Planniing My Nts

8/6/2019 Planniing My Nts

1/38

PLANNING


2/38


3/38

PLANS

What

What

When

When

Who

Who

Where

Where

How

How

How much

How much

identifies the specific goals to be accomplished

identifies the specific goals to be accomplished

answers a question of timing

answers a question of timing

identifies specific people who will perform tasks essential to

the plan

identifies specific people who will perform tasks essential to

the plan

concerns the place's) where the plan will be executed

concerns the place's) where the plan will be executed

involves the specific actions to be taken to reach the goals

involves the specific actions to be taken to reach the goals

is concerned with the expenditure of resources needed to

reach the goals

is concerned with the expenditure of resources needed to

reach the goals


4/38

Introduction: All organizations operate in an environment of uncertainty; to be successful an

organization must anticipate changes and make plans to adapt itself to the environment. In

designing an environment for the effective performance of individuals working together in groups,

managers most essential task is to see that everyone understand the groups purposes and

objectives and its methods of attaining them. If the group is to be effective people must know what

they are expected to accomplish. With out planning an organization is like a boat without a rudder.

One of the most important aspects of developing strong ways of winning is the planning.


5/38

Planning is so important now days because it contributes heavily to success and gives you

some

control over the future. By planning you set aside your daily tasks and deadlines so you

can

enlarge your mental focus and see the bigger picture. Planning concentrates on setting and

achieving objectives of the organsition. Planning is the primary function to be performed

in the

process of management. It governs survival, growth and prosperity of any organization ina

competitive and ever changing environment. Planning is concerned with the futureimpact of

today's decisions.


6/38

Planning is bridging the gap between where we are and where we want to be in

the future. In other words planning is looking ahead, relating todays events with

tomorrows possibilities. It is the process of deciding in advance what to do, howto

do it, when to do it, and who does what. Proper planning minimizes risk and

ensures that resources efficiently and effectively utilized. Planning concentrates

on

setting and achieving objectives of an organization. Planning is the first

management

function to be informed in the process of management. It governs survival, growth

and

prosperity of any organization in a competitive and ever changing environment


7/38

STEMING THE FOUR FUNCTIONS

The organizing, staffing, leading and controlling functions stem from the planning

function. The manager is ready to organize and staff only after goals and plans to reach

the goals are in place. Likewise, the leading function, influencing the behavior of people

in the organization, depends on the goals to be achieved. Finally, in the controlling

function, the determination of whether or not goals are being accomplished and

standards met is based on the planning function. The planning function provides the

goals and standards that drive the controlling function.


8/38

Whatis Planningandwhyyouneedtoplan?

Planning is preparing a sequence of action steps to achieve some specific

goal. If you do it effectively, you can reduce much the necessary time and effort

of achieving the goal.

A plan is like a map. When following a plan, you can always see how much you

have progressed towards your project goal and how far you are from your

destination. Knowing where you are is essential for making good decisions on

where to go or what to do next.

Planning is also crucial for meeting your needs during each action step with your time,

money, or other resources. With careful planning you often can see if at some point you

are likely to face a problem. It is much easier to adjust your plan to avoid or smoothen a

coming crisis, rather than to deal with the crisis when it comes unexpected.


9/38

ReasonsofPlanning

To Identify the sources of uncertainty

To improve the efficiency of the Operation

To obtain the better understanding of the Objectives and the means to achieve

them.

To communicate with others (the customers, users)

To provide a basis for monitoring and controlling work


10/38

WhyPlanningis Important.

Planning is leveraged time. 20 minutes of planning per day can improve your productivity immensely.

Affording you time to plan will pay off in the future. You'll make sure that you are staying on track with your

goals and you can ensure that you become more task oriented. By simply taking 10-20 minutes to go

through what your objectives or outcomes are, you will be more likely to achieve them and not getsidetracked which is quite easy to do especially when working online.

Planning provides the framework for informed decision making.

