CHAPTER: 4

PLANNING
OFFICIAL SYLLABUS FOR THE
CHAPTER
PLANNING : CONCEPT, IMPORTANCE AND
LIMITATIONS
● Understanding the concept of planning
● Describe the importance of planning
● Understanding the limitations of planning

PLANNING PROCESS
● Describe the steps in the process of planning

SINGLE USE AND STANDING PLANS, OBJECTIVES

STRATEGIES, POLICY, PROCEDURES, METHOD RULE,
BUDGETS AND PROGRAMME
● Develop an understanding of single use and standing
plans
● Describe plans, objectives strategies, policy, procedures,
method rule, budgets and programme as types of plans
 MEANING OR DEFINITION OF PLANNING
All organisation whether it is government, a
private or small businessman requires
planning
Planning can be defined as thinking in
advance what is to be done, when it is to be
done, how it is to be done, and by whom it
should be done.
or
In simple words we can say planning
bridges the gap between where we are
standing today and where we want to reach.
FEATURES NATURE AND CHARACTERISTIC OF PLANNING

Planning
Planning is
contribute Planning is Planning is Planning is
primary
s to pervasive futuristic continuous
function
objective
Planning is primary function :
It is the first function to be performed by every manager no other function to be performed without planning.

Planning contributes to objective :

Planning starts with the determination of objectives. We cannot think of planning in absence of objectives. After setting up goal
planning, the methods, procedures and steps to achieve the organisational objective.

Planning is pervasive :
It is required at every level of management it is not a function restricted to top level managers only but planning is done by
manager at every level. Information of major land and framing of all over policies is the task of top level managers.

Planning is futuristic :
Planning always means looking ahead. Planning is never done for the past. All the managers try to make predictions and
assumptions for the future on the basis of past experience of the manager.

Planning is continuous:
Planning is a never ending or continuous process. Because after making plants also one has to be in touch with the changes in the
environment and make for the plans accordingly.
 Planning Planning
provides reduces the
direction risk of
IMPORTANCE OF uncertainty
PLANNING
Planning Planning
provides establishes
innovative standard for
ideas controlling
 Planning provides direction
It is concerned with a predetermined course of action. It provides
the direction of the efforts of employees. Planning makes clear
what employees should do, how to do, etc. employees do this lead
to unity of direction if there was no planning, employees would be
working in different directions and organisation would not be able
to achieve its desired goals.

Planning reduces the risk of uncertainty

Organisations have to face many uncertainties and unexpected
situation everyday. Planning helps the manager to face the
uncertainty because plan or stride to see the future by some
assumption regarding the future keeping in mind their past
experience and scanning of business environments. The plans
are made to overcome such uncertainties example PFDD
maintained on debtors
Planning provides innovative ideas
Planning requires high thinking process. So there is a great
scope of finding better ideas and procedures to perform a
particular drop planning process force manager to think
differently than its assume the future condition so, it makes
the manager innovative and creative.

Planning establishes standard for controlling

Controlling means comparison between planned and actual
output and if there is variation between both then find out the
reasons for such deviation and take measures to match the
actual output with the planned. But in case there is no planned
output then the controlling manager will have no base to
compare whether the actual output is adequate or not. So
planning is the base for not only controlling planning is needed
to initiate every function and base for comparison in control is
given by planning function only.
 Lack of
accurac
y

Limitations of
Does not It may not work
guarantee in a dynamic
success environment

planning
Time
It reduces
consuming
creativity
process
It
involves
a huge
cost
 It may not work in a dynamic It reduces creativity:
Lack of accuracy:
environment: With the help of planning
In planning we are always
The business environment is the manager of the
thinking in advance and it is
very dynamic as our organisation starts working
concerned with the future
continuous changes take rigidly and they become the
only and the future is
place in an economic, blind followers of the plan
uncertain in planning various
political and legal only. So managers do not
assumptions are made but
environment. It is very think about initiatives.
these are not 100% correct.
difficult to forecast these
future changes.
 It involves a huge cost: It is a time consuming Planning does not guarantee
Planning process involves a process: The planning success:
lot of cost because it is an process is time consuming Sometimes managers have a
intellectual process. because it takes a long time false sense of security that
Companies need to higher to evaluate the alternative plans have worked,
professional exports to carry and select the best one. Lots successful in the past so
on this process. Along with of time is needed in these will be working in the
salary of these experts of the developing planning future also. Planning only
company has to spend lot of premises. So because of this provides a base for analysis
time and money to collect the actions get delayed. in the future. It is not a
accurate facts and figures. solution for future course of
So it is a costly process. action.
EXTERNAL LIMITATIONS OF PLANNING

Change in
Change in government
competitors or economic Change in
policy policy technology

Change in Natural Change in

taste and calamities buying
preferences capacity of
consumer
PLANNING PROCESS
(S DIES IF)
Setting up of the objectives :
In planning function managers begin with setting up
of objectives because all the policies and methods
are framed for every objectives only by keeping the
mind the company and resources of the company.

