MODULE – 1

MANAGEMENT & PLANNING

Lesson Contents:
Management: Introduction Meaning nature and characteristics of Management, Scope and
Functional areas of management, Management as a science, art of profession Management &
Administration Roles of Management, Levels of Management, Development of Management
Thought early management approaches – Modern management approaches.
Planning: Nature, importance and purpose of planning process Objectives Types of plans
(Meaning Only) Decision making Importance of planning steps in planning & planning premises
Hierarchy of plans.

Management: Introduction
Definition:
Management is a systematic process that involves planning, organizing, leading, and controlling
an organization’s resources—human, financial, material, and informational—to specific goals
efficiently and effectively. It encompasses coordinating the efforts of people and utilizing
resources to fulfill the organization's objectives. Management is not just about managing
resources but also about fostering the ability to adapt and innovate in a changing environment.
Characteristics of Management
1. Goal-Oriented:
The primary characteristic of management is its focus on achieving specific organizational goals.
Every action taken by management is directed towards meeting these goals. This goal-oriented
nature ensures that all the activities within the organization are aligned and directed towards the
accomplishment of the objectives.
For instance, a company's goal might be to increase market share, improve customer satisfaction,
or enhance product quality. Management will structure its strategies and allocate resources to
ensure these goals are met effectively.
2. Universal Application:
Management principles are universally applicable, regardless of the type of organization,
whether it’s a small startup, a large multinational corporation, a government body, or a non-
profit organization. The fundamental functions of management—planning, organizing, leading,
and controlling—are relevant in all contexts. This universality ensures that management
techniques can be adapted to suit the needs of different sectors and industries, including
education, healthcare, and public administration.
3. Group Activity:
Management inherently involves teamwork and coordination. It is a collaborative effort where
managers work with and through other people. Effective management harnesses the collective
strengths of individuals to achieve common goals. This group-oriented nature of management
fosters a sense of belonging and unity among employees, motivating them to work together
efficiently. It is about aligning personal objectives with organizational goals, thus ensuring that
the collective effort leads to success.
4. Dynamic Function:
Management is not a static process; it is dynamic and must continuously adapt to changes in the
external and internal environment. Factors such as technological advancements, economic
fluctuations, changes in consumer preferences, and legal regulations require management to be
flexible and innovative. Effective managers are proactive, anticipating changes, and responsive,
adapting strategies and processes to meet new challenges. For example, a shift in market trends
may prompt a company to alter its product line or marketing strategies.
Scope and Functional Areas of Management
Scope of Management:
The scope of management is extensive, covering a broad range of activities in various sectors. It
applies to business enterprises, government agencies, educational institutions, healthcare
organizations, and non-profit entities. Management involves the coordination of resources to
ensure efficiency and effectiveness in achieving organizational goals. The scope includes not
only operational aspects but also strategic decision-making, resource allocation, and the
development of policies and practices that guide the organization.
Functional Areas of Management:
Management is categorized into several functional areas, each with specific responsibilities and
activities:
1. Planning:
Planning is the foundational function of management. It involves setting objectives and
determining the best course of action to achieve those objectives. Planning requires decision-
making about what needs to be done, how it should be done, when it should be done, and by
whom. It involves forecasting future conditions, setting goals, and developing strategies to meet
those goals. For instance, a company may plan its production schedule, financial investments, or
marketing campaigns based on market research and analysis.
2. Organizing:
Organizing involves arranging resources and tasks to achieve the objectives set in the planning
phase. It includes defining roles and responsibilities, establishing a hierarchy of authority, and
allocating resources effectively. Organizing creates a structured framework within which work is
divided, coordinated, and supervised. It ensures that the right people are in the right positions and
that there is a clear line of communication. For example, a company may create different
departments such as sales, marketing, finance, and human resources, each with specific functions
and responsibilities.
3. Staffing:
Staffing is the process of recruiting, selecting, training, and developing the organization’s
workforce. It involves finding the right people for the right job, ensuring that the organization
has a competent and skilled workforce. Staffing also includes employee development through
training programs, performance appraisals, and career planning. This function ensures that the
organization has the human resources necessary to meet its goals and objectives. For instance, a
technology company might invest in training programs to keep its employees updated with the
latest technological advancements.
4. Leading:
Leading, or directing, is about influencing and motivating employees to perform their tasks
effectively. It involves leadership, communication, motivation, and supervision.
Leading ensures that employees are guided and inspired to work towards the organization’s
goals. It creates a positive work environment, encourages teamwork, and helps in managing
conflicts. A good leader sets a vision for the organization, communicates effectively, and
motivates employees by recognizing their contributions and providing opportunities for growth.
5. Controlling:
Controlling is the process of monitoring and evaluating the organization’s progress towards its
goals. It involves setting performance standards, measuring actual performance, and taking
corrective actions when necessary. Controlling ensures that organizational activities are aligned
with the set plans and objectives. It helps in identifying deviations from the plan and
implementing necessary adjustments. For example, a company may use financial audits,
performance reviews, and quality control measures to ensure that its operations are efficient and
effective.