By planning what you are going to do you will be establishing a framework and will be able to tick off itemsfrom your "to do" list as you go along. This is an extremely effective way to manage any tasks that you have.

Planning reduces crisis management.

If you plan effectively there is less likelihood of any critical issues coming up. However, it is important to beprepared for unforeseen situations occurring and be prepared to sit back and plan again around any issues.

Planning allows focus and personal energy direction.

As you can appreciate, by establishing a focus through planning you will be able to channel your energy

positively into reaching an outcome. Having a course of direction will assist you in accomplishing your tasks

in a more timely and efficient manner.

Planning helps to eliminate:

A) Bad habits

B) Fear of failure.

Planning allows you to set priorities and focus on what is important.

Even within your plan you can priorities your tasks so that items you think are more important than otherscan be actioned accordingly. You need to discover what is important to you and sometimes go through a few

boring tasks in order to get to the exciting end result.


11/38

Business Planning:

If you do not plan your business strategy in the greatest possible detail you are needlessly handicapping

yourself. Plans made in the initial stages of business, whether it be start up, development or expansion will

throw up some possible problems and situations that can be resolved before they arise. The great thing about

plans is they are not cast in concrete and can be amended or revised when the need arises.

There are many kinds of plans to be made in business, all of them equally important which need careful

consideration and practical assessment, but most of all they must be realistic.

The main plan to be constructed firstly is the Business Plan. This will set the standards of the business and

will include:-

Introduction and background of the main people involved.

- A list of products and services to be offered.

- Market conditions.

- Growth opportunities.

- Competition.

- All the identifiable risks involved.

- How you will compete with opposition.

By taking into consideration the above few points you can have good construction for your Business.


12/38

PlanningResponsibilities

1. Construct, review, and/or rewrite

organizations mission

1. Construct, review, and/or rewrite

organizations mission

2. Identify and analyze their opportunities2. Identify and analyze their opportunities

4. Identify, analyze, and select the course(s)of action required to reach goals

4. Identify, analyze, and select the course(s)of action required to reach goals

3. Establish the goals they wish to achieve3. Establish the goals they wish to achieve

5. Determine resourced needed to achievegoals

5. Determine resourced needed to achievegoals


13/38

DEFNITOINS

Planning is a continuous process of making present entrepreneurial decisions (risk taking) systematically

and with best possible knowledge of their futurity, organizing systematically the efforts needed to Cary out

these decisions and measuring the result of those decisions against the expectations through an organizedsystematic feedback - PETER F DRUCKER

Planning is selecting and relating facts and the making and using assumptions regarding the future in the

visualizations and formulation of proposed activities believed necessary to achieve desired results. Thus

while planning, a manager makes use of facts and reasonable premises ad also considers the relevant

constraints. The Manager then decides what activities are needed, how they are to be carried out and howthey would contribute to the achievement of the desired results. GEORGE R.TERRY.

Planning involves selecting mission and objectives and the actions to achieve them; it requires decision

making that is, choosing from alternative future courses of action. Thus planning involves determiningorganizational objectives and deciding how best to achieve them. It involves looking ahead and relating

todays events with tomorrows possibilities.HEINZ WEIHRICH AND HAROLD KOONTZ


14/38

Essentials of an Ideal Plan:

Clarity

Simple

Flexible

Balanced

Optimum use of Resources

NATURE OF PLANNING:

Planning refers to the process of designing the future course of action for an organization to achieve specificgoals. The nature of planning is discussed below.

Planning is Goal Oriented

Planning is an Intellectual or Rational Process

Planning is Primary Function

Planning is All pervasive

Planning id Forward looking

Planning is a perpetual process

Planning is an Integrated process

Planning involves choice


15/38

Planning is Goal Oriented: Planning is a means for achieving set goals or objectives. It is of no value unless it contributessome positive way to the achievement of desired goals. Well defined goals are essential for effective planning.

