Planning (as a whole)

Made by-
Mahi Mehta
Nihar Dembla
Anushree Soni
Jigyasha Namdev
Aparna Shrivastava
Mohammed Mustafa Chhipa
 Introduction

 Planning is the process of thinking about the

activities required to achieve a desired goal. It is the
first and foremost activity to achieve desired results.
It involves the creation and maintenance of a plan,
such as psychological aspects that require conceptual
skills. There are even a couple of tests to measure
someone’s capability of planning well. As such,
planning is a fundamental property of intelligent
behavior
 Nature of Planning

 Planning Focuses on Achieving Objectives:

Management begins with planning and planning begins
with the determining of objectives. In the absence of
objectives no organisation can ever be thought about.
With the determining of objective, the way to achieve the
objective is decided in the planning.
 Planning is Primary Function of Management:
Planning is the first important function of management.
The other functions, e.g., organising, staffing, directing
and controlling come later. In the absence of planning no
other function of management can be performed.
 Planning is Pervasive: Since the job of planning is
performed by the managers at different levels working in
the enterprise, it is appropriate to call it all-pervasive.
Planning is an important function of every manager; he
may be a managing director of the organisation or a
foreman in a factory.
 Planning is Continuous:Planning is a continuous
process for the following reasons:
(a) Plans are prepared for a particular period. Hence, there
is need for a new plan after the expiry of that period.
(b) In case of any discrepancy plans are to be revised.
(c) In case of rapid changes in the business environment
plans are to be revised.
 Planning is Futuristic: Planning decides the plan of
action what is to be done, how is it to be done, when it to
be done, by whom is it to be done all these questions are
related to future. Under planning, answers to these
questions are found out.
 Planning Involves Decision Making:Planning
becomes a necessity when there are many alternatives to
do a job. A planner chooses the most appropriate
alternative. Therefore, it can be asserted that planning is
a process of selecting the best and rejecting the
inappropriate. It is, therefore, observed that planning
involves decision making.
 Planning is a Mental Exercise:Planning is
known as a mental exercise as it is related to
thinking before doing something. A planner has
mainly to think about the following questions:(i)
What to do? (ii) How to do it? (iii) When to do it? (iv)
Who is to do it?
 Planning process

1. Setting Objectives: The first and foremost step is

setting objectives. Every organisation must have
certain objectives. Objectives may be set for the
entire organisation and each department or unit
within the organisation.
2. Developing Premises: Planning is concerned
with the future which is uncertain and every
planner is using conjecture about what might
happen in future. Therefore, the manager is
required to make certain assumptions about the
future
3. Identifying alternative courses of action:
Once objectives are set, assumptions are made.
Then the next step would be to act upon them.
There may be many ways to act and achieve
objectives.
4. Evaluating alternative courses: The next step
is to weigh the pros and cons of each alternative.
Each course will have many variables which have to
be weighed against each other.
5. Selecting an alternative: This is the real point
of decision making. The best plan has to be adopted
and implemented. The ideal plan, of course, would
be the most feasible, profitable and with least
negative consequences.
6. Implementing the plan: This is the step where
other managerial functions also come into the
picture. The step is concerned with putting the plan
into action, i.e., doing what is required.
7. Follow-up action: : To see whether plans are
being implemented and activities are performed
according to schedule is also part of the planning
process.
 Types of Planning

 On the basis of Nature:

1. Operational Plan: Operational plans are the plans which are formulated
by the lower level management for short term period of up to one year. It is
concerned with the day to day operations of the organization. It is detailed
and specific. It is usually based on past experiences. It usually covers
functional aspects such as production, finance, human resources, etc.
2. Tactical Plan: The tactical plan is the plan which is concerned with the
integration of various organizational units and ensures implementation of
strategic plans on day to day basis. It involves how the resources of an
organization should be used in order to achieve strategic goals. The tactical
plan is also known as coordinative or functional plan.
3. Strategic Plan: A strategic plan is a plan which is formulated by the top
level management for a long period of time of five years or more. They
decide the major goals and policies to achieve their goals. It takes in a note
of all the external factors and risks involved and makes a long-term policy
of the organization. It involves the determination of strengths and
weaknesses, external risks, mission, and control system to implement
plans.
 On the basis of the Managerial Level
1. Top level Plans: Plans which are formulated by general managers
and directors are called top-level plans. Under these plans, the
objectives, budget, policies, etc. for the whole organization are laid
down. These plans are mostly long term plans.
2. Middle-level Plans: The managerial hierarchy at the middle level
includes the departmental managers. A corporate has many
departments like the purchasing department, sales department,
finance department, personnel department, etc. The plans
formulated by the departmental managers are called middle-level
plans.
3. Lower level Plans: These plans are prepared by the foreman or
the supervisors. They take the existence of the actual work and the
problems connected with it. They are formulated for a short period
of time and called short term plans.
 On the basis of Time
1. Long Term Plan: The long-term plan is the long-term
process that business owners use to reach their business
mission and vision. It determines the path for business
owners to reach their goals. It also reinforces and makes
corrections to the goals as the plan progresses.
2. Intermediate Plan: Intermediate planning covers 6 months
to 2 years. It outlines how the strategic plan will be pursued.
In business, intermediate plans are most often used for
campaigns.
3. Short-term Plan: The short-term plan involves pans for a
few weeks or at most a year. It allocates resources for day-to-
day business development and management within the
strategic plan. Short-term plans outline objectives necessary
to meet intermediate plans and the strategic planning process.
 On the basis of Use
1. Single Plan: These plans are connected with some
special problems. These plans end the moment of the
problems to be solved. They are not used, once after their
use. They are further re-created whenever required.
2. Standing Plan: These plans are formulated once and
they are repeatedly used. These plans continuously guide
managers. That is why it is said that a standing plan is a
standing guide to solving the problems. These plans
include mission, policies, objective, rules, and strategy.
 Advantages of planning

1. Attention on Objectives: Planning helps in clearly

laying down objectives of the organization. The whole
attention of management is given towards the
achievement of those objectives. There can be priorities
in objectives, important objectives to be taken up first
and others to be followed after them.
2. Minimizing Uncertainties: Planning is always done
for the future. Nobody can predict accurately what is
going to happen. Business environments are always
changing. Planning is an effort to foresee the future and
plan the things in a best possible way. Planning certainly
minimizes future uncertainties by basing its decisions on
past experiences and present situations.
3. Better Utilization of Resources: Another advantage
of planning is the better utilization of resources of the
business. All the resources are first identified and then
operations are planned. All resources are put to best
possible uses.
4. Economy in Operations: The objectives are
determined first and then best possible course of action
is selected for achieving these objectives. The operations
selected being better among possible alternatives, there
is an economy in operations. The method of trial and
error is avoided and resources are not wasted in making
choices. The economy is possible in all departments
whether production, sales, purchases, finances, etc.
5. Better Co-ordination: The objectives of the
organization being common, all efforts are made to
achieve these objectives by a concerted effort of all. The
duplication in efforts is avoided. Planning will lead to
better co-ordination in the organization which will
ultimately lead to better results.
6. Encourages Innovations and Creativity: A better
planning system should encourage managers to devise
new ways of doing the things. It helps innovative and
creative thinking among managers because they will
think of many new things while planning. It is a process
which will provide awareness for individual participation
and will encourage an atmosphere of frankness which
will help in achieving better results.
7. Management by Exception Possible: Management by
exception means that management should not be involved in each
and every activity. If the things are going well then there should be
nothing to worry and management should intervene only when
things are not going as per planning. Planning fixes objectives of the
organization and all efforts should be made to achieve these
objectives. Management should interfere only when things are not
going well. By the introduction of management by exception,
managers are given more time for planning the activities rather than
wasting their time in directing day-to-day work.
8. Facilitates Control: Planning and control are inseparable.
Planning helps in setting objectives and laying down performance
standards. This will enable the management to cheek performance
of subordinates. The deviations in performance can be rectified at
the earliest by taking remedial measures.
9. Facilitates Delegation: Under planning process,
delegation of powers is facilitated. The goals of
different persons are fixed. They will be requiring
requisite authority for getting the things clone.
Delegation of authority is facilitated through
planning process.
 Limitations