Management as Science, Art, and Profession

Management can be understood and approached from three different perspectives: as a science,
as an art, and as a profession. Each perspective highlights a unique aspect of management,
demonstrating its complexity and the multifaceted skills required to be effective.
1. Management as a Science
● Systematic Body of Knowledge:
Management qualifies as a science because it has a structured and systematic body of
knowledge. This knowledge is based on a set of theories and principles that have been developed
through observation, research, and experimentation over time. Just like scientific disciplines,
management principles are formulated after careful analysis and empirical testing of real-world
organizational situations. These principles provide a framework that managers can use to predict
outcomes and solve problems.
● Principles Based on Experimentation and Observation:
The principles of management, such as the principles of planning, organizing, leading, and
controlling, are based on empirical evidence. For example, the principle of unity of command—
suggesting that each employee should receive orders from only one superior to avoid
confusion—is derived from observing how organizations function effectively. Similarly,
scientific management theories by F.W. Taylor are based on time and motion studies aimed at
improving efficiency through systematic observation and analysis.
● Predictability and Cause-Effect Relationships:
Management science focuses on understanding the cause-and-effect relationships within
organizational settings. By applying scientific methods, managers can predict certain outcomes,
making management a more precise and reliable practice. For instance, implementing strict
quality control measures based on scientific principles can predictably reduce defects in
production.

2. Management as an Art
● Requires Personal Skills and Creativity:
Management as an art emphasizes the personal skills, creativity, and intuition that managers
must possess to handle diverse situations effectively. Unlike scientific management, which relies
on established principles, art focuses on the personal style and unique approach of managers.
Successful managers are often those who can creatively solve problems, innovate, and inspire
their teams. For example, a manager might use their interpersonal skills to motivate employees
during times of change or use creative problem-solving to navigate a crisis.
● Application of Knowledge:
While scientific principles provide a foundation, the art of management lies in the application of
these principles in real-life scenarios. Managers must interpret and adapt theoretical knowledge
to suit specific circumstances. This requires judgment, experience, and a deep understanding of
human behavior. For instance, managing a team in a creative industry like advertising may
require a different approach compared to managing a team in a manufacturing setting.
● Practice and Experience:
Like any art form, management improves with practice. Experience plays a crucial role in honing
managerial skills. The more a manager engages in various situations, the more adept they
become at handling different challenges. Mastery in management, much like in painting or
music, is achieved over time through continuous learning and practice. This experiential learning
helps managers refine their intuition and decision-making abilities.

3. Management as a Profession
● Specialized Knowledge:
Management is increasingly being recognized as a profession due to its specialized body of
knowledge. It involves a set of skills and expertise that can be acquired through formal education
and training. Business schools and universities offer specialized programs in management,
providing students with theoretical and practical knowledge. This education equips future
managers with the necessary tools to handle organizational challenges effectively.
● Professional Standards and Code of Conduct:
As a profession, management adheres to certain standards and ethical guidelines. Professional
bodies and associations, such as the American Management Association (AMA) and the
Chartered Management Institute (CMI), promote these standards, ensuring that managers
maintain integrity and responsibility in their roles. These organizations advocate for a code of
conduct that managers should follow, emphasizing ethical behavior, accountability, and the
welfare of stakeholders.
● Recognition and Certification:
The professional aspect of management is further validated by certification programs and
credentials. Certifications such as the Project Management Professional (PMP) or Certified
Management Consultant (CMC) signify a manager’s commitment to continuous professional
development and adherence to industry standards. These certifications not only enhance the
credibility of managers but also set benchmarks for competence and expertise.

