Planning

PLANNING
SHIVENDRA SINGH
ASSISTANT PROFESSOR
MAHATMA GANDHI CENTRAL
UNIVERSITY, BIHAR

Most of us are fairly familiar with the meaning of 'Planning'
in our everyday life.
We do often decide in advance about the things to be done
on a busy working day.
As students, you may think in advance how to go ahead with
the preparation for your examination, how to make use of
your time in the best possible manner and so on.

Planning is the most fundamental function of
management
An organization can succeed in effective utilization
of its human financial and material resources only
when its management decides in advance its
objectives, and methods of achieving them.

Planning involves determination of objectives of the
business, formation of programmes and courses of
action for their attainment, development of
schedules and timings of action and assignment of
responsibilities for their implementation.

Planning thus precedes all efforts and action, as it is the
plans and programmes that determine the kind of
decisions and activities required for the attainment of the
desired goals.
It lies at the basis of all other managerial functions
including organizing, staffing, directing and controlling.

DEFINITION
Planning is the process of deciding in advance what is to be done,
who is to do it, how it is to be done and when it is to be done.
According to Koontz, O'Donnell and Weihrich, "Planning is an
intellectually demanding process; it requires the conscious
determination of courses of action and the basing of decisions on
purpose, knowledge and considered estimates".

Planning is thus deciding in advance the future state of business
of an enterprise, and the means of attaining it. Its elements are :
1. What will be done – what are the objectives of business in the
short and in the long run?
2. What resources will be required – This involves estimation of
the available and potential resources, estimation of resources
required for the achievement of objectives, and filling the gap
between the two, if any.

3. How it will be done – This involves two things : (i) determination of
tasks, activities, projects, programmes, etc., required for the
attainment of objectives, and (ii) formulation of strategies, policies,
procedures, methods, standard and budgets for the above purpose.
4. Who will do it – It involves assignment of responsibilities to various
managers relating to enterprise objectives.

5. When it will be done – It involves determination of the
timing and sequence, if any, for the performance of
various activities and execution of various projects and
their parts.

NATURE OF PLANNING
• Primacy of planning
• Planning as a process
• Pervasiveness
• Future orientation
• Information base
• Continuous process

1. PRIMACY OF PLANNING
Planning precedes all other managerial functions.
The process of management begins with planning.
Planning is the prime function from which the other
functions get the necessary base.

2. PLANNING AS A PROCESS
Planning is a process involving a few stages or steps.
The planning process begins with identification-of mission
and goals of the organisation and ends with making
arrangements for implementation of plans.

3. PERVASIVENESS
Planning is a pervasive function of managers at all , levels
of the managerial hierarchy, right from the chief executive
down to the first line supervisor.
Planning is also pervasive across the various organisational
functional areas.

4 FUTURE ORIENTATION
Planning is future-oriented.
Henri Fayol defined planning as the process of looking
ahead (thinking ahead) and making provision to tackle
future events and situations.
The concern for future makes sense to the extent that
planning is intended to cope with uncertainties and
unknowns

5 INFORMATION BASE
Planning is backed by information.
Without information, planning exists in a vacuum.
Information on the past trends, current conditions and future
possibilities are essential for planning.
Information is needed to diagnose planning issues and problems,
to develop alternative courses of action, to evaluate them and to
make final choice of plans.

6 CONTINUOUS PROCESS
Planner bases his plans on an informed and intelligent estimate of
the future, the future events may not turnout to be exactly as
predicted.
This aspect of planning makes it a continuous process.
Revisions are needed to be made in them in response to changes
taking place in the internal as well as external environment of
enterprise

I. PROVIDES DIRECTION
Planning provides a clear sense of direction to the
activities of the organisation and to the job behaviour of
managers and others.
It strengthens their confidence in understanding where the
organisation is heading

II. REDUCES UNCERTAINTIES
Planning forces managers to shake off their inertia and
insular outlook; it induces them to look beyond those
noses, beyond today and tomorrow, and beyond
immediate concerns
It encourages them to probe and cut through
complexities and uncertainties of the environment and to
gain control over the elements of change.

III. KING-PIN FUNCTION
Planning is a prime managerial function which provides the basis for
the other managerial functions
The organisational structure of task and authority roles is built around
organisational plans
The functions of motivation, supervision are addressed to
implementation of plans and achievement of organisational objectives
Managerial control is meaningless without managerial planning

IV. RESOURCE ALLOCATION
Planning is a means of judicious allocation of strategic and
scarce resources of the organisation in the best possible manner
for achieving strategic goals of the organisation.
If the organisation enjoys a distinct advantage in possession of
resources, a careful planning is essential to allocate them into
those lines which would strengthen the overall competitive
position of the organisation.

V. ENCOURAGES INNOVATION AND CREATIVITY
Planning is basically the deciding function of management.
It helps innovative and creative thinking among the managers
because many new ideas come to the mind of a manager when
he is planning.
It creates a forward looking attitude among the managers.

ESSENTIAL STEPS IN PLANNING
Establishing
Verifiable Goals
Establishing
Planning
Premises
Defining of key
areas and
issues
Findings
Alternative
Courses of
Action
Evaluating and
Selecting a
Course of
Action
Developing
Derivative
plans
Measuring and
Controlling the
Progress

1. ESTABLISHING VERIFIABLE GOALS
The first step in planning is to determine the
enterprise objectives
These are most often set by upper level or top
managers, usually after a number of possible
objectives have been carefully considered.

