Unit 5: Planning
Anjali Sharma
UNIT -5
PLANNING –
■ Meanings, features, importance
■ Planning process
■ Limitations of planning
■ Strategy-Corporate level, Business level,
Functional level
■ Strategic Planning Process
PLANNING
■ First managerial function.
■ Choosing the best out of different
alternatives.
■ Thinking in advance.
■ Predetermined course of action to
achieve a specified goal.
WHAT
WHEN
PLANNING WHO
HOW
What is to
be done?
Who will How it is to
do it? PLANNING be done?
When it is to
be done?
PLANNING
■ According to Koontz and O’Donnell-
“Planning is deciding in advance what to
do, how to do it, when to do it, & who
is to do it. Planning bridges the gap
from where we are to where we want
to go. It makes possible for things to
occur which would not otherwise
happen.
PLANNING
Desirable position
GAP Filled by
Planning
Present position
PLANNING
■ According to Fayol-
“Planning is chalking out a plan of action,
i.e the result envisaged, the line of
action to be followed, the stages to go
through and methods to use.
PLANNING
GOAL PRIMARY
ORIENTE FUNCTIO
D N FLEXIBLE
ACTIVIT
Y
FORWAR
D
LOOKING
FEATURES INVOLVE
S
OF DECISIO
PLANNING N
PERVASIV MAKING
ENESS
EFFICIEN CONTIN
INTELLEC CY UOUS
TUAL OF PROCESS
PROCESS OPERATIO
NS
IMPORTANCE OF PLANNING
■ Reduces uncertainty.
■ Optimum utilisation of resources.
■ Facilitates control.
■ Encourages innovation & creativity.
■ Gives competitive edge to enterprise.
■ Ensures better co-ordination & avoids
duplication of efforts.
■ Development of managers.
THE PROCESS OF PLANNING
COLLECTING &
IDENTIFY NEED FOR
ANALYSING
PLANNING
INFORMATION
FINDING
ALTERNATIVE
COURSES OF ACTION
MEASURING AND
EVALUATION OF
CONTROLLING
ALTERNATIVES
PROGRESS
FORMULATION OF SELECTING A COURSE
DERIVATIVE PLANS OF ACTION
LIMITATIONS OF PLANNING
■ Lack of accuracy.
■ Costly process.
■ Adverse effect on initiative.
■ Delay in actions.
■ Leads to rigidity.
■ Psychological barriers.
■ Limited practical value.(Fails in dynamic env.)
■ Human elements.
COMPREHENSIVE PLANNING
■ Strategic Planning ■ Operational Planning
■ Long run plans ■ Short run plans
■ Taken care by top mgnt ■ Taken care by lower
■ Necessary for the survival level manager
and growth
■ Implementation of
(would be studied in detail)
decisions taken at
strategic level
Strategy: Concept
Strategy is concerned with the planned
actions that an organization undertakes at
each level. A strategy is an integrated set
of decisions which specify the ‘where’ and
‘how’ to compete.
It is very important to understand how and
at what levels the strategies operate.
Strategy
■ Meaning : strategy gives direction to the
organizational plans
REFERS TO
■ A course of action
■ Selection of the course of action out of the
available course in order to achieve the long
run goals
■ As a means to an end
Stoner and Wankel
■ “A strategy creates a unified direction
for the organization in terms of its many
objectives, and it guides the deployment
of the resources to move the
organization towards those objectives”
Definition
■ According to Chandler, “Strategy
is the determination of the basic long
term goals and objectives of an
enterprise and the adoption of courses
of action and the allocation of resources
necessary to carry out these goals and
objectives”.
Levels of strategies
levels
Corporate level
Business Level
Functional Level
Strategies at different levels.
(i) Corporate Level Strategy- At this level basic
questions like- What kind of business should the
company be engaged in and should the resources
be allocated among those businesses. At this level
a strategy is made for the corporate unit as a
whole. (different product lines) Long term
(ii) Business Level Strategy- It is formulated by a
business manager to oversee the interest in such
way as to accomplish its long term [Link] term
like 1 year
(iii) Functional Level Strategy- These strategies are
developed for the functional areas of the
organisation. E.g. Finance, Personnel, R&D etc.
Very short term like 15-30 days
Levels of Strategy Making
(I) Corporate Level
Board Of Directors
Chief Executive
Officer
Vice-President Vice-President Vice-President
Finance Marketing Human Resources
(II) Business Level
Corporate
level
Businesslevel
Business level
Product Product
Product
Product
Division B Division C C
DivisionAA
Division
(III) Functional Level
Business
Level
Functional
Level Production Marketing Personnel
Finance Manager Manager Manager
Manager
Strategic Planning Process
Environmental
Determination Of Scanning -
Mission Purpose Opportunities &
Threats
Organizational Analysis
Strengths and
Weakness
Execution Of
Strategic Plan Developing Strategic
Alternatives
Formulation Of
Evaluation Of Strategic
Strategy Or
Alternatives
Strategic Plan
Doubts???