Management and Administration

Management vs. Administration:
● Management Focuses on Implementation:
Management is primarily concerned with implementing the policies and strategies set by the
administration. It involves the day-to-day operations of an organization, ensuring that tasks are
carried out efficiently and effectively to meet organizational goals. Managers are responsible for
executing plans, organizing resources, leading teams, and monitoring performance. They are the
executors who bring administrative directives to life. For example, a manager in a company
would focus on organizing staff, overseeing projects, and ensuring that operations align with the
company's strategic objectives.
● Administration Focuses on Policy Formulation:
Administration, on the other hand, is concerned with formulating policies, setting objectives, and
making high-level strategic decisions. Administrators are involved in defining the mission,
vision, and long-term goals of the organization. They create the framework within which
management operates. In a governmental context, for example, administrators would set policies
regarding public welfare programs, while managers would implement these policies on the
ground.

● Scope and Level of Authority:

Administration typically operates at the top level of an organization and has a broader scope,
dealing with the overall structure and direction of the organization. It involves setting rules and
guidelines that govern the organization's operations. Management, however, works within the
framework set by the administration and has a narrower scope focused on operational efficiency.
Managers work at various levels—top, middle, and lower—depending on their specific roles
within the organization.
● Examples of Differences:
In a university setting, the administration would be responsible for setting academic policies,
budgeting, and strategic planning (e.g., introducing new programs or expanding campuses).
Management would be responsible for the implementation of these policies, such as hiring
faculty, scheduling classes, and ensuring that resources are used effectively to enhance the
educational experience.

Management & Administration

1. Roles of Management
Management roles are crucial for guiding and overseeing the operations of an organization.
According to Henry Mintzberg, there are ten managerial roles, which can be categorized into
three primary groups:
● Interpersonal Roles:
○ Figurehead: As the symbolic leader, the figurehead represents the organization in
various ceremonial and social contexts. This role involves performing duties such as
attending official events and representing the company in public forums.
○ Leader: In this role, managers are responsible for motivating, guiding, and developing
their team members. They set goals, provide direction, and foster a positive work
environment to enhance team performance.
○ Liaison: Managers acting as liaisons build and maintain relationships with external
entities and stakeholders. This role involves networking, forming partnerships, and
facilitating communication between the organization and its external environment.
● Informational Roles:
○ Monitor: This role involves gathering, analyzing, and interpreting information from
internal and external sources. Managers need to stay informed about trends,
developments, and issues that could impact the organization.
○ Disseminator: Managers in this role share important information with team members
and other stakeholders. They ensure that relevant data and updates are communicated
effectively within the organization.
○ Spokesperson: As spokespersons, managers represent the organization to external
parties such as the media, customers, and the public. They communicate the
organization’s policies, goals, and performance.
● Decisional Roles:
○ Entrepreneur: This role involves initiating and overseeing new projects, innovations,
or changes to improve the organization. Entrepreneurs are responsible for identifying
opportunities and driving growth.
 ○ Disturbance Handler: Managers acting as disturbance handlers address and resolve
unexpected issues or crises that arise. They manage conflicts and disruptions to ensure
smooth operations.
○ Resource Allocator: In this role, managers determine how resources, such as budget
and personnel, are distributed across various projects and departments.
They ensure that resources are allocated efficiently to meet organizational goals.
○ Negotiator: Managers negotiate with internal and external parties to reach agreements
or resolve disputes. This role requires skills in bargaining and finding mutually beneficial
solutions.

