PLANNING

Meaning
Planning is the most crucial and foremost function of management. It is defined as the
process of setting goals and choosing the means to achieve those goals. A sound
planning is inperative for the successful achievement of the goals in the desired
direction. It is rightly said well plan is half done. It involves setting of objectives
and goals, designing appropriate strategy and cource of action, and framing plans and
procedure etc for execution of the proposed activities under the project.
Definitions
According to George R Terry, Planning is the selecting and relating of facts and
making and using of assumptions regarding the future in the visualization and
formulation of proposed activities believed necessary to achieve desired results.
According to Henry Fayol, Planning is deciding the best alternatives among others
to perform different managerial operations in order to achieve the predetermined
goals.
Generally speaking, planning is deciding in advance what is to be done, that is, a plan
is a projected course of action.

Features of Planning

1. Planning is looking in to the future

2. It involves predetermined lines of action
3. Planning is a continuous process
4. Planning integrates various activities of an organization
5. Planning is done for a specific period
6. It discovers the best alternatives out of available alternatives
7. Planning is a mental activity
8. Planning is required at all levels of Management
9. It is the primary functions of Management]
10. Growth and prosperity of any organization is depends upon planning

Objectives of Planning

Planning in organization serve to realize the following objectives:

1. To reduces uncertainty
2. To bring co-operation and co-ordination in the organisation
3. To bring economy in operations
4. Helps to anticipate unpredictable contingencies
5. To achieve the pre determined goals
6. To reduce competition.

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Advantages of Planning

Planning helps the organization to achieve its objectives easily. Some of the
advantages of planning are given below:
1. It helps the better utilization of resources
2. It helps in achieving the objectives
3. It helps in achieving economy in operations
4. It minimizes future uncertainties
5. It improves competitive strength
6. It helps effective control
7. It helps to give motivation to the employees
8. It develop rationality among management executives
9. It reduces red tapism
10. It encourages innovative thought
11. It improves the ability to cope with changes.
12. It create forward looking attitude in Management
13. It helps in delegation of authority
14. It provide basis for control

Planning Process
It is not necessary that a particular planning process is applicable for all
organization and for all types of plans because the various factors that go into
planning process may differ from plan to plan or from one organization to another.
This can be presented by using the following diagram.

Perception of Establishing Planning Identification of

Opportunities objectives Premises policies

Establishing Formulation of Selection of Evaluation of

sequence of supporting plans alternatives alternatives
activities

Perception of Opportunities:- It is the beginning of planning process. ThisProvides

an opportunity to set the objectives in real sense. It helps to take the advantage of
opportunities and avoid threats. Once the opportunities are perceived, the other steps
of planning are undertaken.

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1. Establishing the objectives:- This stage deals with the setting of major
organisational and unit objectives. The organizational objectives should be specified
in all key areas. Once organizational objectives are identified, objectives of lower
units can be identified in that context.
2. Establishing planning premises:- It means deciding the condition under which
planning activities will be undertaken. Planning premises may be external or internal.
The nature of planning premises differs at different levels of planning.
3. Identification of alternatives:- This point says that a particular objectives can be
achieved through various actions. Since all alternatives cannot be considered for
further analysis, it is necessary for the planner to reduce the number of alternatives.
4. Evaluation of alternatives: - Various alternatives which are considered feasible
may be taken for detailed evaluation. It is evaluated on the basis of contribution of
each alternative towards the organizational objectives in the light of its resources and
constraints.
5. Selection of alternatives: - After the evaluation, the most fit one is selected. At the
same time a planner must be ready with alternatives, normally known as contingency
plans, which can be implemented in changed situation.
6. Developing supporting plans: - After formulating the basic plan, various plans are
devised to support the main plan. These plans are known as derivative plans.
7. Establishing sequence of activities: - After formulating basic and derivative plans,
the sequence of activities is determined, so that plans are put in to action.

Types of Plans
A manager is required to develop a number of plans to achieve the organizational
objectives. Three major types of plans can help managers to achieve their
organizational goals.

1. Operational Plans
2. Tactical Plans
3. Strategic Plans

1.Operational Plans: It is one that a manager uses to accomplish his or her job
responsibilities. In other words, it is the plan used to achieve operational goals.
Operational goals are the specific result expected from the departments, work groups
and individuals. Operational plans may be single use plans or ongoing plans.

a. Single use plans: It is applied to those activities which do not recur or repeat. A
special sales programme is an example of single use plan, because , it deals with the
who, what, where, how and how much of an activity. It includes:

(i)Budget: It is a statement of expected results expressed in quantitative terms for a

definite period of time. It is prepared keeping in view the objectives , resources and of

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the enterprise. It is a useful control device and helpful in co-coordinating the
activities. It predicts sources and amounts of income and how much they are used for
a specific project.

(ii)Programme: It is a sequence of activities to be undertaken for implementing the

policies and achieving the objectives of an organization. It tells what is to be done to
achieve the goals.

b. Continuing or ongoing plans: These are usually made once and retain their value
over a period of years while undergoing periodic revision and updates. The following
plans are included in this category.
(i)Policy: It provides broad guidelines for managers to follow when dealing with
important areas of decision making. It is basically a general statement that explains
how a manager should attempt to handle routine management responsibilities. They
are standing answers to recurring questions.
(ii)Procedures: A procedure is a set of step by step direction that explains how
activities or task are to be carried out. An established procedure ensures uniformity of
action. Most organization has procedures for purchasing supplies and equipments. By
defining steps to be taken and the order in which they are to be done, procedures
provide a standardized way of responding to a repetitive problem.
(iii) Rules: It is an explicit statement that tells an employee, what he or she can and
cannot do. Rules are definite and rigid. Rules are do and dont statements put
into place to promote the safety of employees and the uniform treatment and behavior
of employees. For eg. Rules about absenteeism permit supervisors to make discipline
decision rapidly and with a high degree of fairness.
2. Tactical Plans: These are plans which usually span one year or less. It 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.
3. Strategic Plan: It is an outline of steps designed with the goals of the entire
organization in mind, rather than with the goals of specific divisions. It look ahead
over the four, five or even more years to move the organization from where it
currently to where it wants to be. Top managements strategic plan for the entire
organization becomes the frame work and sets dimension for the lower level planning.
Contingency Plan: These plans are used when the original plan proves inadequate
because of changing circumstances.

Limitations of Planning

Following are the limitations of Planning

1. Time consuming: The management cannot prepare any plan without taking much
time. A number of steps are required to complete planning process.
2. Costly: It is considered as an expensive process. A lot of money is to be spent for
collection, analysis and editing of data.

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3. False sense of security: The management people think that there is security, if
planning is properly adhered. But this is not true in practice.
4. Technological changes: The management is not in a position to change its policies
according to technological changes. It will affect the planning process.
5. Political climate: A change in the political climate leads to a change in the policy
and attitude towards different financial aspects. It will affect the planning process.
6. Lack of reliable data: The success of all the plans are based on the availability of
reliable data. It is very difficult to procure reliable data.
7. Initiative: Planning compels everyone to work as per plan. It reduces the scope for
initiation from the part of employees and they will become more mechanical.
8. Limitations of forecasts: Planning is fully based on forecasts. If there is any defect
in forecasts, the planning will lose its value.