2. DEFINITION
Planning is a process of thinking about activities required to be achieved
in order to accomplish the desired goal. It is the first and the most
important function of management which involves deciding beforehand,
what is to done , when is it to be done, how it is to be done and who is
going to do it.
According to Koontz and O’Donnell,
“ Planning is an intellectual process, a conscious
determination of course of action, basing of the decision on purpose,
facts and considered estimates.”
3. CHARACTERISTICS
• Planning is a Pre-Action stage process
• Planning is a continuous process
• Planning is an intellectual process, which consists of careful thinking,
analysis of facts and considered estimates of the past and future event.
• Planning is a dynamic process, the plan has to be flexible in nature.
• Planning is a integrated process, it is not an isolated activity, plan is a
integration and participation of all the concern parties.
4. Effective Planning
• Planning the course of your business is one of the most effective, low-
cost ways to improve your company’s performance and bottom line.
The effective planning defines the correct actions to achieve the
organisational goals. It helps in efficient utilization of available
resources. The realistic planning helps in achieving the organisational
goals in most competitive way. Hence go on and plan to achieve the
goals you have set.
5. Importance of Planning
To manage the
objectives
Convert
uncertainty into
certainty
Help in co-
ordination
Economy in
operation
Avoiding business
failure
Effective control
Effective
utilization of
resources
Tackling increasing
complexities of
business
6. Features of Planning
• Specific/ goal oriented
• Adaptable
• Flexible
• Economic
• Continuous
• Integrated
• Futuristic
• Pragmatic/ practical
• Definite/ controllable
• Acceptable by all
• Motivate the employees
7. Process of Planning
• Step 1 – Setting of objectives.
• Step 2 – Developing the planning premises.
• Step 3 – Identifying the alternative plan.
• Step 4 – Selecting the best plan.
• Step 5 – Implementation of the plan.
• Step 6 – Follow-up action and review of the plan.
8. Type of Planning
• Formal Planning
• Informal Planning
• Proactive Planning
• Reactive Planning
• Operational Planning
• Strategic Planning
• Corporate Planning
• Functional Planning
( the types of planning can overlap each other in one way or other)
9. • Formal Planning – Formal planning is a systematic process of
analysing various factors and the planners have a
formal authority. It is written, approved and
communicated to all the concerned.
• Informal Planning – Informal planning is NO PLANNING. It is a
thought, emotion, a sporadic episode without any
formal process of plan. It is neither written nor
processed.
10. • Proactive Planning – Proactive Planning plays a dynamic role. This
type of planning can influence the environment and
make the environment work in our favour.
• Reactive Planning – Reactive planning is a passive process. In this
process the plan is developed by the command of
the environment. In this planning the future is
uncertain.
11. • Operational Planning – Operational planning is a highly detailed
plan. It is made on day to day, weekly or monthly
basis. These plans are for a shorter span of time.
Operational plan outlines the daily task required for
running the business.
• Strategic Planning – these are the long term plans , that has been
made succeeding five to ten years. Forecasting is
required for strategic planning. In this type of
planning risk is higher as the future never remains
the same , it is uncertain.
12. • Corporate Planning – Corporate Planning may be defined as the
process of deciding long term goals and objectives
within the ambit of organisation’s strength and
weaknesses in the existing and prospective
environmental setting to ensure their achievement.
• Functional Planning - The planning that is made to ensure smooth
working of the organisation taking into account the
needs of each and every department. The purpose of
functional planning is to promote standardised
management practices for corporate functions in the
department’s decentralised corporate management
structure.
13. What is a Plan?
A plan is typically any diagram or list of steps with details of timing
and resources, used to achieve an objective to do something. It is
commonly understood as a temporal set of intended actions through
which one expects to achieve a goal.
14. Types of Planning
PLAN
Standing Plans
Policies Procedures Methods Rules
Single use plan
Programmes Projects Budget Strategies
15. Standing Plans - Policies
• Policies are standing plans , which once created it
become a basic statement that serve as a guide for
administrative action.
• These are the general and guiding statements.
16. A good policy has to be -
Easy to understand
Consistent / stable
Realistic
Acceptable / relevant- equity principle should be
respected.
17. Difficulties in policy formulation &
implementation
• Conflicts - clash of interest, conflicts in views.
• Accurate expression – interpretation of policy, the expression cannot
be misunderstood.
• Lack of adequate time and sufficient resources
18. Standing plan - Procedure
Procedure are the routine and repetitive activities laid down in a
chronological sequence through various course of action.
A procedure is an established method of accomplishing a task, usually
with steps that are performed in a prescribed order.
Guides, trainings, and tutorials are typical methods of communicating
processes to the employees of an organization, so they can implement
the procedures to achieve the company’s goals.
19. Standing plan - Method
• Method is part of procedure and it tells , how the procedure should be
performed. It is manual mechanical or a technique so that should be
employed to make the procedure effective.
• Method can be standard method.
Standard methods that can be applied successfully are essential
methods carefully defined and performed in a specific way.
These methods are very important to avoid conflicts and confusion.