2. Levels of Management
Management is typically organized into three levels, each with distinct roles and responsibilities:
● Top-Level Management:
○ Roles: Includes positions such as Chief Executive Officer (CEO), board of directors,
and general managers. This level is responsible for setting the organization's overall
vision, mission, and strategic goals.
○ Focus: Concentrates on long-term objectives, strategic planning, and decision-making
that shape the future direction of the organization. They establish policies and
frameworks for the entire organization.
● Middle-Level Management:
○ Roles: Includes department heads, branch managers, and divisional managers.
Middle managers act as intermediaries between top management and lower management.
○ Focus: Responsible for implementing strategic plans developed by top management
and ensuring that the departmental goals align with the organization's overall strategy.
They manage daily operations within their departments and coordinate activities across
different sections.
● Lower-Level Management:
○ Roles: Includes supervisors, foremen, and team leaders. Lower-level managers are
directly involved in overseeing the day-to-day activities of employees.
○ Focus: Concentrates on short-term objectives, operational tasks, and directly
supervising employees. They ensure that work is performed efficiently and effectively
according to established procedures.

3. Development of Management Thought

Management thought has evolved over time, with various approaches emerging to address the
complexities of organizational management. Here’s an overview of early and modern
management approaches:
Early Management Approaches:
● Scientific Management (F.W. Taylor):
○ Concept: Developed by Frederick W. Taylor, scientific management emphasizes
improving productivity through scientific analysis of work processes. Taylor introduced
techniques such as time studies, task standardization, and differential pay based on
performance.
○ Key Elements: Focuses on optimizing work methods, enhancing efficiency, and
implementing standardized procedures to achieve higher productivity.
● Administrative Management (Henri Fayol):
○ Concept: Henri Fayol’s approach focuses on establishing general principles of
management and administrative processes. Fayol identified several key principles,
including division of work, authority and responsibility, discipline, unity of command,
and centralization.
○ Key Elements: Emphasizes the importance of management principles and practices in
organizing and coordinating activities within an organization.

● Bureaucratic Management (Max Weber):

○ Concept: Max Weber’s bureaucratic management approach advocates for a formalized
organizational structure with clear rules and hierarchical authority.
Weber’s model emphasizes the importance of a structured and impersonal approach to
management.
○ Key Elements: Includes formal rules and regulations, a clear chain of command, and
standardized procedures to ensure consistency and control.

Modern Management Approaches:

● Human Relations Approach:
○ Concept: The human relations approach emphasizes the importance of social
interactions, employee satisfaction, and motivational factors in the workplace.
Based on Elton Mayo’s Hawthorne studies, it highlights the impact of social dynamics on
productivity.
○ Key Elements: Focuses on employee welfare, motivation, and the recognition of
informal work groups and their influence on organizational performance.
● Quantitative Approach:
○ Concept: The quantitative approach uses mathematical and statistical methods to
support decision-making and problem-solving. This approach involves applying
techniques such as operations research and management science to optimize processes
and make data-driven decisions.
○ Key Elements: Involves mathematical modeling, statistical analysis, and optimization
to improve efficiency and effectiveness in organizational operations.
● Systems Approach:
○ Concept: The systems approach views the organization as a system of interrelated
parts that work together to achieve overall goals. It emphasizes the interactions and
dependencies between different components of the organization and its environment.
○ Key Elements: Focuses on understanding how different elements of the organization
interact, feedback loops, and the holistic management of the system.
● Contingency Approach:
○ Concept: The contingency approach suggests that managerial practices should be
adapted based on the specific circumstances and environment of the organization. It
argues against a one-size-fits-all approach, recognizing that different situations require
different management strategies.
○ Key Elements: Emphasizes flexibility, situational analysis, and the adaptation of
management practices to fit the context and unique challenges faced by the organization.
 Planning
Meaning and Definition of Planning
Planning is the primary function of management. It focuses on the future course of action. It
specifies the objectives to be achieved in future and selects the alternative course of action to
reach defined objectives. It also involves many activities like analyzing and decision making
about technical, personnel, financial, and other elements essential to implement predetermined
course of action. Thus, planning is mental and paper activities which look ahead for drawing the
future course of action.