There are many types of objectives managers
may select: a desired sales volume or growth
rate, the development of a new product or
service, or even a more abstract goal such as
becoming more active in the community.
The type of goal selected will depend on
number of factors.

2. ESTABLISHING PLANNING PREMISES
The second step in planning is to establish planning
premises, i.e. certain assumptions about the future on the
basis of which the plan will be formulated.
Planning premises are vital to the success of planning as
they supply economic conditions, production costs and
prices, probable competitive behaviour, capital and
material availability, governmental control and so on.

In this step, top management in collaboration with
other managers, have to make an analysis of the
current state of affairs with the organisation
However, top management of the organisation is
vitally concerned with the analysis of external
environmental conditions for planning purposes.
This will enable the organisation to identify the
present and future opportunities and threats in the
various elements with which the organisation is
directly concerned.

3. DEFINING OF KEY AREAS AND ISSUES
FOR PLANNING
The appraisal of internal and external environmental
conditions gives to the management an idea about what
tentative planning the organisation needs.
Managers have to ask themselves whether, in the light of
environmental appraisal, the existing businesses, products,
markets, processes and practices are relevant, and which
aspects of them have to be retained, strengthened and
modified.

The analysis also may reveal the need for new
directions to strengthen the competitive position of the
organisation, and to bring about a better alignment
between the organisation and the business environment.

4. FINDINGS ALTERNATIVE COURSES OF
ACTION
The fourth step in planning is to search for
alternative courses of action.
For instance, technical know-how may be secured
by engaging a foreign technician or by training
staff abroad.

Similarly, products may be sold directly to
the consumer by the company's salesmen or
through exclusive agencies.
There is seldom a plan for which reasonable
alternatives do not exit, and quite often an
alternative that is not obvious proves to be
the best.

5. EVALUATING AND SELECTING A COURSE
OF ACTION
Having sought alternative courses, the fifth step is to
evaluate them in the light of the premises and goals
and to select the best course or courses of action.
This is done with the help of quantitative techniques
and operations research.

6. DEVELOPING DERIVATIVE PLANS
Once the plan has been formulated, its broad
goals must be translated into day-to-day operations
of the organization.
Middle and lower-level managers must draw up the
appropriate plans, programmes and budgets for
their sub-units.
These are described as derivative plans.

In developing these derivative plans, lower-level
managers take steps similar to those taken by upper-
level managers – selecting realistic goals, assessing
their sub-units particular strength and weaknesses
and analyzing those parts of the environment that
can affect them.

7. MEASURING AND CONTROLLING THE
PROGRESS
Obviously, it is meaningless to let a plan run its course without
monitoring its progress.
Hence the process of controlling is a critical part of any plan.
Managers need to check the progress of their plans so that
they can (a) take whatever remedial action is necessary to
make the plan work, or (b) change the original plan if it is
unrealistic.

Types of Plans
The term 'plan' may be defined as a course
of action determined in advance by the
management.
A plan has a time frame.
It is a commitment to action and commitment
of resources.
It is also a package of decisions on intended
efforts to achieve some results.

STRATEGIC PLAN
It involves analyzing competitive opportunities and threats, as well
as the strengths and weaknesses of the organization, and then
determining how to position the organization to compete
effectively in their environment.
Strategic planning has a long time frame, often three years or
more.
Strategic planning generally includes the entire organization and
includes formulation of objectives.

Strategic planning is often based on the organization’s
mission, which is its fundamental reason for existence.
An organization’s top management most often conducts
strategic planning.

OPERATIONAL PLAN
These plans generally assumes the existence of
organization-wide or subunit goals and objectives and
specifies ways to achieve them.
Operational planning is short-range (less than a year)
planning that is designed to develop specific action steps
that support the strategic and tactical plans.

LONG-TERM PLANS
long-term plans as those with a time frame beyond three years.

SHORT-TERM PLANS
Short-term plans cover one year or less.

DIRECTIONAL PLANS
When uncertainty is high and managers must be flexible in order
to respond
to unexpected changes, directional plans are preferable
Directional plans are flexible plans that set out general
guidelines.
They provide focus but don’t lock managers into specific goals or
courses of action.
For example, Mr. Kumar , president of T-Series , said he has a
simple goal—to “sign great artists.”

SPECIFIC PLANS
Specific plans are clearly defined and leave no room for interpretation.
A specific plan states its objectives in a way that eliminates ambiguity
and problems with misunderstanding.
For example, a manager who seeks to increase his or her unit’s work
output by 8 Percent over a given 12-month period might establish
specific procedures, budget allocations, and schedules of activities to
reach that goal.

SINGLE-USE PLAN
A single-use plan is a one-time plan specifically designed to meet
the needs of a unique situation.
A single use plan is one which is specific to particular situations of
a non-repetitive nature.
It may not have use for different situations, It becomes obsolete
Once its purpose is over.
For instance, when Walmart wanted to expand the number of its
stores in China, top-level executives formulated a single-use plan
as a guide.

STANDING PLANS
As against single use plans, standing plans are those which are of a
relatively long
standing by nature and provide guidance for activities performed
repeatedly.
Standing plans include policies, rules, and procedures
An example of a standing plan is the sexual harassment policy
developed by the University
It provides guidance to university administrators, faculty, and staff.

Planning

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