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What is Planning
Planning means setting objective and targets and formulating an action plan to achieve them. It concerned with both ends and means, i.e., what is to be done and
how it is to be done.
Planning is considered to be the basic or primary function of management because planning precedes all other functions of management and all other function are
performed within the framework of planning.
Steps In Planning Process
Setting Organisational
Objectives
Developing Planning Premises
Identifying Alternative Course
Of Action
Evaluating Alternative
Courses Of Action And Selecting The Best Alternative
Formulating Derivative Plans
Implementing The Plan And Follow-Up
Action
•The first and foremost step is setting organisational objective, which specify what the organisation wants to achieve.
Setting Organisational
Objectives
•Developing Planning Premises - Planning is concerned with the future, which is uncertain
Developing Planning Premises
•- Once objective are set and assumption are made, then the next step is to identify all possible alternative courses of action.
Identifying Alternative Course
Of Action
•The positive and negative aspect of each alternative need to be evaluated, i.e., its feasibility and consequences.
Evaluating Alternative Courses Of Action And Selecting The Best Alternative
•Derivative plans are formulated to support the main plan.
Formulating Derivative
Plans
•This step is concerned with putting the plan into action.
Implementing The Plan And
Follow-Up Action
Features Of Planning
Planning Focuses On Achieving Objectives
Planning Is Futuristic
Planning Is Pervasive
Planning Involves Choice And Decision-Making
Planning Is A Continuous Process
Planning Is A Mental Exercise
Planning Focuses On Achieving Objectives
as Specific goals are set out in the plans along with activities undertaken to
achieve them.
Planning Is Futuristic It is based on forecasting the future event and conditions.
Planning Is Pervasive It is not an exclusive function of top management .
Planning Involves Choice And Decision-Making
as it involves choosing the best alternative courses of
action.
Planning Is A Continuous Process.
Plans are prepared for a specific time period, e.g., a
month or a quarter or a year.
Planning Is A Mental Exercise as it requires application of mind and sound judgment.
Importance Of Planning
Planning Provides Directions
Planning Reduces The Risk Of Uncertainty
Planning Facilates
Decision- Making
Planning Reduce Overlapping And
Wasteful Activities
Planning Promotes
Innovative ideas
Planning Establishes
Standards For Controlling
Planning Provides Directions
By stating in advance how work is to be
done, planning provides
direction to action.
Planning Reduces The
Risk Of Uncertainty
Business enterprises
operate in an uncertain
environment.
Planning Facilates Decision- Making
Planning helps the manager to look into future and
make a choice from amongst
various alternative courses of
action.
Planning Reduce Overlapping And
Wasteful Activities
Since planning ensure the clarity in
thought and action, work is
carried on smoothly without
interruption.
Planning Promotes
Innovative ideas
Planning is thinking in advance
what to do and hoe to
do it.
Planning Establishes
Standards For Controlling
Planning provides the
standards against
which actual performance is measured.
Limitation Of Planning
Internal • Planning Leads TO Rigidity• Planning Reduces
Creativity• Planning Is A Time-
Consuming Process• Planning Involves Huge
Costs• Planning Does Not
Guarantee Success• Planning May Not Work In
A dynamic Environment
External• Natural Calamities• Technological
Changes• Changes In
Government • Strategies Of
Competitors• Changes In Fashion
Internal Limitation
Planning Leads To Rigidity Once a well-defined plan is drawn, managers may not be in a position to change it.
Planning Reduces Creativity Planning is done by top management .
Planning Is A Time-Consuming Process Planning requires collection of information, its analysis and interpretation.
Planning Involves Huge Costs When plans are drawn up, huge costs are involved in the formulation of plans, e.g., expenses on board’s meeting,
discussion with professional experts and preliminary investigations to find out the feasibility of the plan.
Planning Does Not Guarantee Success
The success of an enterprise is possible only when plans are properly drawn up and
implemented.
Planning May Not Work In A dynamic Environment
The business environment is dynamic. The organisation has to constantly adapt itself to
the changes in business Environment.
External
Natural Calamitiessuch as flood, earthquake,
famine, etc. are beyond the control of managers and cause
failure of planning
Technological Changes
reduce effectiveness of planning because when new technology is introduced, an organisation has to face several problems such as higher cost of production due to
obsolete technology, poor, competitive position in the market and higher capital expenditure to replace the
obsolete technology.
Changes In Governmentpolicies such as industrial policy, taxation
policy, bank rate of interest etc. upset forecasts and plans.
Strategies Of Competitors e.g., when a competitor introduces improved model of existing product, demand and sales
of a firm’s product may decline.
Changes In Fashion tastes and preferences of consumers may affect the sales forecast of a firm.
A plan is a specific action proposed to help the organisation achieve its objectives. It is a document that outline how goals are going to be meet. The importance of developing plans is evidence from the fact that there may than one means of reaching a particular goals.
Types Of Plans
Objectives
Objectives are defined as ends which the management seeks to achieve
within a given time period, e.g., increasing sales by 10% in the next
quarter.
PolicyPolicy is general which bring
uniformity in decision-making for achievement of predetermined
objectives.
Strategy Strategy is a comprehensive plans for achieving an organisation's .
ProcedureProcedure consists of sequential to
carry of activities within policy framework.
Rule Rule is a specific statement that specifies what is to be done or not to be done.
MethodMethod is the standardised way or prescribed manner in
which a take has to be preformed considering the objectives.
Budget Budget is a plan which states expected results of a given future period in numerical terms.
ProgrammeProgramme is a detailed statement about a project which outlines the objectives, policies, procedures, rules, tasks, resources required to implement any course of action.
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