―Planning is that function of manner in which he decides in advance what he will do. It is a
decision making process of a special kind, its essence is futurity.‖ Hayness and Massie
―Planning is deciding in advance what to do, how to do, when to do and who is to do it.
Planning bridges a gap between from where we are to where we want to go.
Procedure of Planning
For systematic approach to planning, it is essential to complete some procedures or steps.
The major steps of planning are as follows:
Procedure of Planning
1. Analyze Opportunities: Generally, this is not a step of planning. It is known as pre-step of
planning. It is essential to make a successful plan. The management has to analyze strengths;
weakness, opportunities and threats (SWOT) of changing environment of the business.
2. Setting objectives: This is the first and real starting point of planning. The objectives must be
specific, clear and practical. They should be time bound and expressed in numerical terms. They
should not be idealistic or over ambitious. A minor mistake in setting objectives might affect in
implementation of plan.
3. Determination of premises: After setting objectives, another step of planning is to determine
premises. Premises are the assumptions about the future
(a) Tangible and intangible: Tangible premises involve capital investment, unit of production,
units sold, cost per unit, time available etc.
4. Determination of alternatives: The next step, after establishment of objective and premises
of the planning is to discover the various alternative courses of action for the achievement of
organizational objectives.
5 Evaluation of alternatives: This is another step after determination of alternative courses of
action to evaluate them from their expected cost and benefits.
6 Selecting a course of action: Next step of the planning after evaluation of alternative courses
of action is to select a best course of action.
7 Formulation of derivative plans: This is the next logical step after the selection of a course
of action. After the selection of course of action, it is essential to formulate action plans for each
step of work and to all departments of the organization. These action plans involve formulation
of policies, rules, schedule and budget to complete defined objectives.
8 Implantation of plans: This is one of the significant steps of planning. Without this step, other
this procedure of plan will remain as paper work.
9 Reviewing the planning process: The planning procedure is continuous function up to the
attainment of defined objectives.
Types of planning
The following are the major types of plan prepared in the organization: i. Corporate or strategic
plan
ii Tactical or Division plan
iii Operational or Unit plan
i. Corporate or Strategic Plan: This plan is prepared by the top level management by taking the
long term objectives of the organization into consideration. It clearly defines the objectives of the
organization and strategies to achive the defined objective. Here goal focuses on the result that
an organization wants to achieve. It is the end point of planning.
ii Tactical or Division Plan: Tactical plan is prepared by the middle level management It is
consistent with corporate plan. In simple words, it is the sub-division of corporate plan to
implement in practical field. Here, divisional managers identify the priorities of the works. They
focus to allocate work and resources on the basis of programs.
iii Operational or Unit Plan: This plan is prepared by the lower level management. It is
consistent with tactical plant. In simple sense, it is the action plan of each and every activity of
the department.
Advantages (Benefits/Importance) of Planning
Planning is the foundation of the organization. It is the primary function of management which
clearly defines the organizational objectives and line of action. The quality of planning is
important for successful operation of the organization. The following points clarify the
importance of planning in the organization:
Advantages of Planning
Goal Focus
Minimize Uncertainty
Improve efficiency
Facilitates to Control
Innovation and Creativity
Better Coordination
Ensures Commitment
Aid to Business Success
Brings Systematization
Strategy and Business policy
Strategy is meant to fill in the need of organizations for a sense of dynamic direction, focus and
cohesiveness .Objectives alone do not fill in the need of organization. Strategy provides an
integrated framework for the top management to search for evaluation of opportunities, to
perceive and meet threats and crises to make full use of resources to make major decision.
Strategy may be defined as long range blueprint of an organization’s desired image, direction
and destination what it wants to be, what it wants to do and where it wants to go.
The concept of strategy is ancient. The word itself comes from the Greek Strategeia, which
means the art or science of being general. The connection that managers today make between
business and strategy is a relatively recent one. Only since World War II has emerged that
strategic planning and acting on those plans constitute a separate management process- the
process we call Strategic management.
Strategic management provides a disciplined way for managers to make sense of the
environment in which their organization operates, and then to act.
Stages in formulation of strategy
A number of framework have been developed for identification the major strategic alternatives
that organization should consider when choosing their business – level strategies. The several
stages involved in formulating a strategy .
1. Determination of corporation vision, mission, and purpose
2. External environmental appraisal
3. Internal environmental appraisal
4. Gap analysis
5. Strategic search
6. SWOT analysis
Types of Strategies
1. Stability strategy
2. Growth strategy
3. Diversification strategy
4. Acquisition strategy
5. Retreat strategy
6. Combination strategies
The Importance of Planning
The importance of the planning function should be clear to you. We can outline the importance
of planning function as follows: Provides Direction: Planning provides a clear sense of
direction to the activities of the organization and to the job behavior of managers and others. It
strengthens their confidence in understanding where the organization is heading and what for,
how best to make the organization move along the chosen path, and when should they take what
measures to achieve the goals of the organization.
Provides opportunity to analyze alternative courses of action: Another source of importance
of planning is that it permits managers to examine and analyze alternative course of action with a
better understanding of their likely consequences. If managers have an enhanced awareness of
the possible future effects of alternative courses of action, for making a decision or for taking
any action, they will be able to exercise judgment and proceed cautiously to choose the most