Planning is an Intellectual or Rational Process: Planning requires managers to apply their imagination, creativity and theiranalytical skills to tackle problematic situations. Planning also requires foresight and sound judgment on the part of amanage. Thus, planning can be regarded as the outcome of an intellectual or rational process.

Planning is a Primary Function: Planning is the initial activity in the management process. All other functions of managementi.e. organizing, staffing, directing and controlling can be carried out efficiently only if they have been properly planned.Planning thus precedes the execution of all other managerial functions.

Planning is All Pervasive : The Planning function extends throughout the organization. It is an essential aspect ofmanagement at all executive levels. Managers at the top level prepare long term plans for the organization, which wouldenable it to achieve its overall objectives. Middle level managers formulate departmental and functional plans for themedium term, while managers at the lowest level prepare operating and short term plans. Thus the scope, extent and

nature of planning tend to vary at different levels of management.

Planning is forward looking: Planning is primarily concerned with anticipating the future. Predicting future trends and preparingfor them is an integral part of planning. Thus accurate forecasting is essential for planning.

Planning is Perpetual Process: Planning is a continuous activity; it goes on as long as an organization exists. Plans may beupdated, modified or replaced by new ones, when a situation calls for totally new set of goals; new plans take the placeof existing ones. Plans are changed or modified, but are never abandoned.

Planning is an Integrated process: Plans made at different levels are independent and interrelated. The top level of anorganization develops strategic plans, on the basis of which the middle level of management develops tactical plans.Thus plans constitute a hierarchy in the organization. Even though plans are made at different levels, they should be intandem with co operative objectives. These plans can either be short term plans or long term plans.

Planning involves Choice: Planning is essentially a decision making process that involves the selection of a suitable course ofaction. We will come across many alternatives for achieving an objective, one best among the alternatives have to beselected which is suitable for the organization.


16/38

Significance of Planning: Planning helps the managers to meet the challenges posed by the environment,

while at the same time minimizing the risks associated with them. Planning is a requisite not only forachieving but also for surviving in an complex and competitive world. It forces the Organization to look

ahead and decide their future course of action so as to improve their profitability. It ensures that employees

of an organization to carry out their work in a systematic and methodical manner. It also helps co

ordinates and control various tasks and makes sure the resources are used optimally.

Focus Attention on Objectives

Offsets uncertainty and risk

Provides sense of direction

Provide Guidelines for decision making

Increases organizational effectiveness

Provides efficiency in operations

Ensures Better co ordination

Facilitates control

Encourages innovation and creativity

Facilitates delegation


17/38


18/38

TypesanSteps inPlanning

Types of Plans:

Plans based on Organizational LevelPlans based on Frequency of usePlans based on Time Frame.

LEVELS TIME SCOPETop Level Long term plans Strategic Plans

Middle Level Intermediate Term plans Tactical Plans

First Level Short Term Plans Operational Plans


19/38

Plans based at Organizational Level:

As Organizations define goals at different levels, they also establish plans at different levels. On the basis of

organizational level plans can be Strategic, tactical, Operational.

Strategic Plans: Designed to achieve strategic goals. Strategic plans are general plans that indicate the resource

allocation and priorities and actions necessary for achieving strategic goals. These plans will establish overall objectivesfor organizations; analyze the various environmental factors that affect organizations. The plans are generally developed

by top management in consultation with the board of Directors and the middle management.As these plans require

longer period managers who are involved in developing strategic plans work in an environment of uncertainty and are

required to make assumptions about future threats and opportunities. To develop such plans, they require large amount of

information, especially with regard to the future of the external environment.

Eight Major Areas of strategic goals

Market Standing: Desired level of present and new markets, including areas in which new products are needed, andservice goals aimed at building customer loyalty.

Innovation: In products or services as well as innovation in skills and activities to supply them.

Human Resource: Supply, development and performance of managers and other organization members; employee

attitude and development of skills; relation with labor unions etc.

Financial resources: Source of Capital and its effective utilization.