20. Standing Plan – Rules
• Rules is one of a set of explicit or understood regulations or
principles governing conduct or procedure within a particular
area of activity.
• Rules gives the guidelines for specific actions.
• It consists of DO’s and DON’T of the action.
21. Single use plan - Programmes
• Programmes are different plans for implementing a complete and
orderly course of action.
• It consists of policy, procedure, rules and budget.
• It consist of the piece meal plans and then these plans can become
master plan
23. Steps of Programming
• Step 1 – Stepwise division of work.
• Step 2 – Establishment of relationship and sequence of work.
• Step 3 – Fixing responsibility.
• Step 4 – Arranging resources.
• Step 5 – Scheduling (fixing a starting point and finish the
programme).
24. Single use plan - Project
• Project is a complex cluster of related activities with the distinct goal
to be achieved within the definite period of time.
• Programmes can be divided in different projects-
• These projects have a clear cut objective.
• These project have distinct resources .
• These projects have definite time limit.
25. Single use plan - Budget
• Budget is a single use plan, for a specific period , expressed in
numerical and statistical terms. It is based on the past experiences,
present facts and future anticipation.
• It is prepared within the broad objective policy and resources of the
organisation.
• Different departments prepared different budgets and it can be
integrated in a single budget.
• It a instrument of planning future activities.
• It is a quantitative programme designed primarily to allocate the
resources of the organisation.
26. Single use plan - Strategies
• The word ‘strategy’ has long been used in the content of military
action plans. It was used to state the grand plans made in the light of
what it is believed an adversely might or might not do. Managers now
use strategies in the broader areas of business operations.
• Strategies is a unified comprehensive and integrated plan which
creates advantages for the firm to meet the challenges of the
environment.
• Strategies do not attempt to outline the programmes for achieving
objectives but they furnish a framework for guiding thinking and
action..
27. Planning Premises
• Planning premises are the basic assumption and anticipation of future
events and trends. They include assumptions or forecasts of the future
and known conditions that will affect the course of plans such as
prevailing policies and existing company plans that controls the basic
nature of supporting plans.
• So planning premises provide a framework for planning and action in
the midst of uncertainties in the business environment.
28. • Planning premises assumptions are based on the following –
Internal and External Premises
Tangible and Intangible Premises
Controllable and uncontrollable Premises
• Internal and external premises
Internal premises are those which exist within the business enterprise.
This may include men, material, money and methods.
External premises centre round the markets and derived from the
external environment surrounding the business. Examples: Product
market, money market, population growth, etc.
29. Tangible and Intangible Premises
Tangible premises are those which can be measured quantitatively. They
may be quantified in terms of money, time and units of production.
Intangible premises are those which cannot be measured quantitatively.
Examples are: Reputation of the business, Public relations, etc.
Controllable and Uncontrollable Premises
There are certain factors which are well within the control of the
management to a great extent. Factors like materials, money and
machines are areas where management has maximum control over their
future commitments.
Non-controllable premises are entirety beyond the scope of business like
government policy, international trade agreements, wars, natural
calamities new discoveries and inventions etc.
30. Forecasting
• Forecasting is a formal process of predicting future events which may
significantly affect the functioning of the enterprise.
• It includes : (I) the examination of the past events – tangible,
intangible, controllable, uncontrollable factors.
(II) futuristic events.
Forecasting should be an integral part of the decision-making activities of
management, as it can play an important role in many areas of a company.
Modern organisations require short-term, medium-term and long-term
forecasts, depending on the specific application.
32. • Deterministic techniques : This technique is based on the belief that there
is a complete, or at least very close, causal relation between the present and
the future. In other words, this technique assumes that present conditions or
actions determine the future outcome very closely. It would therefore pay to
analyse the present very carefully and to try to calculate the future
consequences.
• Symptomatic techniques : This technique is based on the belief that there
are signs in the present that indicate future development of the subject in
question. The signs do not cause the development but are relevant early
symptoms, especially for more or less dramatic future changes. This means
that one should be aware of symptomatic, perhaps small changes that
indicate turning points, often analysing the development of differences
rather than that of total volumes.
33. • Systematic techniques : This techniques is based on the belief that the
courses of development follow rather strict laws or principles, such as
socio-economic theories, only that the real world is so complicated, that
until we have found out the underlying regularities, many changes seem to
be purely accidental. It is of two types –
• Intuitive techniques
• Econometric techniques
An interesting point is that our strategy could be both deterministic and systematic
at the same time, in so far as we could strongly believe in explicit causality
according to the deterministic strategy, but believe that the explaining variables
themselves develop according to complicated interdependencies of a systematic
strategy.
34. Why forecasting is important ?
• It is basis of planning
• It helps in avoiding risk or loss
• It helps in decision making
• It helps in utilisation of resources and opportunities
• Helps in co-ordination
• Helps in control
35. Problem and Issues faced during
forecasting
• Data has to be correct
• It is costly process
• It is time consuming as it requires research, which takes time.
• It is uncertain in nature
• Business environment is dynamic in nature.
