Planning Keywords and Brief Notes

Meaning of Planning

  1. A process
  2. Deciding in advance what to do and how to do.
  3. Basic managerial function of management.
  4. Choice from alternative courses of action.
  5. Bridges the gap between where we are and where we want to go.
  6. Concerned with both ends and means.

 

Features of Planning

  1. Focuses on achieving objectives
  2. Primary function of management
  3. Pervasive
  4. Continuous
  5. Futuristic
  6. Involves decision making
  7. Mental exercise.

 

Importance of Planning

  1. Planning provides directions
  2. Reduces risks of uncertainty
  3. Reduces overlapping and wasteful activities
  4. Promotes innovative ideas
  5. Facilitates decision making
  6. Establishes standards for controlling.

 

Planning Process

  1. Setting objectives:

for the entire organization/each department/unit.

  1. Developing premises:

assumptions about what might happen in future.

  1. Identifying alternative courses of action:
  2. Evaluating alternative courses:

to weigh the pros and cons of each alternative.

  1. Selecting an alternative:

decision making of alternative to be adopted and implemented.

  1. Implement the plan:

putting the plan into action.

  1. Follow-up action: Monitoring the plans to ensure that objectives are achieved.

 

Limitations of Planning

  1. Planning leads to rigidity
  2. Reduces creativity
  3. involves huge costs
  4. Time consuming process
  5. Does not work in a dynamic environment
  6. Does not guarantee success

 

Types of plans as part of Operational Planning:

Single Use Plans

  1. Developed for single (one time) event or Project.
  2. Not likely to be repeated in future.
  3. Include programmes, budgets, projects.

Standing Plans

  1. For activities that occur regularly.
  2. Used repeatedly.
  3. Include Policies, Procedures, Methods, Rules.

Objectives and strategies are not part of Single Use or Standing Plans but part of strategic Planning.

Planning Keywords and Brief Notes

Based on what the plans seek to achieve, types of plans are:                                                 

Objective

  1. End results expected.
  2. Set by Top Management.
  3. Guide for overall planning.
  4. SMART; specific, measurable, attainable, relevant and time-bound.
  5. Neither single-use nor standing plan.

Strategy

  1. Determining long term objectives.
  2. Adopting particular course of action.
  3. Allocating resources necessary to achieve objectives.
  4. Broad Contours of business.
  5. Comprehensive plan.
  6. Future decisions defining orgranisations’ direction and scope in the long run.
  7. Neither single-use nor standing plan.

Policy

  1. General statements
  2. Guides to managerial action.
  3. Basis for interpreting and implementing strategy.
  4. Broad parameters of manager’s functioning.
  5. Examples: Recruitment policy, pricing policy, purchase policy, credit policy.

Procedure

  1. Routine and specified steps.
  2. Detail of exact manner to perform task.
  3. Chronological order.
  4. Made for insiders to follow.
  5. To attain pre-determined objectives.
  6. Within a broad policy framework.

Method

  1. Prescribed ways or manner.
  2. Only a one step of a procedure.
  3. Examples; Selection method, Training method, Orientation method.

Rule

  1. Specific statements regarding what is to be/not to be done.
  2. No flexibility.
  3. Simplest of plan.
  4. No discretion unless policy decision is taken.

Programme

  1. Detailed statements
  2. Outlines objectives, policies, procedures, rules, budget and human and physical resources.
  3. The minutest details are worked out within the broad policy framework

Budget

  1. Quantitative Statement of expected results.
  2. Examples; cash budget, sales budget, production budget.

Check your understanding

Organising Keywords and Brief Notes