PROCEDURE.
• PROGRAMME.
• SCHEDULE.
• BUDGET.
• FORECASTING.
a) EXTRAPOLATION.
b) ECONOMIC FORECASTING.
c) MARKETING RESEARCH.

PROCESS OF DECISION MAKING

Decision making involves six distinct steps or phases :
1. Define the problem to be solved. Problem defined is a problem half-
solved.
2. Determine possible alternative solutions.
3. Analyse, compare and evaluate the impact of alternatives.
4. Decide upon the best solutions. Choose the best course of action.
5. Convert the decision into effective action i.e., take action.
6. Follow up the same till you secure the desired result.

Criteria for picking the best

• The risk.
• Economy of effort.
• Timing.
• Limitation of resources.