Nature of Planning

1) Planning is goal-oriented: Every plan must contribute in some positive way towards The accomplishment of group objectives. Planning has no meaning without being related to goals. 2) Primacy of Planning: Planning is the first of the managerial functions. It precedes all other management functions. 3) Pervasiveness of Planning: Planning is found at all levels of management. Top management looks after strategic planning. Middle management is in charge of administrative planning. Lower management has to concentrate on operational planning. 4) Efficiency, Economy and Accuracy: Efficiency of plan is measured by its contribution to the objectives as economically as possible. Planning also focuses on accurate forecasts. 5) Co-ordination: Planning co-ordinates the what, who, how, where and why of planning. Without co-ordination of all activities, we cannot have united efforts. 6) Limiting Factors: A planner must recognize the limiting factors (money, manpower etc) and formulate plans in the light of these critical factors. 7) Flexibility: The process of planning should be adaptable to changing environmental conditions. 8) Planning is an intellectual process: The quality of planning will vary according to the quality of the mind of the manager.

Importance of Planning
As a managerial function planning is important due to the following reasons:1. To manage by objectives: All the activities of an organization are designed to achieve certain specified objectives. However, planning makes the objectives more concrete by focusing attention on them. 2. To offset uncertainty and change: Future is always full of uncertainties and changes. Planning foresees the future and makes the necessary provisions for it. 3. To secure economy in operation: Planning involves, the selection of most profitable course of action that would lead to the best result at the minimum costs. 4. To help in co-ordination: Co-ordination is, indeed, the essence of management, the planning is the base of it. Without planning it is not possible to co-ordinate the different activities of an organization. 5. To make control effective: The controlling function of management relates to the comparison of the planned performance with the actual performance. In the absence of plans, a management will have no standards for controlling other's performance.

6. To increase organizational effectiveness: Mere efficiency in the organization is not important; it should also lead to productivity and effectiveness. Planning enables the manager to measure the organizational effectiveness in the context of the stated objectives and take further actions in this direction.

Advantages of Planning
a) All efforts are directed towards desired objectives or results. Unproductive work and waste of resources can be minimized. b) Planning enables a company to remain competitive with other rivals in the industry. c) Through careful planning, crisis can be anticipated and mistakes or delays avoided. d) Planning can point out the need for future change and the enterprise can manage the change effectively. e) Planning enables the systematic and thorough investigation of alternative methods or alternative solutions to a problem. Thus we can select the best alternative to solve any business problem. f) Planning maximizes the utilization of available resources and ensures optimum productivity and profits. g) Planning provides the ground work for laying down control standards. h) Planning enables management to relate the whole enterprise to its complex environment profitably.

Disadvantages of Planning
a) Environmental factors are uncontrollable and unpredictable to a large extent. Therefore planning cannot give perfect insurance against uncertainty. b) Planning is many times very costly. c) Tendency towards inflexibility to change is another limitation of planning. d) Planning delays action. e) Planning encourages a false sense of security against risk or uncertainty.

Planning Process
The planning process involves the following steps: 1. Analysis of External Environment: The external environment covers uncontrollable and unpredictable factors such as technology, market, socio-economic climate, political conditions etc., within which our plans will have to operate. 2. Analysis of Internal Environment: The internal environment covers relatively controllable factors such as personnel resources, finance, facilities etc., at the disposal of the firm. Such an analysis will give an exact idea about the strengths and weakness of the enterprise.

3. Determination of Mission: The "mission" should describe the fundamental reason for the existence of an organization. It will give firm direction and make out activities meaningful and interesting. 4. Determination of Objectives: The organizational objectives must be spelled out in key areas of operations and should be divided according to various departments and sections. The objectives must be clearly specified and measurable as far as possible. Every member of the organization should be familiar with its objectives. 5. Forecasting: Forecasting is a systematic attempt to probe into the future by inference from known facts relating to the past and the present. Intelligent Functions of Management forecasting is essential for planning. The management should have no stone unturned in reducing the element of guesswork in preparing forecasts by collecting relevant data using the scientific techniques of analysis and inference. 6. Determining Alternative course of Action: It is a common experience of all thinkers that an action can be performed in several ways, but there is a particular way which is the most suitable for the organization. The management should try to find out these alternatives and examine them carefully in the light of planning premises. 7. Evaluating Alternative Courses: Having sought out alternative courses and examined their strong and weak points, the next step is to evaluate them by weighing the various factors. 8. Selecting the Best: The next step - selecting the course of action is the point at Which the plan is adopted. It is the real point of decision-making. 9. Establishing the sequence of activities: After the best programmed is decided Upon, the next task is to work out its details and formulate the steps in full sequences. 10. Formulation of Action Programmers: There are three important constituents of An action plan: a) The time-limit of performance. b) The allocation of tasks to individual employees. c) The time-table or schedule of work so that the functional objectives are achieved within the predetermined period. 11. Reviewing the planning process: Through feedback mechanism, an attempt is made to secure that which was originally planned. To do this we have to compare the actual

performance with the plan and then we have to take necessary corrective action to ensure that actual performance is as per the plan.

OBJECTIVES
Objectives may be defined as the goals which an organisation tries to achieve. Objectives are described as the end- points of planning. According to Koontz and O'Donnell, "an objective is a term commonly used to indicate the end point of a management programme." Objectives constitute the purpose of the enterprise and without them no intelligent planning ncan take Features of Objectives The objectives must be predetermined. A clearly defined objective provides the clear direction for managerial effort. Objectives must be realistic. Objectives must be measurable. Objectives must have social sanction. All objectives are interconnected and mutually supportive. Objectives may be short-range, medium-range and long-range. Objectives may be constructed into a hierarchy. Advantages of Objectives Clear definition of objectives encourages unified planning. Objectives provide motivation to people in the organisation. When the work is goal-oriented, unproductive tasks can be avoided. Objectives provide standards which aid in the control of human efforts in an organisation. Objectives serve to identify the organisation and to link it to the groups upon which its existence depends. Objectives act as a sound basis for developing administrative controls. Objectives contribute to the management process: they influence the purpose of the organisation, policies, personnel, leadership as well as managerial control. Process of Setting Objectives

Objectives are the keystone of management planning. It is the most important task of management. Objectives are required to be set in every area which directly and vitally effects the survival and prosperity of the business. In the setting of objectives, the following points should be borne in mind. 1. Objectives are required to be set by management in every area which directly and vitally affects the survival and prosperity of the business.

2. The objectives to be set in various areas have to be identified. 3. While setting the objectives, the past performance must be reviewed, since past performance indicates what the organisation will be able to accomplish in future. 4. The objectives should be set in realistic terms i.e., the objectives to be set should be reasonable and capable of attainment. 5. Objectives must be consistent with one and other. 6. Objectives must be set in clear-cut terms. 7. For the successful accomplishment of the objectives, there should be effective communication.