Chapter: 4
PLANNING
Planning means deciding
today what is to be done tomorrow. It is the process of deciding in advance
what is to be done, how it is to be done, where it is to be done, when it is to
be doneand by whome it is to be done. It is a systematic process of setting
goals and identifying the best way and means to achieve those goals.
It is considered as the art of possible and the process of matching the results
with opportunities.
Definitions:
"Planning is the process by which a manager
looks to the future and discover alternative course of action opened to
him".
- Joseph Massie
"Planning is fundamentally a mental pre-deposition to do things in an
orderly way, to think before acting and to act in the light of the facts
rather than of gusses"
-L.F. Urwick
FEATURES
OF PLANNING
Following are the various features of planning:
1. Goal Oriented:
Every organisation has certain goals. Planning
contributes to the attainment of business goals.It makes objectives tangible
and concrete and determines the way to achieve it. If planning does not related
to the objectives it will be an empty mental exercise.
2. Primacy of planning:
The word 'Primacy' means 'state of being first'.
Planning is the first among all other management functions, which sets the
objectives of the business. All other management functions are designed on the
basis of objectives set under planning. So if any change is made in the
objectives will affect the structure of other functions.
3. Pervasiveness:
Plannis is the basic function of every managers from
top to bottom. It is essential and spread throughout the entire area of
operation in an organisation in an organisation. No part of the organisation
should be excluded from the purview of planning,
but its ange may differ at different levels.
4. Flexibility:
Planning is future oriented activity, but future is
uncertain.Some times actual situation may difer from planned situation. So
plans are to be changed to accept the changes in the future environment. So it
is a flexible one.
5. Continuous process:
Generally plans are prepared for a specific peroid of
time. At the end of that period new plans are prepared for new needs. Similarly
as the environmental condition changes, existing plans have to be revised. So
planning is a never ending process and hence it is a continuous one.
6. Forward looking:
Planning means thinking and deciding today for
tomarrow to achieve certain objectives. The purpose of planning is to handle
the future events effectively. Thus planning is forward looking, i.e, looking
ahead and preparing for the future.
7. Planning involves choice:
Planning is a decision-making process. It involves
thinking for alternatives (various ways to achive the objectives) and select
only one among them which is best suitable to the concern. The need for
planning arises only when alternatives are available. If there is only one way
for doing something, there is no need for planning. So planning involves choice
from among various alternatives.
IMPORTANCE
OF PLANNING
Following are the importance of planning:
1.
Focusing attention on objectives:
Planning makes objectives clear and specific and
directed towards its attainment. Clearly stated objectives helps for selecting
the best course of action or what action should be taken.
2. Planning reduces uncertainty:
Planning is necessary because of future uncertainty
and change. It reduces the risk of uncertainty and change. It enables the concern
to predict future events and prepare to face the unexpected events.It
identifies possible changes or optential dangers and helps to take steps to
overcome such changes or dangers. Thus planning is helpful in assessing
and meeting future challenge.
3. Facliltates control:
Planning provides a standard, against which the
actual performance can be evaluated. Without planning there is no control,
because comparison of actual performance to planned performance is the basis of
control. Thus planning makes control meaningful and so we considered it as the
basis of control.
4. Helps in effective coordination:
Planning gives direction to managers and non-managers
what to do, when, where and how. This helps them to understand their role and
they work cooperatively with each other as a team.Moreover it also helps to
coordinate their activities. Thus planning brings overall coordination in an
organisation.
5.Guides decision making:
Planning helps in decision making by selecting the
best alternatives among various alternatives.By predicting future, planning
helps in future oriented decisions.
6. Encourages innovation and creativity:
Planning encourages the employees to think and find
the better and different methods and procedures to achive the desired
objectives. Such a thinking helps to develop new ideas and aply these ideas to
create new products and services, which leads to the growth and expansion of a
business.
TYPES
OF PLANNING
Plans are of several
types like Goals, Objectives, Ploicies, Procedures,Rules, Methods, Programmes
and Budgets.This can be arranged in a hierarchy because a higher level plans
gives/generates lower level plan as presented:
1.Goal
or Purpose or Mission:
Goal is a desired state
of affairs, which an organisation wants to realise. Goals are collective ends
towards which organisations directs their energies and activities. An
enterprise achieve the goals by fulfilling various objectives. They are long
term in nature.
2.
Objectives:
Objectives are the ends towards which activities are aimed and the results to
be achieved.They are the result to be achieved with in a limited time.
Goals are the basic plans of the business,but department have also its own
objectives.They are related to a specific topic which can be measured and stated
in quantitative terms.
3.
Policies:
Policies are general statements which provides guidelines to managers for
taking various decisions. They only provide a framework within which decisions
must be made by the management in different spheres.It does not provide a
detailed answer to a situation but guides the subordinates.They deals
with"how to do" but not state the terms to subordinates.