Physical Resources: How it will be used in production of goods and services

Productivity: Efficient use of resources relative to outcomes.

Social Responsibility: Community and maintenance of ethical behavior.

Profit Requirements: Level of profitability and other indicators of financial well being.


20/38

Tactical Plans:

They aim at achieving short term goals. These plans support the implementation of strategic goals. They act

as basis for strategic plans. These plans are more concerned with actually getting things done than with

deciding what to do. Tactical plans are developed by middle level managers who may consult lower levermanagers before finalizing the plan and communicating it to top level management. Tactical plans cover a

shorter time frame. A middle level manager acting as a tactical planner deals with less uncertainty and risk

than the strategic planner. The information that he requires is also less and most of it can be derived from

internal resources.

Operational Plans:

Operational plans are developed to determine the steps necessary for achieving tactical goals;

they are stated in specific, quantitative terms and serve as the department managers guide to day today

operations. Operational plans are developed by lower level managers. These plans are generally consider

the time frames of less than one year, few months, few weeks or even few days. They spell out specifically

what must be accomplished over short time periods in order to achieve operational goals. They work in an

environment of relative certainty. Amount of risk involved is very low. The information needed for operational

planning can be obtained almost completely from with in the organization. Unless operational goals are

achieved, tactical, and strategic goals will not be achieved. So, operational plans are necessary for thesuccess of tactical and strategic plans.


21/38

Plans Based on Frequency of Use:

In this type depending on the extent of use, plans can be of two types : Single use Plans and standing plans

Single use Plans:

aimed at achieving at specific goal

designed to deal with a unique, non recurring situation

Single use plan is a one time plan and is created in response to non programmed decisions of managers.The major type of single use plans are programmes, budgets, Projects

Programs

These are large scale single use plans that co ordinate a complex set of activities to achieve important non

recurring goals

These are concrete in nature designed to accomplish specific objectives.

Programs clearly spell out the steps to be achieved.

They clearly indicate who should do what and how.

They serve as a useful guide for day 2 day operationsThey are action based and result oriented management approaches that facilitate the smooth and efficient

functioning of organizations

Budgets:

It outlines the expected results of a given future period in numerical terms

It is a blue print designed to achieve a specific goals.

A budget may be expressed either in financial terms or in terms of units of products, labor hours, machine hours,

or any other numerically measurable term.A budget generally quantifies the plan and establishes the target for actual operations

It indicates the financial resources necessary for supporting the various activities included in a program.

Projects:

It is similar to a program

It is smaller in scale and less in complex

A project is a component of a program

It helps in the precise allocation of duties and effective control and easy implementation of the plan


22/38

STANDING PLANS or REPEATED PLANS

It refers to specific situations which have been developed for dealing with recurring situations. Single uses

plans are used for situations that are unique, standing plans are used for situations which may be encountered

by managers on a regular basis. Standing plans are developed in response to programmed decisions of

managers. They speed up the decision making process and allow managers to handle similar situations in a

consistent manner. It helps in delegating authority. They need continuous supervision by managers. They also

provide a ready reference for executive action as they spell out what is to be done in a particular situation.

The three main types of Standing Plans are Policies, Procedures, Rules.

Policies:

Policy refer to the process of making important organizational decisions, including the identification of

different alternatives such as programs or spending priorities, and choosing among them on the basis of the

impact they will have.

A policy is the most general form of standing planIt specifies the broader parameters with in which organization members are expected to operate in pursuit oforganizational goals.

Policies do not specify what actions to be taken, but provide general boundaries for action.

They indicate the direction in which top management wants to channelize the energies of the people in the

organization.

Policies are generally flexible and broad in scope.

