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- 2. "Some men see things as they are and ask, 'Why?" I dream things that never were and ask, 'Why not?'" Robert F. Kennedy CHAPTER OUTLINE Introduction Definition of Planning. Nature of Planning Objectives of Planning Steps involved in planning process Importance of Planning Kinds of Plans
- 3. INTRODUCATION Planning is a basic function of management. The effective performance of other managerial functions (organizing, staffing, directing and controlling) depends upon the effectiveness of planning. Planning establishes the objectives for the group and lays down steps to accomplish them. DEFINITION OF PLANNING A few definitions by some of the prominent writers on the subject are given below: (1) Planning means the determination of what is to be done, how and where is to be done, who is to do it, when and how the results are to be evaluated. James L. Landy
- 4. (2) Planning is deciding in advance what is to be done. It involves the selection of objectives, polices, procedures and programmes from among alternatives. M.E. Hurley
- 5. OBJECTIVES OF PLANNING Objectives of planning in business may be underlined : 1. Helpful in Forecasting Forecasting is the essence of planning . Really speaking ,planning is to prepare the plans for the organization on the basis of forecasting. Planning helps in effective forecasting. 2. Helpful in Facing the Competition Planning helps in forecasting the competition which will have to be faced by the organization. 3. Helpful in Accomplishment of Budgets Planning helps the management in accomplishing the pre-determined budgets of the enterprise in a planned way.
- 6. 4. To Forecast the Risks Planning helps in forecasting the risk that may be appear in the future . By forecasting the risks ,the strategies may be designed to treat with them effectively and successfully. 5. To Give Specific Direction. Planning gives specific direction to all the activities of an organization by preparing the outlines of these activities well in advance.
- 7. IMPORTANCE OF PLANNING Planning is vital importance in the managerial process. It results in the following advantages: 1. Emphasis on Objectives Planning is directed towards enterprise objectives. If the objectives are clearly laid down, all the business activities directed towards these objectives. 2. Minimizes Uncertainty It gives an opportunity to a manager to foresee various uncertainties which may be caused by changes in technology, fashion and taste sufficient provision can be made in the plans to meet these uncertainties 3. Facilitates Decision-Making Effective planning helps in taking decisions about type of organization, supervision and communication etc.
- 8. 4. Improves Coordination Planning helps in coordinating the activities of the department of the enterprise. 5. Facilitates Control Planning facilitates control. It is also true that corrective action under the control process may lead to modification of plans. 6. Economical Operations Efficient planning secures economy. Planning avoids wastage of resources by eliminating unnecessary activities in the enterprise. 7. Greater Efficiency Planning determines as to when and how various tasks to be performed by the different departments. This enhances the efficiency of various departments.
- 9. 8. Encourages Innovation Planning helps innovative and creative thinking. Many new ideas come to the mind of a manager when he is planning. 9. Improves Competitive Strength Effective planning gives a competitive edge to the enterprise over other enterprises that do not plan properly. KINDS OF PLANS Kinds of Plans may be described as follows: 1- Short-rang and Long-rang Plans Plans can be classified with respect to time. On this basis, planning can be classified into three categories, namely, short-term, medium-term and long-term.
- 10. Short term planning relates to a period of less than one year. Medium-term planning covers a period of over one year, but less than five years. The length of period should not be taken to be rigid or inflexible. It may vary from one business to another depending upon the nature of business, risks and uncertainties, government control, etc. Long-rang planning sets long term goals for the enterprise and formulates specific plans for maintaining these goals. 2- Corporate and Functional Plans Corporate planning is done by the top management. It covers the entire corporation. Functional planning covers a particular functional area of business. For instance, if planning pertains to finances of the enterprise, it is known as Financial Planning.
- 11. 3- Standing and Single-Use Plans Standing plans are also known as repeated use plans since they are designed to be used over and over again. They are formulated to guide managerial decisions and action on recurring problem. 4- Essentials of Planning Single-use plans are made for handling non-repetitive, new or unique problem. They are tailored to fit specific situations and they become obsolete after their use. STEPS INVOLVED IN PLANNING PROCESS In brief, the steps in planning process may be summarized as follows:- 1. Determination of Objectives The first step of the planning process is the determination of objectives. One cannot make plans and programmes unless and until he knows where he is and where he wants to go. Objectives must be clear and specific.
- 12. 2. Establishment of Planning Premises This includes forecasting, collection and analysis of data. It also includes the identification of key factors and key problems. 3. Determining Alternative Course of Action On the basis of forecasting, various alternatives open for an action is identified. 4. Evaluating Various Alternatives All the alternatives are studied and evaluated. A careful comparison of all the alternatives is made in the light of the objectives expected from planning. 5. Making a Choice On the basis of comparative study of all the alternatives, the best course of action is chosen.
- 13. 6. Preparation of Plan Once a basic plan is decided, sub plans are prepared for the implementation of this basic plan. 7. Timing and Sequence of Operation The schedule is determined for the execution of plans. Along with this sequence of operations is also carefully decided. 8. Follow-up Action Follow-up actions are required to see whether the activities are being carried out in accordance with the plans and programmes. Follow up action is also required to see that the plans are being implemented in the time schedule fixed for them.