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Planning

Definition of Planning

Features of Planning :-

Planning is Goal Oriented :-

  • Objective provides basic guidlines for planning activities.
  • The goals established should be generally accepted otherwise efforts and energies will go misguide and misdirected.

Planning is looking ahead :-

  • It means looking ahead and preparing for future.
  • It means looking into future, analysing it and preparing for it.
  • Without planning business becomes random in nature and decisions would become meaningless.

Planning is Mental Exercise :-

  • It is a mental process involving creative thinking imagination and sound judgement.
  • It makes think in a logical and systematic manner.
  • Plans are based on careful study of internal and external factors influencing business activities.

Planning is a Continous Process :-

  • It is never ending process/activity due to dynamic business environment.
  • Planning is thus an ongoing process of adjustment to change.
  • There is always a need for a new plan to be drawn on the basis of new demand and changes in the circumstances.

Planning is Pervasive(power to spread thought) :-

  • Planning is a function of all Managers.
  • It is needed at all levels of management and in all departments of enterprise.
  • Managers have to plan before launching a new business.
  • They have to plan whenever things change.

Planning involves choice :-

  • Planning involves choices among various alternative sources of actions.
  • There is no need of doing planning, if there there is only one way of doing something.
  • The need of planning arise only when alternatives are available.

Planning is flexible :-

  • Planning is done for future and since future is unpredictable, planning must provide enough room to cope with changes in customer's demand, competition, govt. policies, etc.

Purpose of Planning.

Steps in Planning Process

Approaches of Planning :-

Top Down

  • Planning is done at the top of corporation & departments are advised straight away what to do.

Bottom Up

  • Top management asks the departments to submit plans.

Types of Plans :-

  1. Strategic Plan
    • Strategic Plans refers to the ideas, plans that supports the firm to compete sucessfully against the rival firms.
      They also guide the organization leader's in decision making and moving forward of organization. It also evaluates the strength, weakness of organization.
  2. Operational Plan
    • Operational Plans refers to the process of planning strategic goals and obectives. They are short term in nature.
      It is basically detailed plan that provides a clear picture that how a particular department will contribute to the achievement of organization goals.
  3. Tactical or coordinative plan
    • Tactical or coordinative plan refers to as a systematic determination and scheduling of immediate or short term activities required in achieving the objectives of strategic planning. It also refers to as immediate planning.
    • Functional plan refers to as unit plan. It deals with different functional units of an organization on such as production marketing, finance.
  4. Long term and short term
    • Long range plan refers to a plan that deals with establishing missing objective and long term goals and stratergies.
      Long term plans are designed by top management and it takes time of 5 years or more risk is high as due to high level of uncertainity.
    • Short term plan refers to a plan that deals with the current operations of an organization.
      Short term plans are designed by lower level executives and it can be of one year or less short term plans are time bounded so the risk associated is low in it.
  5. Functional and corporate plan
    • Corporate plan outlines the broad objectives of the company as a whole and develop plans designed to meet those objectives. It is integrative in nature. It takes a long term view. Corporate plan is designed by the top management and its focus is always on overall organizational performance.
  6. Proactive and reactive plan
    • Proactivce plan refers to as a way of thinking about managing the future risk and challenges. It tries to resolve the future contingencies, with the help of alternate plans and actions, redefining and reshaping the future.
    • Reactive plan refers to as a plan focus on getting rid of problem through a solution.
      The organization reacts to external events.
      Ex; Automobile companies have found that fuel efficiency is going to be the most important demand of customers, registering growth, while companies that fail to visualise it are no longer in existence (Fiat, Ambassador). 
      In present the reactive planning is costly.