feasible and favorable course of action.
Reduces uncertainties: Planning forces managers to shake off their inertia and insular outlook;
it induces them to look beyond those noses, beyond today and tomorrow, and beyond immediate
concerns. It encourages them to probe and cut through complexities and uncertainties of the
environment and to gain control over the elements of change.
Minimizes impulsive and arbitrary decisions: Planning tends to minimize the incidence of
impulsive and arbitrary decisions and ad hoc actions; it obviates exclusive dependence on the
mercies of luck and chance elements; it reduces the probability of major errors and failures in
managerial actions. It injects a measure of discipline in managerial thinking and organizational
action. It improves the capability of the organization to assume calculated risks. It increases the
freedom and flexibility of managers within well-defined limits.
King-pin function: As stated earlier, planning is a prime managerial function which provides
the basis for the other managerial functions. The organizational structure of task and authority
roles is built around organizational plans. The functions of motivation, supervision, leadership
and communication are addressed to implementation of plans and achievement of organizational
objectives. Managerial control is meaningless without managerial planning. Thus, planning is the
king-pin function around which other functions are designed.
Resource Allocation: Planning is means of judicious allocation of strategic and scarce resources
of the organization in the best possible manner for achieving strategic goals of the organization.
The strategic resources include funds, highly competent executives, technological talent, good
contacts with government, exclusive dealer network and so on. If the organization enjoys a
distinct advantage in possession of such resources, a careful planning is essential to allocate them
into those lines which would strengthen the overall competitive position of the organization.
Resource use efficiency: For an ongoing organization, planning contributes towards a more
efficient functioning of the various work units. There is better utilization of the organization's
existing assets, resources and capabilities. It prompts managers to close gaps, to plug loopholes,
to rectify deficiencies, to reduce wastage and leakages of funds, materials, human efforts and
skills so as to bring about an overall improvement in resource use efficiency.
Adaptive responses: Planning tends to improve the ability of the organization to effectively
adapt and adjust its activities and directions in response to the changes taking place in the
external environment. An adaptive behavior on the part of the organization is essential for its
survival as an independent entity. For a business organization, for example, adaptive behavior is
critical in technology, markets, products and so on.
Anticipative action: While adaptation is a behavior in reaction and response to some changes in
the outside world, it is not enough in some situations. In recognition of this fact, planning
stimulates management to act, to take hold initiatives, to anticipate crises and threats and to ward
them off, to perceive and seize opportunities ahead of other competitions, and to gain a
competitive lead over others. For the purpose, some enterprises establish environmental scanning
mechanism as part of their planning systems. Thereby such enterprises are able to direct and
control change, instead of being directed and controlled by the pervasive external forces of
change.
Integration: Planning is an important process to bring about effective integration of the diverse
decisions and activities of the managers not only at a point of time but also over a period of time.
It is by reference to the framework provided by planning that managers make major decisions on
organizational activities, in an internally consistent manner.
Nature and Characteristics of Planning management
Managerial function has some unique characteristics of its own which separate it from other
functions. They are:
Primacy of Planning: Planning is the first and foremost activity of Managerial function.
Planning a Process: Planning is a process of management which starts with identification of
mission and goals of the organization and ends with making arrangements for fulfilling the goal.
Ubiquity/pervasiveness of Planning: Planning is an function which exists in all levels of
managerial hierarchy.
Future orientation: Planning are always future oriented. It is a process which look ahead or
think ahead and making provision to tackle future event.
Information base: Information is the basis of planning. Without information planning is not
possible.
Rationality: Planning is done based on reasons rather than emotions.
Formal and informal Nature: Normally planning is of formal and informal nature.
Intellectual Process: Planning is a process which needs the ability to think in a logical way and
understanding things.
Pragmatic, action-orientation: Even if it is an intellectual process, it needs practical, flexible
and sensible way of action rather than a fixed ideas or theories.
Decision making: Planning involves decision making and problem solving.
Dynamism: Planning is a dynamic process and it is based on the external and internal changes of
environment
Levels and of planning: On the basis of scope there are two levels:
1. Corporate Planning covering the entire organization
2. Sub-corporate or functional Planning – within the various divisions or units. On the basis of
significance we may divide planning into
1. Strategic planning
2. Tactical or operational planning.
On the basis of time we can divide planning into:
1. Long term planning covering periods of more than one year.
2. Short term planning covering a period of one year or less.
Even if we divide planning into different levels to analyze, it must be coordinated and balanced
to support one another and attain the objectives of the organization.
Types of plans: Plans are categorized into two groups:
1. Single use pans – those which are designed to meet specific, non-repetitive and unique
situations
2. Standing Plans – those which are fairly stable and are meant to handle a wide range of
repetitive situations over a period of time.
5 essential objectives of economic planning in India
Planning without an objective is like driving without any destination. There are generally two
sets of objectives for planning, namely the short-term objectives and the long-term objectives.
While the short-term objectives vary from plan to plan, depending on the immediate problems
faced by the economy, the process of planning is inspired by certain long term objectives. In case
of our Five
Year plans, the long-term objectives are: (i) A high rate of growth with a view to improvement in
standard of living.(ii) Economic self-reliance;
(iii) Social justice and (iv) Modernization of the economy (v) Economic stability
Planning Premises