Example let us see the HR Policies of VSP

At Visakhapatnam Steel Plant, believe that our employees are the most important resources. To realize the full

potential of employees, the company is committed to:

Provide work environment that makes the employees committed and motivated for maximizing productivity

Establish systems for maintaining transparency, fairness and equality in dealing the employees

Empower employees for enhancing commitment, responsibility and accountability

Encourage teamwork, creativity, innovativeness and high achievement orientation

Provide growth and opportunities for developing skill and knowledge

Ensure functioning of effective communication channels with employees


23/38

Procedures:

A procedure is a specified series ofactions oroperations which have to be executed in the same manner in order to

always obtain the same result under the same circumstances it indicates a sequence ofactivities, tasks, steps,

decisions, calculations and processes, that when undertaken in the sequence laid down produces the described result,

product or outcome.

It is a chronological sequence of steps to be undertaken to achieve an objectiveProcedures are guides to actions that specify in detail the manner in which the activities are to be formed.

Well established and formally laid down procedures are often called (SOPs)

Ensure uniformity in action

It provides step by step detailed instructions regarding the action to be taken.

Procedures help in simplifying and streamlining the administrative activities of an organization.

Example

Volume 2 Visual MerchandisingAnnexure, Check list

Signages

Maniqune Management

Displays and Visibility

Types of Signages

Rules:

Simplest type of Standing plans.A rule is a statement that spells out what should or should not be done in a particular

situation.

Rules dictate exactly what must or must not be done.Rules are rigid and definite plans that do not allow for deviation.

Provide very little flexibility. Rules help ensure that employees behave in the desired manner and make their actionspredictable. They regulate the conduct of affairs by providing detailed instructions.

HR RulesIn time

Id card

Dress Code

Maintaining Customer secrecy

Adherence to compliance

The telephone Courtesy


24/38

Plans based on time frame of Use:

Long Term Plans: These are the strategic plans of an organization, and have a time frame exceeding five

years.A long term plan is derived from the vision developed for the organizations by its founders. It involves

setting up broad objectives and establishing procedures for achieving these objectives

VISIONTo become a global leader in higher education.

Intermediate - Term Plans: Intermediate plans provide a direction for the organizations. These plans specify

the activities to be carried out. These plans generally cover time periods ranging from one to five years.

Intermediate plans define the organizations activities and provide direction for middle management.

Short Term Plans: These plans generally cover time periods up to one year. They provide low level managerswith guide lines for carrying out day-to-day activities of an organization. They take care of the individual

activities needed to achieve overall objectives outlined by long term planning. They guide a manager by

stating what he has to do; how; where and when he has to do it; and the resources available for performing

the specific task. They help the managers make better use of manpower and other resources in the

intermediate future.


25/38

Specific Plans :Which have clearly specific objectives. They Are very specific unambiguous.

For Ex : AManager planning who seeks increase his firms Sales by 10% over a period of one year.

Might establish Specific procedures, budjet allocations, and schedules of activities for reaching thegoal.

Directional Plans: They establish general guide lines ,they provide Managers with a focus, but not

confine them to a specific Courses of action.

Ex: Instead of planning a specific plan the cut costs by 5% and Increase revenues by 10% in six

months, a directional plan May chalk out a course for improving corporate profits With a broad

range say 10 to 15% over the next six months

They provide flexibity .


26/38

Steps in Planning Process

Analyzing Opportunities

Establishing Objectives

Determining Planning Premises

IdentifyingAlternatives

EvaluatingAvailable Alternatives

Selecting the most appropriateAlternative

Implementing the Plan

Review the Plan.

STEP 1 Establishing Objectives

STEP 2 Analyzing Opportunities

STEP 3 Identifying AlternativesSTEP 4 Evaluating Available Alternatives

STEP 5 Selecting the most appropriate Alternative

STEP 6 Determining Planning Premises

STEP 7 Implementing the Plan

STEP 8 Review the Plan.


27/38

Analyzing Opportunities: In external environment as well as within organization managers should be aware of

the opportunities. They should understand the firms strengths and weaknesses.A thorough understanding of

the opportunities available outside the business enterprise enables managers to set realistic objectives.

