Planning
- Planning is the first function which is basically a logical thinking process that decides what needs to
be done in order to achieve organization's goals and objectives.
- Planning not only provides direction and unity of purpose for organization, but also answers 6 basic
questions in any regards to an activity :-
- What needs to be accomplished or done?
- What is the deadline?
- Where it will be done?
- Who will be responsible for it?
- How will it get done?
- How much time, energy and resources are required to accomplish the goal?
Definition of Planning
- Planning is a process of deciding in advance what is to be done, who is going to do it, how it is to
be done and when it is to be done.
- Planning is a systematic development of action of programmes aimed at reaching agreed business
objectives by process of analyzing, evaluating and selecting among the opportunities which are
foreseen.
- Planning in other words can be defined as :-
- "It is today's projection for tomorrow's activity".
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.
- The purpose of planning is to :-
- Minimize risk of business by reducing the uncertainities.
- To increase the degree of organizational success.
- Primary purpose of Planning is to help the organization to reach its objectives.
Steps in Planning Process
- Establishing Objectives :-
- It is first step in planning process.
- Organizational and Unit (department) objectives are set.
- Organizational objectives give direction to major activities in the organization which then
define objective of every major department.
- Developing Planning Premises :-
- Planning premises is a condition under which planning activities will be undertaken.
- These are assumption about the enviromental and internal conditions.
- External Premises :- Political, social, technological, legal, govt. policies.
- Internal Premises :- Org. policies, various resource type and organization ability.
- Identification of alternatives :-
- Next step is to identify the alternatives.
- Various alternatives can be identified based on organizational objectives.
- "It suggest that to one problem there can be many solutions."
- Evaluation of objectives :-
- The next step is to evaluate alternative in light of objective and premises.
- The objectives/alternative are evaluated on basis of various factors such as in terms of
cost and risk involved, profits and availability of resources.
- The alternatives should give us the best chance of meeting the goals at low cost and high
profits.
- Selecting the Best Alternative Plan :-
- After evaluationg the next step is selection of best alternative plan which will help the
organization towards growth.
- Formation of supportive plan :-
- Next step after selecting the best alternative is to formulate a new support plan which will
support the overall plan.
Approaches of Planning :-
- Top to Down Approach
- Bottom-up Approach
- Mix of top-down and bottom-up approach
- Team Approach.
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 :-
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.