1. Lack of Reliable Data: Planning is based on various facts

and figures supplied to the planners. If the data on which
decisions are based are not reliable then decisions based on
such information will also be unreliable. Planning will lose its
value if reliable facts and figures are not supplied.
2. Time Consuming Process: Practical utility of planning is
sometimes reduced by the time factor. Planning is a time-
consuming process and actions on various operations may be
delayed because proper planning has not yet been done. The
delay may result in loss of opportunities. When time is of
essence then advance planning loses its utility. Under certain
circumstances an urgent action is needed then one cannot
wait for the planning process to complete.
3. Expensive: The planning process is very expensive.
The gathering of information and testing of various
courses of action involve greater amounts of money.
Sometimes, expenses are so prohibitive that small
concerns cannot afford to use planning. The long-term
planning is a luxury for most of the concerns because of
heavy expenses.
4. External Factors may Reduce Utility: Besides
internal factors there are external factors too which
adversely affect planning. These factors may be
economic, social, political, technological or legal. The
general national and international climate also acts as
limitation on the planning process
5. External Factors may Reduce Utility: Besides
internal factors there are external factors too which
adversely affect planning. These factors may be
economic, social, political, technological or legal. The
general national and international climate also acts as
limitation on the planning process.
6. Resistance to Change: Most of the persons,
generally, do not like any change. Their passive outlook
to new ideas becomes a limitation to planning.
McFarland writes. “The principal psychological barrier is
that executives, like most people have more regard for
the present than for the future.
 Principles of planning

 Principle of Commitment: This means that certain

resources must be committed or pledged for the purpose
of planning. Planning is not an easy task. So, necessary
help is to be taken from experts. The enterprise must be
ready to exhaust the available resources for the
achievement of a plan.
 Principle of the Limiting Factor: A plan involves
varied factors of different importance. This principle
implies that more emphasis has to be put on that factor
which is scarce or limited in supply or extremely costly.
This will help in selecting the most favourable
alternative.
 Principle of Reflective Thinking: Planning, being an
intellectual activity is based on rational considerations. These
involve reflective thinking which signifies problem-solving thought
process—a process by which past experiences are superimposed on
the facts of the present situation and possible future trends. None
can be a planner whose mind is not active, who does not possess any
deliberate power and whose sense of judgement is not strong.
 Principle of Flexibility: Though a plan is prepared after
reflective thinking, this does not mean that no departure can be
made in the course of its operation. The plan should be so prepared
that there is sufficient scope for changing it from time to time.
Changes must necessarily be effected in the plan for taking into
account new developments that may take place in the course of the
operation of the plan.
 Principle of Contribution to Enterprise
Objectives: A major plan is prepared and it is
supported by many derivative plans. But all plans must
contribute in a positive way towards the achievement of
the enterprise objectives.
 Principle of Efficiency: A plan should be made
efficient to attain the objectives of the enterprise at the
minimum cost and least effort. It must also achieve
better results with the minimum of unexpected
happenings. Therefore, it is to be seen that what is
expected is likely to be achieved.
 Principle of Selection of Alternatives: Planning is
basically a problem of choosing. The essence of planning
is the choice among alternative courses of action. There
is no need for planning if there is only one way for doing
something. In choosing from alternatives, the best
alternative will be that which contributes most efficiently
and effectively to the accomplishment of a desired goal.
 Principle of Planning Premises: A plan is prepared
against some foundations or backgrounds known as
‘Planning Premises’. There must be complete agreement
among the managers in respect of planning premises
over which the structure of plan is to be framed.
 Principle of Timing and Sequence of Operations:
Timing and sequence of operations determine the
starting and finishing time for each piece of work
according to some definite schedule and give practical
and concrete shape and form to work performance.
 Principle of Securing Participation: To secure
participation of the employees with whole-hearted co-
operation in execution of the plan, it is necessary that the
plan must be communicated and explained to them for
their full understanding. This understanding provides
the basis for additional knowledge about new facts and
matters to the employees.
 Principle of Pervasiveness: Though major
planning function is entrusted to the top
management, it is not restricted to the top level only.
It is a function of every manager at every level in the
organisation.
 Principle of Strategic Planning: Strategic
planning is essential where there is competition. It is
prepared in the light of what the competitors are
intending to do. Planners must take into account the
strategies of the rival organisations, otherwise the
planning projection may land them in trouble.
 Principle of Innovation: A good system of planning should
be responsive to the opportunities for innovation. Innovation
consists in creating something new for increasing satisfaction
of the consumers. This may also be stated as an important
strategy of business. Innovation is a necessity for its
sustaining growth in this dynamic world. Innovation is
achieved through research and development and planning is
required to provide such scope.
 Principle of Follow-up: In the course of execution of a
plan, certain obstacles may crop up in midway and planning
may require revision, alteration or correction. This is why
there must be a follow-up system in the planning process
itself. This allows timely changes in the planning and makes it
more effective.