Establishing Objectives: There should be established objectives for every work unit within the organization. It

specifies the result expected from particular course of action and define the areas that should receive specialattention. Objectives specify what should be achieved by the network of strategies, policies, procedures, rules,

budgets, and programs. Organizational Objectives provides directions to major plans. These plans help the

various departments of an organization to prepare their objectives inline with the organizational objectives.

Thus there exists a hierarchy of objectives in an organization. Objectives must be stated clearly and must be

established for all key areas where performance affects the well being of the organization. They should be

specified in measurable terms like costs, targets or quality specifications.

Determining Planning Premises: Planning premises are assumptions about the environment in which the planis to be carried out. They lay down the boundary or limitations with in which plans are to be implemented.

Planning premises include both external and internal premises. External premises include social, economic,

political and technological factors; competitors plans and actions; government policies etc. Internal premises

include organizations policies, resources ability to withstand environmental pressure, etc. Plans are formulated

taking in to account both external and internal premises.

According to the principle of planning premises," the more thoroughly individuals charged with Planning and

understand and agree to utilize consistent planning premises, the more coordinated Enterprise planning will

be.

IdentifyingAlternatives: A particular objective can be achieved through various actions. For instance, if

expansion in the same field, or diversification, or amalgamation (merging) or by introducing a new product

variant in the market and so on. Thus, there are many ways of achieving the same goal.A common problem at

this stage is selecting the most promising alternatives for further analysis. The planner must examine these

alternatives and decide on the best ones through careful analysis. These alternatives lay the foundation for the

next step of planning.


28/38

Evaluating Available Alternatives: The evaluation of alternatives should be selected keeping in mind the goalsof the organization and the available resources. Each alternative may have some negative and positiveaspects. For instance, one alternative may be highly profitable but may require heavy investment and mayhave a long gestation period; another one may be less profitable but may also involve less risk. Since, thefuture is uncertain, the planner can never b sure of the outcome of any alternative. Thus, many variables andlimitations have to be considered when evaluating alternative courses of action. The use of planning anddecision making techniques, such as operations research, helps in evaluating the alternatives.

Selecting the most Appropriate Alternative: Decision is made about the course of action to be taken.Sometimes, after evaluating a few alternative courses of action, a planner may choose more than a singlealternative, as two or more alternatives may seen advisable. Another reason for choosing more than onealternative plan is that the planning premises may change (since the future is unpredictable). In such a case,the planner must be ready with an alternative plan that can be suit the changed situation.

Implementing the Plan: This involves putting the plan in to action. In order to implement the actions stated inthe plan, managers have to make a series of decisions. A manager can implement the plans of a firm throughthe use of authority, persuasion or policy. Authority is a legitimate form of power that comes with the positionand is not associated with a person.

It is often sufficient to implement relatively simple plans that do not cause a significant change in the businesscycle. But a complex and comprehensive plan cannot be implemented through authority alone.

Persuasion is another tool used by managers for implementing their plans. Persuasion is the process ofselling a plan to those who must implement it, by communicating relevant information so that the individualsunderstand all the implications". Persuasion requires convincing others, so that the plan is accepted on thebasis of its merits rather than on the authority of the manager. When long term plans are developed,managers generally formulate policies form implementing them. Policies are usually written a statement thatprovides guidelines for selecting particular courses of action for achieving a firms objectives. Effective policiesare those that are flexible, comprehensive, coordinated, ethical, and clear.

Reviewing the Plan: Once a plan has been implemented it has to be reviewed. It helps managers to evaluatethe plan and also identify deviations from the established course of action. It thus helps the managers takethe necessary corrective measures. At every stage of the review, the outcomes must be compared with theexpected results. This will help the organization to develop future plans. A periodic review of plans enables anorganization to update them in the light of changes in the business environment.


29/38

Prerequisites for Effective Planning

Establishing the Right Climate for Planning: Possible with setting objectives, developing realisticplanning premises, ensuring information flow, and providing appropriate staff assistance.