Developing premises :
Premises referred to making assumptions regarding
future premises are the ways on which plans are
made. Many forecast are may to find out the demand
for a product change in environment, government
comma for competitor policy, tax rate etc.
Identify various alternatives for achieving the
objectives:
After setting up of objective the manager make a list
of alternatives through which the organisation can
achieve managers must know all the ways to reach
the objectives. So the manager lists out all the
alternatives.
Evaluation of various alternatives : Select an alternative:
After making the list of various alternative along The best alternative is to be selected which have
with the assumptions, the manager starts more positive aspect and less negative aspect
evaluating each and every alternative and note managers try to eliminate those alternators which
down the positive and negative aspect of every have more negative aspects. Sometime instead
alternatives. of selecting one alternative, a combination of
different alternatives can also be selected
managers make a small plan to support the main
plan. Hence these are called derivative plans.

Implement the plan:

Follow up action:
Plants are made on paper there is no use of these
plans unless and until these are put in action to Planning is a continuous process so that the
implement the plan. Manager start manager's job does not get over simply by putting
communicating the plans to all the employees the plan into action. The manager monitors the
very clearly because the employees actually have plan carefully why it is implemented while
to carry on the activities according to following the plan, many changes are made and
specification of plans after communicating many adjustments are made.
manager start allocating the resources according
to the plan.
 A plan is a document that
outlines how goals are going to
be met.

Single
use plan
Types of
plans:

Standing
plan
SINGLE USE PLAN STANDING PLAN
Single use plans are developed for A standing plan is a business plan
unique situations or problems and that is intended to be used many
are usually replaced after one use, times.
Every time a New Plan is prepared These are Recurring or Repeat use
for a new situation, plan.
E.g., Budget, Programme and E.g., Policies, procedures.
Projects Methods and rules.
TYPES OF PLAN
OBJECTIVES
● These are the end result of every
activity.
● Objectives describe what is to be done.
● Objectives are the end points of
planning.
● These are framed by top level
management.

OBJECTIVE MUST BE “SMART”

S- Specific
M-Measurable
A-Achievable
R-Relevant
T- Time- bound
STRATEGY
● A strategy is a comprehensive plan to
achieve the organizational objectives.
● These are made by top level.
● Every time a new strategy is prepared
to solve different problems.
● The dimensions of strategy are
determining long term objectives,
allocation of resources for achieving
the organizational goals. The common
decision in strategy are whether to
introduce a new product or not, If to
introduce then how, finding out
customers, making changes in existing
products, etc.
METHODS
Methods are formulised way
of doing a routine job it is a
common/ systematic way it
removes the doubt in the
mind of employees make
uniformity manager decide in
advance the common way of
doing a job it is
predetermined.
POLICIES
● Policies are organisations own
way of solving problems,
● Policies describe how the work
is to be done.
● These are made by all levels -
top, middle, lower levels.
● Policies are derived from the
objectives of the company.
● It helps and encourage
employees at critical situations,
E.g. A school may have policy to
give admission to students
securing 60% or more that 60%
marks.
RULES
Rules are norms regarding actions
and non-action of employees it is a
guide behavior of employees. It
describes what is to be done and
what not base. These are rigid and
are created to maintain discipline.
PROCEDURES
Procedures are sequences of steps
to be followed by employees in
different situations. The
procedures can be defined as the
exact manner in which an activity
has to be accomplished.
e.g. procedure for admission in a
particular school
PROGRAMME
Programme are the
combinations of goals, policies,
procedures and rules. All these
plans together form a
programme. These are made for
systematic working in
organisations.

BUDGET
It is a statement of expected results
expressed in numerical terms it is
prepared by every level e.g. cash
budget, capital budget, financial
discipline.