Chapter - 4
Planning
Planning is the first function of management. It is
theforcastingof the [Link] is deciding in advance
what is to be done , how it is to be done when it is to be
done and by whom it is to be done.
Meaning:
Planning, involves setting objectives and developing
appropriate courses of actionto achieve these objectives.
Importance of planning
[Link] directions:
In planning goals are determined. If goals are well defined,
employees are aware of what the organization has to do
and what they must do to achieve the goals.
2. Reduces the risks of uncertainty:
Future is uncertain which mean noon can product the
future accurately but planning helps in reducing the risk by
doing changes according to the needs.
[Link] overlapping and wasteful activities: Through
planning everyone comes to know about the things which
they need to do and in what way or method. As everyone
knows what to do and how to do there is no overlapping of
work.
4. Promotes innovative ideas: In planning new ideas taken
place put into concrete ideas thus it is a challenging
activity which help the managers to grow and lead to the
growth of business.
5. Facilitate decision making: In planning managers have
to evaluate each alternatives its merits and demerits. Thus
helps in taking rational decisions.
6. Establishes standards for controlling: Planning
provides standards against which actual performance is
measured. By comparing actual performance with the
standard, managers can know whether they have actually
been able to attain.
FEATURES OF PLANNING
1. Planning focuses on achieving objectives:Every
organization has an objective. It is the planning
function that sets the objectives.
2. Planning is a primary function of management:It lays the
foundation for other jobs. All other functions can be
done only after doing planning.
3. Planning is pervasive: Planningis required at all levels
ofmanagement as well as in alldepartments of the
organisation.
4. Planning is continuous: Plansare prepared for a
specific periodof time, may be for a month, aquarter, or
a year. At the end ofthat period there is need for a
newplan to be drawn on the basis ofnew requirements
and futureconditions. Hence, planning is acontinuous
process.
5. Planning is futuristic: In planning forecasting about the
future is made. Through forecasting future events and
conditions are anticipated and plans are done
accordingly.
6. Planning involves decision making:InPlanning
evaluation of different alternatives is done and one
alternative is selected. Thus there is definitely one
decision making.
7. Planning is a mental exercise: It requires application of
mind involving foresight and intelligence. It is an
intellectual process of thinking.
Limitations of planning:
1. Planning leads to rigidity: Inan organisation, a well-
defined plan is drawn up with specificgoals to be
achieved within aspecific time frame. Following a
predecidedplan, when circumstanceshave changed,
may notturn out to be in the organisationsinterest.
2. Planning may not work in a dynamic environment:
The business environment is dynamic, nothing is
constant. The environment consists of a number of
dimensions, economic, political, physical, legal and
social dimensions. Change in this dimension may
effect the business.
3. Planning Reduces Creativity: Only top level managers
are allowed to make the [Link] the planning
the middle and lower managers of the organisation
start working rigidly and they become the blind
followers of the plan only.
4. Planning Involves Huge Costs planning process
involves lot of cost because it is an intellectual
process and companies need to hire the professional
experts to carry on this process.
5. Planning is a Time Consuming Success Lot of time
is needed in developing planning premises. Where
immediate decisions has to be taken this planning is
of no use.
6. Planning does not Guarantee success Planning only
provides a base for analysing future. It is not a
solution for future course of action.
Planning Process:
(i) Setting Objectives: In planning function manager
begin with setting up of objectives because all the
policies procedures and methods are framed for
achieving objectives only.
(ii) Developing Premises: Premises refers to making
assumptions regarding future. The assumptions
are made on the basis of forecasting. Forecast is
the technique of gathering information. Interest
rate, Tax rate etc. is anticipated.
(iii) Identifying Alternative Courses of Action: After
setting up of objectives the managers make a list
of alternatives through which the organisation
can achieve its objectives
.
(iv) Evaluating Alternative Courses: After making the
list of various alternatives along with the
assumptions supporting them the manager starts
evaluating each and every alternative with its
positive and negative aspects.
(v) Selecting an Alternative The best. Alternative is
selected but as such there is no mathematical
formula to select the best alternative. Sometimes
instead of selecting one alternative a combination
of different alternatives can also be selected.
(vi) Implementing the Plan: This is the step where
other managerial functions also come in to the
picture. The step is concerned with putting the
plan into action i.e., doing what is required.
(vii) Follow-up Action Planning is a continuous
process so the manager’s job does not get over
simply by putting the plan into action. The
manager monitor the plan carefully while it is
implemented.
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