Clear and Specific Objectives: Objectives should be stated for KRAs. It is that aspect which has adirect bearing on organizations well being. KRA may be profitability, sales, R&D, Mfg. etc.

Planning Premises: Forecasting is very important for accurate premising. Forecasting may be withrespect to market, prices, sales, tech. Devmt. Etc.

Initiative at Top Level: The initiative and support of top level mngt is imp.

Participation in Planning process: Mangers at all levels should be given opportunity to participate inplanning process. One of the common way is MBO where managers and subordinates set objectivesjointly for short term another way to ensure participation is forming Planning Committees.

Communication of Planning Elements: Top level managers should communicate goals and planningpremise throughout the organization.

Integration of Short & Long Term Plans: Short term plans should contribute to the long term plans andact as a means for implementing them.

An Open System Approach: Managers consider the impact of changes in external environment on thefirm and on every aspect of planning. Thus this system provides flexibility in planning.

Management Information System: Management require vital info that is communicated with speed,precision and economy. It leads to effective planning.


30/38

LimitationsofPlanning

Lack of Accurate Information: The quality of planning depends on relevance andaccuracy of information.

Time consuming process: Collection of data and revision of plans take considerableamount of time which delays implementation and organization lose opportunity.

Expensive: Gathering of information and testing of various course of action. This is thereason for small organizations avoid extensive planning.

Inflexibility: Employee initiative and individual freedom mar be curbed because ofdetailed policies and procedures.

Resistance to Change: People are concern about present than future which is highlyunpredictable.

Environmental Constraints: Unforeseen changes may cause a plan to be altereddrastically. Managers have hardly any control over envmt.

Lack of Ability and Commitment: Inability of managers to develop good strategies.

False sense of Security: About the results.


31/38

GuidelinesforSuccessful PlanningandImplementation.

Involve the right people in planning process:

People involved in implementation and representatives of people affected byplans.

Communicate the plan throughout the organization: Difficult to remember incase changes takes place in plan.

Goals should be SMARTER:

Specific, Measurable, Acceptable, Realistic, Time frame, Extending,Rewarding


32/38

Planningpremises

Planning premises means systematic and logical estimate for the future factorsaffecting planning

According to Dr.G.R Terry Planning premises are the assumptions providing aback ground against which the estimated events affecting the planning will takeplace

According to Koontz and O'Donnell a Key part of planning is the establishmentof clear planning premises. To assure co ordination among all managers whomakes plans in organization, these premises should be used by all concernpersons premises guides planning.


33/38

Types of Planning Premises

Premises at the view pointOf place

Premises at the view pointOf Control

Premises at the view point

Of Calculation

E

X

T

ER

N

A

L

I

N

T

ER

N

A

L

C

O

N

T

R

O

L

B

L

E

UN

C

O

N

T

R

OL

A

B

L

E

N

U

M

R

I

C

A

L

Q

U

A

N

T

I

T

A

T

I

V

E


34/38

Premises at view point of place: Number of factors affecting planning considering the place of factors, some factorsare external and internal

Internalpremises of planning:

1. Premise about basis policies

Should the purchase is centralized or decentralized? Whether to give importance to quality or low price?

Whether to implement the policy of centralization of power or not? The methods of directing to be followed like Policies and rules of employment selection, promotion, transfer,

demotion and relieve. Premises about automation of office. Premises about pricing, price discrimination, after sale services and so on.

2. Premise about capital investment and utilization:

premises for long term capital premises for short term capital

3. Premise about obtaining raw material: 1. What type of raw material is needed and in what quantity. 2. What are the sources of raw material? 3. What will be the prices of raw material? 4. What will be the price of raw material? 5. How much would be the expense of transportation. 6. Is there any possibility to prepare required raw material in the company? 7. If raw material is going to be purchased, should it be imported or indigenously acquired?.