4.
Procedures:
Procedures are derived form policies.Procedures are the steps established to
handle future activities. They are detailed guidelines based on policies used
for doing the work for the attainment of objectives. They are the orderly and
systematic way of doing a particular job.
5.
Rules:
Rules are detailed and recorded instructions tghat a specific action must or must
not be taken in a given situation. They are the decisions made by the
management. It contains specific regulations that must be followed by the
employees in an organisation without considering the time sequence.They
facilitate discipline and uniformity in action in the organisation.
Example:
Office opens at 8.00Am, No smoking, etc.
6.
Methods:
Methods are formalised and standardised way of doing a repetitive and routine
jobs.They are designed for doing the activities as per planned and desired way,
to prevent confusion and ad-hocism and ensure economy and efficiency. Methods
makes a work simple, standard and systematic and act as a uniform norms to
guide and control operations and performance.
7.
Programmes:
Programmes includes all the actions necessary for achieving a given
objective.They are a combination of goals, policies, procedures, rules, task
assigned, steps to be taken, resources to be employed and other elements
necessary to carry out a given course of action. They are ordinarily supported
by budgets.
8. Budget:
A budget ia a statement of expected results expressed in numerical terms. It is
also known as "Numbered Programme". They are the anticipated
operating results over some period of time, normally one year and stated
as a basis for measuring performance. Abudgety may be expressed either in
financial terma or in quantitative terms or in both. It is a major tool of
control in the hands of management.
STEPS
OF PLANNING
Following are the various
steps involved in planning:
1. Setting objectives
2. Develop planning premises
3. Determine alternative course of action
4. Selecting the best alternative
5. Formulating derivative plans
6. Implementation of plans
7. Follow up
1.
Setting objectives:
Plans are prepared to achieve certain objectives. Therefore the first step in
planning is defining clearly the objectives of the organisation as a whole and
of each departments. The objectives provide guidelines for many vital decisions
and help to solve the problems that arise in future.
2.
Develop planning premises:
The 2nd step in the process of planning is to develop planning premises. They
are the assumptions about the future up on which planning is formulated. They
are the anticipated environment based on forecasting in which plans are
expected to operate. They are important for the success of planning because
they supply facts and informations about the future.
Example: Population trends, General economic conditions, Government control
etc.
3.
Determine alternative course of action:
The 3rd step in the planning process is to determine the various cources of
action. They are the different ways which can be used for the goal attainment.
4. Selecting the best alternative:
After determine the alternative cources of action,
the next step is to evaluate each alternatives in terms of expected cost and
benefits. After evaluating, select the best course of action, which will give
more advantages to the business.
5. Formulating derivative plans:
Once the main plan is laid down the next step is to develop various detailed
plans to support the main plan for its implementation. This detailed plans are
known as derivative plans or supporting plans. In other words , the breakup of
master plan on departmental wise and sectional wise to support the main plan is
called derivative plans.
6.
Implementation of plans:
The 6th step in the planning process is the implementation of plans. This means
putting the plans into action so as to achieve the business objectives. Successful
implementation of plans require wholehearted cooperation and understanding of
personnel. For this purpose, plans must be communicated and explained in
detaile to the workers.
7.
Follow up:
In order to fix that plans are proceeding in correct way it is necessary to
evaluate the plan in each and every stages of implementation. This helps in
detecting shortcommings and take remedial measures well in advance.
LIMITATIONS
OF PLANNING
Following
are the limitations of planning:
1. Lack of accuracy
2. Time and Costs
3. Resistance to change
4. False sense of security
5. Inflexibility
6. Limited scope
1. Lack of accuracy:
Planning is for future,but future is uncertain. The forecasted
information and facts may or may not be correct. No manager can predict
accurately and completely the events of future. So planning lacks accuracy.
2. Time and Costs:
Planning is time consuming and expensive process. It involves a lot of expenses
for forecasting, collection of information, evaluation of alternatives etc and
required considerable time. It is not practicable when situation demands
quick decisions.
3. Resistance to change:
Most people enerally do not like changes. They resist change due to fear of
failure and uncertainty. Unless the required changes are made, planning may be
ineffective.
4. False sense of security:
Planning may create a feeling that everything has been taken care of by the
plans and helps to achieve the business goals automatically. It affects independent
thinking and creativity of managers.
5. Inflexibility:
Planning makes entire organisational set up rigid and inflexible. Managers and
non-managers have to strictly follow the plans and there is no freedom. It
restricts the individual skill, initiative and creativity.
6. Limited scope:
The scope of planning is said to be limited due to certain factors like changes
in technology, changes in Government policies, competitors actions, strike
etc.Over which management has no control, which affects the planning process.
End