What Is a Planning Hierarchy?

Definition
A planning hierarchy represents the organizational levels and units in your company for which
you want to plan. A planning hierarchy is a combination of characteristic values based on the
characteristics of one information structure.
Planning hierarchies provide a framework for your planning activities in consistent planning and
level-by-level planning. With these planning methods, a planning hierarchy must exist for the
information structure before you can plan its key figures. You can create only one planning
hierarchy for an information structure. However, a hierarchy can have as many different
branches as you like. See also Planning Hierarchies Containing Product Groups.
You can create one or more planning hierarchies automatically when you install Release 3.0,
with the Master Data Generator.
You can also create a planning hierarchy manually (see Creating a Planning Hierarchy). It
consists of one or more planning levels to which you assign characteristic values.
You maintain planning hierarchies in much the same way as you maintain product groups, on a
level-by-level basis, and define the aggregation factor and the proportional factor of each
characteristic value just as you define them for the members of a product group. For more
information, see Planning Hierarchy Maintenance Functions.
Example of a Planning Hierarchy

You might extend this planning hierarchy to include further branches, such as branches to
represent the organizational structure of the company in sales organizations South, East, and
West.
Expected Questions:
1. What is planning? Explain the steps involved in planning. And give the importance and
purpose of planning process june10, june11, jan09
2. Briefly explain the types of planning. June10, june11, july09
3. Explain the process and steps involved in decision making and planning june10,
june11, july09, model paper, dec10, jan09
4. Explain hierarchy of planning june10, dec10,
5. Differentiate between strategic planning and tactical planning june10
6. What are planning premises? Explain the classification of planning premises. Jan10
7. What are the different types of decision? Explain briefly july09
8. Discuss the limitations and importance of planning july09