4. Premises about personnel: among all the means of production, the personnel are the only alive one. The premisesabout this factor can be enumerated as under:

1. How much skilled, unskilled, male, female, workmen, are needed for implementation of a plan? 2. How much training should be imparted in the context of new technological development? 3. To make an estimate regarding present and future employees. 4. Premises about the trend, co-operation, and association of employees.

5. What should be the steps of moving worker? 6. What is the condition of organization, co-operation and work attitudes of personnel?


35/38

Premises about organization: organization is necessary for the implementation of planning. For this following premisesare necessary:

1. About type of organization will be required 2. Premises about the powers and responsibility. 3. Premises about the flexibility in the organization. 4. Premises about the co-ordination between the departments. 5. Premises about the stability in the organization.

6. Premise about different expenses: Each activity undertakes in a unit leads to expenses, the assumption about themare as under:

1. What would be the possible expense of about recruitment in the context of rate of labor turnover? 2. What would be the expense of storage and maintenance of materials? 3. Premises about packing and packing expense. 4. Premises about expense of labor welfare.

5. Premises about research and development expenses 6. Premises about expenses of stationery, post telegram, telephone. 7. Premises about expenses of selling activities and trade exhibitions.

Premises about development the area covered by developmental premises are as under: 1. Possibility of present and potential competitors of the unit. 2. Estimate of product development, product enrichment and product enlargement. 3. Time span over which the plant will operate at full capacity. 4. Annual return on capital expense incurred.

5. Possibility for developing new product. 6. Possibility of future development from the point of view of market competition after considering the popularity of agiven product.

7. Premises about the future development on the bases of government industrial policy.

. Premises about selling:

1. Premise about the quantum of sale, product and sale areas.

2. How much sale should be done on credit and on cash? 3. Premises about direct sale and indirect sale. 4. Premises about packing, advertisement and after sale service. 5. Premises about channel of distribution and expenses for distribution.


36/38

B. EXTERNAL PREMISES OF PLANNING: Certain external factors like price level, employment,

population, technical research, different resources of production, market demand etc. are affecting business

activity. Therefore premises regarding these factors are inevitable. These external factors are not under the

control of management. So they are uncontrollable premises, which are as under:

1. General premises about business environment.

2. Premises about the production resources. 3. Premises about the demand of the product.

1. General premises about business environment:

Premises about price level.

Premises about the employment.

Premises about the technical research.

Premises about the population. Premises about productivity.

Premises about the government policy.

Premises about government control.

Premises about the political factors.

Premises about the social and moral standards.

Premises about the production resources:

Premises about location of business Premises about the capital.

Premises about the fuel.

Premises about supply of labor.

Premises about the demand of the product:

Premises about the demand of the industry.

Premises about the demand of specific area.

Premises about the demand of the firm.


37/38

Planning premises at the point of view of control:

1. Controllable premises 2. Uncontrollable premises.

1. Controllable

Premises:

Those factors which are internal are mostly controllable. It includes the formation of organization, policymatters, methods of direction, methods of control, types of budget, salary, financial, motivation, promotion,transfer, facility etc.

2. Uncontrollable premises:

Those factors which are external are mostly un-controllable( have no control) affecting the planning. It includessupply of raw material, manpower, fuel, market competition, government policy, price fluctuation, technicalresearch, government control etc.

Planning premises at the point of view of Calculation:

Numerical premises: The premises which can be measurable by any scale of measurement such as inch,feet meter, liter, kilometer, dozen, gross, tone, etc. is called numerical premise. It is also called physical

premises.

Invisible premise: These premises are those premises which cannot be measurable in numerical term.Such as group feeling, co-operation, honest, faithfulness, efficiency, effectiveness of advertisement,satisfaction


38/38

ImportanceofPlanningPremises:

Risk of uncertainty reduces.

Risk of flexibility reduces.

Co-ordination becomes effective.

Increase in profitability

Documents

Planniing My Nts